Becoming A Landlord - Will It Make You Rich?

Published: 12th October 2009
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We all want to be rich and we know that property is a way to do it. Look at any rich list and property owners are at the top. But how easy is it to make money from property?

Many people have their moments, perhaps just one, when they imagine themself investing in property and becoming a landlord. In these times of recession such rich daydreams are not so straightforward, and dreamers are often awakened into a reality of property freefall and risky investments. However, if you're grounded in the realities of the economy and a little bit of an opportunist - thinking it can't be all bad - maybe you're ready to find out more, even to take the leap! Becoming a landlord and making lots of money from it are not as far away from your grasp as you might think.

Market analysts have predicted that the bottom of the market has already been met or soon will be. Such 'peak to trough' decline is perhaps not great news for existing landlords - but, like anything, it depends how you look at it. Experienced investors indicate that they are looking to grow their property portfolios.

In fact, there is no evidence that landlords are turning their backs on property investment. In a recently conducted survey, 96% of investors indicated they would retain their properties at least for the next 12 months, whilst the majority of property investors possess a long-term vision for their investments - over 33% will hold on to their properties for 10 to 15 years. This indicates a great sensitivity to one of the key aims of property investment - building for the future.

Many landlords have retirement, pensions, and the compilation of wealth in mind when they climb onto the property ladder - becoming a landlord is something they undoubtedly have a long-term aspiration for. Tracy, an agent for a thriving Gloucester (UK) letting agents, commented "in many ways, markets blowing hot and cold in the short-term aren't a concern for our landlords - their property is usually well-financed and paying for itself. We always ensure when we're advising our property investors, or anyone becoming a landlord, that they follow this principle: take the long view but cover your costs".

Although the credit crunch has presented problems obtaining mortgages for some landlords, other landlords have made sure they found ways to finance, in the knowledge that the rental market still holds a strong demand. Although there may be less mortgages available, there are still mortgages out there to be found. And enough landlords are finding them, continuing to help the growth of the private rented sector and offer housing possibilities for those hit by the recession.

If you're still thinking, 'Is becoming a landlord for me? Is it worth it?', 'Can it make me money?', here are a few figures to consider. The Association of Residential Letting Agents' Review (from January 2009) conducted a survey of letting agents across the UK. The findings it presented indicate that landlords have prospered over the last decade and showed an average return rate on rental property investments over the past 5 years as 10.59% for cash purchases and 21.54% for mortgaged investments. And therein lies a very important point. If done correctly, buying property and becoming a landlord can still be a very profitable investment indeed.

Tags : property, money, property investment, buy to let, landlords, real estate

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