Most people understand the concept of buying a flat or house and renting it out to a tenant. This makes Buy To Let a fantastic place to start as with a little research, you will be able to avoid a lot of the pitfalls that come with investing in a new industry.
The sums you will need to work out your yield, project costs and profit margins are not overly complex. As an experienced investor this one of the reasons I still love Buy To Lets. I can look at a deal and very quickly know if I will make money from it!
Complex projects, such as developing a large property into a HMO, can be very expensive. Adding individual bathrooms, restructuring interior walls and extending a property can quickly run your project costs into the tens of thousands of pounds! I know because I’ve done it.
A Buy To Let on the other hand may not need any work doing to it at all. Cost-wise it may be as simple as installing a Fire Alarm, getting your safety certificates and giving the place a lick of paint. This would mean your costs are not going to have to stretch far from your initial investment for the deposit.
When you do start to look at other strategies, many lenders like you to have some Buy To Lets under your belt. Not all, but many do. This will increase your access to finance as you are considered a safer pair of hands for the lenders.
If you are starting in Property, it is therefore worth acquiring some Buy To Lets to open the door to cheap Bank Finance at a later stage.