The Buy-to-Let market has come back to life; and there are many landlords snapping up properties to secure a healthier return compared to the return they would receive in banks and building societies. But what if you haven’t got enough cash for a deposit?
You may not realise it but you may already have the deposit you need tied up as equity in your residential home or one of your Buy-to-Lets. Experience has shown that landlords who have owned buy-to-let properties for some time will be sitting in positive equity, which could be re-mortgaged to release equity to use as your deposit on your next investment. The recent rise in property prices in some areas could mean that a negative equity property could now be in positive equity potentially allowing you to mortgage against it.
Well my property is making me money so why should I change anything? The answer to this question depends on your perception of the property market and where you think property prices are going to go. Let’s say that property prices go up by 25% by 2020, would you rather own one property that goes up by 25% or two or three ? Naturally the equity you had in the first place could be classed as cash, but cash tied up as equity doesn’t generate you any profit. If you used the equity to buy rental properties you will have an income from the rental, and then also reap the rewards of an increase in capital growth.
If this is of interest to you and you want to discuss property investment please contact either Rob or Grant.
