Is Buy-to-Let Investment Still Worth it?

Here at Flambard Williams, property still remains a great investment. This is one of the few investments that you can easily do in your spare time, allow you to involve other members of your family or friends, and can lead to a very satisfying business that you can build over many years. The only question is, with the latest raft of changes to the tax laws surrounding property investment and all the other restrictions, is it still worth doing?

The key question you need to ask is, ‘where else can you achieve returns that offer the security of an asset that has a physical element that will therefore never be valued at zero?’ This is unlike stocks, where the value is related to performance and company survival, one that in normal market conditions is an appreciating asset, and something that ultimately you could live in and utilise, should circumstances dictate. The answer to this? Pretty much nowhere, therein lies the attraction of property, despite the more challenging market we are faced with today.

“Anywhere that you can achieve a 4% NET return and above is worth looking at, particularly in present circumstances with rates in the UK (0.75%) sat as low as they are.”

What are your likely returns? There is no one number that can be offered here, and returns may vary across a broad sector, from HMO’s at 20-30% returns, to high-end property in the key London areas, where returns drop to around 2%. In our opinion, anywhere that you can achieve a 4% NET return and above is worth looking at, particularly in present circumstances with rates in the UK (0.75%) sat as low as they are. Remember, this is a NET return, so all costs of running the property are covered, equating to roughly a 5.5% gross number.

“The market has grown considerably over the last few years with demand set to continue to grow.”

The above returns are based around the standard AST model, which is the basis for most landlords coming to the market. There are other more innovative ways to gain market-beating returns and that is to use more dynamic models, ones where you rent the property for very short term holiday type lets, where returns can hit comfortably north of 10% NET. With no need for you to do anything more than pass your property across to us and use our new SkyLet model, you will be able to take advantage of our network of professional corporate clients in city centres who are looking for short term lets to provide accommodation to key workers who are looking for more than just a hotel room. This has led to a growth of properties that provide all the comforts of a home at the cost of a hotel or in many cases less. Proving ever more popular the market has grown considerably over the last few years with demand set to continue to grow.

One such project is a property that we are marketing in Liverpool, sat on the waterfront and located adjacent to the M&S Arena it is popular with clients who both wish to visit the city or attend an event at the arena, and to date has enjoyed occupancy rates in excess of 80%, and climbing. All this adds up to one thing, and that is a great investment, and now we have the opportunity to offer this to our clients, and with NET returns in excess of 10%, we believe that there is nothing else out there that offers returns of this magnitude, in a great location, in a major UK city.

So, with this, and many other properties on our books that offer great returns, despite markets of late we do still believe that property is a market for the future, and once all the Brexit noise has gone, one we feel will once again gain in value as well as income.

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