Buy to Let: Investing in property
Rising house prices in the UK have made buy-to-let a popular way to invest. They provide a staple income from rental receipts and a way to invest/accumulate wealth if house prices increase.
However, there are some risks:-
1. the landlord takes a loan to buy the property, with an expectation the property can be sold later for a higher price, and this doesn’t work out.
2. the rental income will meet or exceed the cost of the loan – the property is left vacant for a period of time with no income. Remember, the mortgage still has to be paid.
If the landlord cannot meet the conditions of their mortgage repayments then the bank will seek to take possession of the property in order to and regain the loaned money.