Deal Sourcing UK Investment Property

Is Buying A Property And Renting It Out A Good Investment In The UK?

If you’re searching for monthly income or capital growth, a buy-to-let purchase might be a smart decision. Due to low interest rates, your savings may not be yielding a satisfactory return, prompting you to consider property investment. Is it, however, worthwhile in 2021?

What does the term “Buy-To-Let” mean?

The word “buy-to-let” refers to acquiring a house with the intention of renting it out rather than living in it. For investors who need a mortgage to purchase a buy-to-let home, mortgage lenders have special houses. Because of the increased substantial risk to the mortgage lender, these usually have higher interest rates.

Is Buying a Property and Renting It Out a Good Investment in the UK?

Rental Property Is In High Demand

Many parts of the United Kingdom are also too costly for many people to afford to purchase a home; for some, renting is the only option. As a result, residential properties in the United Kingdom are in high demand. According to many real estate studios, by 2045, 55 percent of the UK population will be residing in Buy-To-Let properties.

There is a lot of proptech software where you can search Buy-To-Let assets if you are searching for them. DealSourcing is one of the most well-known. This proptech program was able to simplify the process and build a network that serves as your personal property sourcer. The platform is able to identify assets from all over the internet and sort them by ROI thanks to algorithms and automation.

It lets you save time, money, and effort! This platform’s main innovation is its ability to locate high-yield properties. If you’re trying to invest in Buy-To-Let properties, having is a no-brainer.

The software also estimates the return on investment for any property on Rightmove, Zoopla, or Gumtree and identifies assets for sale that are below market value, saving buyers hours of research time.

Interest Rates Are At Historic Lows

Since many mortgage lenders sell buy-to-let mortgages, you can invest in a buy-to-let property even though you don’t have enough cash to pay the whole purchasing price. With low interest rates and mortgage lenders competing for your company, you can lock in a low rate deal.

Rental Income and Capital Growth

You will make a profit on your buy-to-let property investment in the UK in two ways. To begin with, the buy-to-let property will have a rental yield, which is the amount of money you get in rent less your purchase and other operating costs.

If house prices have risen, you will be able to make money when you sell the home. Property prices will still fluctuate, but they are expected to increase in the long run. It could take a few years before you see substantial investment returns. On the other side, you could strike it rich and make a quick profit.

Recent legislative and tax reforms have had an effect on the profitability of buy-to-let investments. However, the difficulties should not end there; you must still address things such as void times and poor landlords.

Relief from Mortgage Taxes

The majority of buy-to-let owners would have to pay income tax on the rental fees they earn. Until 2016, buy-to-let investors could subtract mortgage interest and other deductible expenses from their rental income before estimating their tax liability. You will no longer be able to subtract all of your mortgage payments from your rental revenue to lower your tax bill until 2021.

Capital Gains Tax

You will have to pay capital gains tax on the income above your capital gains tax limit when you sell your property investment.

Surcharge on Stamp Duties

When you buy a house in the UK that isn’t your primary residence, you’ll have to pay an additional 3% stamp duty on each band.

Minimum Energy Efficient Standard Regulations

You would have to spend money to make sure your investment property meets the Minimum Energy Efficient Standard regulations. Both rental properties must have a current Energy Performance Certificate, and beginning in 2020, landlords will no longer be able to rent out properties with an Energy Performance Certificate level of less than E.

Costs of Maintenance and Management

You should consider whether the rental revenue you will generate can support the mortgage payments as well as regular maintenance, administrative, and insurance expenses.

Brought to you by gives you control over the force of automation. With the click of a mouse, you can search over 200,000+ Below Market Value deals (Buy-To-Let, HMOs, and BRRR) with ROIs of over 15%. With our simple and easy-to-use tools, you can find high-yield properties quickly.

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