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The problems with Buy-to-Let for Investors

 Why should Investors use Joint Equity rather than Buy-to-Let ?

There are many problems associated with Buy-to-Let. Here are the main ones:-

 Joint Equity does not have the problems of Buy-to-Let investments

In buy-to-let you own the property outright and your security is your name on the deeds. The problems are yours.

It is common for the buy-to-let owner not to want to get involved in the day to day running of the property and they employ estate agents to manage the investment by finding the tenants, maintaining the property and collecting the rent.

The quality of service provided by the Agents is very variable and can be costly - up to 17.5% of the rent collected.

 Buy-to-let & low profits

The biggest problem for Buy-to-Let owners is the low profits that the properties generate due to high direct and indirect costs which often means that the buy-to-let property makes no annual profit and the investor relies on the value of the property continuing to rise to provide the return on investment.

This model does not work in a falling market or where the rate of interest paid on your mortgage goes up

 The main problems

However, buy-to-let has some other significant problems and indirect costs;-

• 125% rent cover over interest
• Costs directly linked to the cost of the mortgage
• Long and regular void periods between lets
• Wear and tear costs can be high
• Damage some is unavoidable but some is malicious
• Non payment of rent always a problem
• Upgrading to stay with market fashions is often required to ensure you can continue to let the property
• High management costs by estate agents
• Difficult to identify and operate in property price “hot spots”.
• It is exploiting rather than helping the renter

 Joint Equity the real alternative

Joint Equity avoids all these problems and pays you more for every £ invested

Read on to find why Joint Equity is the real value alternative to Buy to Let