Buy-to-let property has recently taken the property market by storm but many are still unsure what the term 'buy-to-let' actually means. In this blog post, Investment Consultant, Michael Johns, focuses on what buy-to-let property is and how to use it to achieve high yields.
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Please see below the full transcript of the video:
Hi, welcome to Ask Johnsy, a series of videos that delve into the life of an investment consultant. Please hit the subscribe button below so that you’ll be informed of all future videos in this series. Let’s look at today’s question, which is:
“What is buy-to-let property?” – Len, Norfolk
The latest question is from Len and he’s in Norfolk, hi Len. He’s just asked the most simplest question really, but very important, what is buy-to-let property? Well, it differs from the normal residential property in that you’re buying that property with the sole purpose of letting out to someone. Now, that can be someone that you know but more often than not, you’re renting through a management agent to somebody that you don’t know.
Now, why do you do this? You rent for two reasons: one is because you want a rental yield and you’re buying this rental property in order to get an income, it gives you a revenue stream, you’re getting that money in your bank every month, that pays for your costs, pays for the property, also gives you an income which is obviously taxable. Secondly, you’re investing in property to get growth. So, you’re going to get a good amount of growth from your property if you’re in a good location. So, location is very, very important. And generally speaking, buy-to-let property is very popular around high-demand areas where there’s a lot of commerce, inner cities particularly, but that’s key to your success both from a rental perspective and from a capital growth perspective. Thank you.
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