Advantages of investing in Buy to Let

Advantages of investing in Buy to Let

With many would be first-time buyers still struggling to make it onto the property ladder, there is an increasing demand for quality rental properties. As a result, the number of buy to lets is continuing to rise, with research suggesting that many view the investment as a top-up of their pension pot. In fact, a National Landlords Association survey shows that as many as four out of every five of their members plans to use property income in their retirement.

The demand for private rental properties has driven the monthly cost of renting sky-high. It is therefore no surprise that those who wish to supplement their income are turning to the property market to make money. But what is it about buy to let that is leaving the more traditional investments of stocks and shares in the shade?

First and foremost, investing in property is one of the only commitments that can result in positive yields in the short-term and impressive profits looking further ahead. In fact, the state of other financial options and products is only serving to further improve the appeal of property investment. Stocks remain unstable so many people are wary of the unpredictable nature of the market. Stubbornly stagnant interest rates mean that ISAs and savings are not working as hard as they could be; and with a raft of poorly-judged pension reforms planned it is easy to see the attraction of investing in property.

A big appeal of investing in property is the sense of familiarity it brings. Most of us have experienced moving and buying homes, which enables a sense of confidence to explore the market from an investment point of view. Furthermore, the vocabulary of property investment is far more prevalent and accessible to all than the more specialist lexicon surrounding stocks and shares. Therefore, investing in property can often feel less risky than investing in the apparent unknown.

There is a sense of tangibility with buy-to-let investment that is simply missing from investing on the stock market. Investors do not have to rely on a middleman as they can act as their own landlord. On the other hand, with stocks and shares, brokers or auditors are often entrusted to make sure money is being made. But with bricks and mortar an investment becomes somewhat more controllable which, when it comes to securing a financial future, is an important psychological factor in the money game.

Perhaps the biggest benefit of this type of investment is the promise of a monthly income when the property is rented out. Also, the odds on long-term profit are far higher with property investment as opposed to stocks and shares. So although housing prices are liable to move around, their fluctuations are far removed from the dramatic downturns of which the stock market is capable. Therefore it is easy to see the increasing popularity of the buy to let investment.

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