Is This a Good Time to Become a Buy-to-Let Landlord?
2020 has been a turbulent year for pretty much every industry, but could it also be an opportunity to try something new? Many people harbour a dream of becoming a buy-to-let landlord and it might be the right time to make the leap. A number of factors have fallen into place to create an environment that could see buy-to-let landlords thrive in this new normal.
Yes, there is still uncertainty about what will happen with lockdown, and we are now officially in recession. However, If you want to start building your property portfolio and becoming a buy to let landlord, here are the reasons why 2020 could be a good time to start taking in tenants.
More People Are Looking to Rent Than Ever
One key reason for becoming a buy-to-let landlord right now is that there has never been more tenant demand. The ARLA Propertymark July Private Rented Sector report for July showed a record high in prospective tenants signing up with letting agents. The average branch registered 97 new rental-seekers, up from 79 in June. The previous high came in January 2020, when there were an average of 88 new registrations.
With more tenant demand, landlords can enjoy less vacant time in their properties between renters and there is an opportunity to earn more in rental. You might also have more choice over who to rent your property to, allowing you to secure the tenants who you feel will best look after your property.
Second Income as a Buy-to-Let Landlord
If the coronavirus pandemic has taught us anything, it is that the job market is not as secure as we might previously have thought. Many people have been laid off, whilst others have had their working hours reduced and some self-employed workers haven’t worked since March. The idea of opening a second income as a buy-to-let landlord could be a very sensible move in the event of lockdown persisting into 2021.
In order to make a good buy-to-let income, you need to choose the property you buy carefully. Look at local amenities, schools and transport links and see if you can find a good deal on your purchase.
Reduced Stamp Duty Until March 2021
One of the buy-to-let landlord costs that you might not think about when taking the plunge and buying rental properties is Stamp Duty. As a measure to get the property market moving, the government has slashed the amount of Stamp Duty land tax charged on purchases.
For first properties, you won’t pay the tax at all on purchases of up to £500,000. If you are becoming a buy-to-let landlord, you will pay 3% on these deals, which is still a better deal than previously. Between £500,001 and £925,000 will see a charge of 8%, it is 13% between £925,001 and £1.5 million and 15% on amounts over that.
This deal is only in place on these buy-to-let landlord costs until March 2021, which could be a deciding factor in whether you become a landlord this year.
Buy-to-Let Property as an Investment
Not only do you receive rental income as a buy-to-let landlord, but you also own a property, which may increase in value. Of course, housing prices fluctuate, but if you have the patience and means to wait for the good times before you sell, it can prove a profitable investment.
At a time when other forms of investment can seem risky, property is seen as relatively secure by many people in a similar position. There are no guarantees of course, but it is another potential bonus of being a landlord.
Interested in Becoming a Buy-to-Let Landlord?
If you are interested in becoming a buy-to-let landlord, Executive Property Management can help ease you into the role by taking time-consuming and stressful property management duties off your hands. We allow you to concentrate on the many other tasks and demands on your time that are a feature of modern life, and ensure your tenancies run smoothly. Contact us today to talk about what we can do for you.