Real Estate Investments

[Cyclefrance]

Buy-to-lets have really taken off over here with cheap loans and a period of sustained growth in the hosuing market. The things to keep in mind are:

1. These are generally long-term investments - but that's not saying that in a rising market a quick turnround is not possible.
2. You can hit bad patches between rentals - keep in mind that at the end of a rental contract, if the tenant moves on then you may suffer a period of no-income while finding a suitable replacement tennant. During this time you will still have to meet your outgoings.
3. The rental market could weaken - if the market becomes over-supplied then rental rates would drop - calculate how big a fall you could weather and for how long as part of your assessment.
4. These contracts aren't liquid - in other words if you do need to get out of an ownership deal it may take you weeks/months to do so - factor this in.
5, Letting can be a minefield - better to use a reputable agent, rather than end up with a tenant who won't pay and who won't move out either - but remember that letting agents don't come cheap either...
6. Don't forget the tax on your income after meeting expenses - this could reduce your expected return substantially.

All the above said - bricks and mortar have generally proven to be good long-term investments, and the attraction of the buy-to-let scheme is that you gain two-fold over time - rental income plus capital value growth. Get the right property/ies and tenants on board and you should maintain a smile on your face throughout....