17th March 2021

Buy-To-Let Property Investment

A lot of people around the UK have invested in property in order to make a passive income alongside their normal line of work or as a full-time moneymaker. When discussing investments, there are some that are risky and there are others that pose less of a risk, property being one of the latter. Overall, the trend for property prices in the UK seems to constantly rise, making a property purchase a great investment. If you have the cash to buy a house outright, you’re able to then rent it out to receive a monthly fee, then when the price is right, you can sell on the home for a tidy profit.

At Horizon Sales & Lettings we provide property that is perfect for investors. This property is less expensive and requires work, however, the upside is that you can invest in a property for a great price.

What is a buy-to-let investment?

Buy-to-let is the process of buying a property as an investment with the intentions of renting it out. When looking to do this, you will need a buy-to-let mortgage, rather than a standard residential one or a cash lump sum.

Investors can make money this way by generating an income via the rent charged (so long as it's more than the monthly buy-to-let mortgage repayments), making a capital gain when they come to sell or, in many cases, both.

But, like all investments, there are risks attached to buy-to-let.

For example, you could be hit by rising interest rates, stuck with difficult tenants or unable to sell if the housing market changes. So if you require advice, we have the answers.

Why buy-to-let is a great investment

Buy-to-let is a great investment, if you’re looking for a passive income from a secure investment that features little to no volatility then becoming a landlord could be the way.

There are plenty of advantages which help to influence people to go through with an investment like this.

Advantages of buy-to-let

There are many benefits when looking to invest in buy to let:

  • Buy to let is a great and safe space to invest, as there is a continuous demand for property to rent. 
  • You will earn rental income.
  • When investing in property this way, you have the opportunity to take out insurance when looking to cover the loss of rental income, damage, and legal costs. 
  • Although property prices may rise and fall, property is a safe long term investment. Due to the fact it is long term, the value of property should increase meaning you should come out with a profit when selling the property. 
  • Due to the property increasing in value, there is a potential to generate capital growth as your money grows.

Tips for Investing

If you’re starting out with a buy-to-let it may be a good idea to purchase the second property near to your home. This will make it easier for you to manage as you know the area very well. Horizon Sales & Lettings operate in the Teesside area, this is our local area and we know it extremely well.

Becoming a Landlord 

There are of course some legal responsibilities that come with owning and renting out a property. Your tenants must be looked after and protected by a contract. You must make sure that all the legal proceedings are in order.

Buy-to-let Tax

There are also a few things you must keep in mind regarding tax:

Income Tax - The income you receive as rent is liable for income tax. This should be declared on your Self Assessment tax return for the tax year it was earned.

Capital Gains Tax - If you’re a basic rate taxpayer, CGT on buy to let second property is charged at 18% and if you’re a higher or additional rate taxpayer it’s charged at 28%. With other assets, the basic-rate of CGT is 10%, and the higher-rate is 20%.

Mortgage Interest Relief - With the rules around this subject constantly up for debate you must keep on top of the latest information. As of 2020 you are unable to deduct any of your mortgage interest payment from your rental income before paying tax – instead, the entire sum of your interest payment will then qualify for a 20% tax relief.

Why Choose Horizon to Invest in Teesside Property?

Horizon Sales & Lettings is an Estate Agency specialising in Teesside and the surrounding area. We are local to the area and we know our market well! Here at Horizon, we have strong experience with buy to let properties: buying, selling and lettings management. A lot of our business is repeat business, meaning our previous clients are more than happy to use our services again. 

If you are interested in investing in Teesside property, contact us today!

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