Buy to rent – advice to investor

Homeowners and property investors in the UK increasingly concerned over the reduction of their income level. Last year the average yield of an investor who acquires a property in the UK with the aim to rent it decreases on the background of a sharp rise in property prices. Especially noticeable yield reduction for real estate in London, where rent growth has not yet kept pace with rising prices.

Average rental yield in the UK in the third quarter of 2013 was 6 % , which is 0, 7% lower than the same time last year, when the yield was 6.7%.

The real estate market in the UK has quickened, showing a significant increase in the number of transactions and rising prices in 2013, however, this situation is a double edged sword for the market. With the growth of real estate prices monthly yield is greatly reduced and investors now have to lay a lot more risk, hoping their investment business plan.

Investors must carefully assess their business plans and to ensure that the invested funds can operate effectively. Perhaps investors will have to give up additional costs – for example, to manage your property and manage it yourself. To bother about technical maintenance and about repair. To maintain a decent condition of the property.

To build a good effective investment portfolio it is important sometimes not profitable to sell, and cheap to buy. Your property is should be your asset that brings you profit each month, not the subject of speculation on prices, when you can sometimes even lose, if the calculation of the growth rates is wrong.

More efficient to buy an old estate, to invest in repairs and upgrades, thereby increasing its investment attractiveness.

The second piece of advice – every investor should have a long term perspective., no need to pay attention to short-term fluctuations. Real estate – an asset that grows in value in the long run always. Therefore, look for interesting options in the market – those that are below market value and keep your property as long as possible – the fundamental causes always form an uptrend in the long term.

® Alice Morgan 13.12.2013.