Buying To Let Is It For You

Buying To Let Is It For You

Buying To Let: is​ It For You?
If you read the title of​ this article and thought to​ yourself, Let what? What am I​ letting happen buy buying? And what am I​ buying?, than this article is​ definitely for you .​
First let me establish that the buy refers to​ a​ house and second, the let part, that refers to​ renting that house out to​ someone else .​
Basically it​ means that you buy a​ house and let someone else pay the mortgage and live in​ it .​
There are, as​ with everything, some really good aspects of​ this kind of​ arrangement, and some really bad ones as​ well .​
This is​ not an​ agreement to​ enter into frivolously for if​ you do, you very well may regret it​ for the duration of​ your mortgage.
Basics of​ the Buy To Let Agreement
Buying to​ let, or​ buying to​ rent, simply involves a​ person finding a​ house, signing for a​ loan, and then immediately renting it​ out to​ someone else .​
The house is​ in​ the buyer's name, but then it​ is​ contractually signed over in​ a​ rental or​ lease agreement to​ a​ tenant .​

Why Would I​ Want To Do This?
This is​ a​ great way to​ generate some extra cash flow, buy a​ house to​ later sell for profit, or​ buy a​ house to​ later dwell in​ yourself .​

Extra Cash Flow
When you make the purchase of​ a​ house in​ order to​ rent it​ out to​ someone you go through the loan process just like with any other house .​
Once you have established the mortgage payments that you will owe every month you then can set the rent price .​
The rent price is​ set by you and can be whatever you want it​ to​ be .​
If you are paying $500 per month and want to​ rent for $800, you are making $300 profit every month .​
You can set the price of​ rent to​ whatever you think that the market will bear.
Buying For Selling
You can get an​ interest only loan, the kind of​ loan that typically has the lowest payments for the first few years, and buy yourself a​ house to​ rent .​
Assuming that instead of​ those $500 payments per month, and now your mortgage is​ only $400, but you are still charging $800, you will have a​ lot of​ money to​ put back into the house each month .​
You can, instead of​ spending or​ saving the profit from the renters for personal use, put it​ right back into the house in​ the form of​ repairs and upgrades .​
The renters think that they are getting a​ good deal because you are constantly doing good things to​ the house that they live in .​
You will be thankful and grateful to​ the renters because they will be paying for your mortgage and for the repairs that you are doing .​
After a​ few years you can sell the house at​ an​ inflated price cue to​ all the things you have done to​ it​ and you can make a​ lot of​ money on the deal.
Buying For Living
If you don't have the money just yet to​ make the mortgage payments than perhaps you could consider renting your property out for a​ while until you can get to​ point where you can afford to​ live in​ it .​
Or, perhaps you want to​ buy a​ summer home but don't have the means to​ do so .​
You can buy now and rent it​ out until you have the resources available to​ take on the extra mortgage payments yourself.
If it​ sounds too good to​ be true…..
Renting isn't the wonderful, astonishingly simple way to​ make hordes of​ extra cash and become the next big real estate mogul .​
There are some negatives to​ it​ as​ well .​

Landlords and other bad things
If you buy and rent out a​ house, you are the landlord .​
You have to​ make sure that the tenants are paying rent on time, you have to​ fix things that break or, if​ you can't fix them, you have to​ pay to​ get someone to​ come out and fix them .​
You have to​ make sure that you have tenants that are not going to​ tear up the house and leave it​ is​ shambles when they leave, especially if​ you are renting in​ order to​ later sell for a​ profit .​
Any landlord will tell you that renting to​ good tenants is​ a​ great experience, but renting to​ bad tenants, nothing could be worse .​
If you don't get tenants that will treat the property just as​ good or​ better than you will, than you will probably end up losing money on the deal.
What next?
If you feel like the role, or​ should I​ say, job, of​ a​ landlord is​ for you, than go out and start looking for someplace to​ buy .​
Make sure that you have a​ clear idea of​ what it​ is​ that you want to​ do with that property and get the loan that is​ most appropriate for your situation .​
If you don't think that you will do well getting called to​ fix the roof, seal the plumbing, spray for termites, or​ any of​ the many other things that have to​ be done for a​ house, than maybe you ought to​ stay away from being a​ landlord .​
Perhaps the only thing worse than renting to​ bad tenants is​ renting from a​ bad landlord.

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