Buy to let investing is a doddle, you just buy a property, stick it up on the lettings boards, and you get rent-paying tenants, "Isn't Land-lording Brilliant". It is dead easy to lose everything on buy to let property investment, I would steer well clear.
Of the two statements above, both are wrong but only one is a myth. The first one is a myth, buy to let investment is not easy, but the second one is also wrong; it is easy to lose everything on a buy to let investments, but only if you do it very badly, the better you do it the less likely losses become. Here are 5 myths on buy to let investment.
Buy to Let Investment is Easy
Many people will tell you that buy to let investment is a simple case of buying a second property and renting it out to the locals. This is true to a certain extent, and some people who go into it in this way do fine. Others lose everything. The law is geared up to protect tenants, not landlords and there are tenants out there who are professional bad tenants, staying in lush properties for a pittance, while the landlord can't evict and must maintain the property.
Buy to Let Investment is a Full Time Job
Many people say that you simply can't do buy to let investment without giving up your job. This isn't true. Managing even one property can be a full time job, but if you factor in management and maintenance cover into the calculations you can keep your job and run your first property.
You Can't Calculate Returns on a Buy to Let Investment
It is extremely difficult to calculate buy to let return on investment; extremely difficult, not impossible. The calculations are complex, but we have offered a comprehensive guide on this website, and you can find a buy to let investment calculator on many websites.
High Demand Doesn't Always Mean High Rents
This is a doozy. High demand doesn't always mean high rents, of course it does. In property investment buy to let the rent is determined by the demand. If demand for property is outstripping supply landlords would be foolish not to increase their rents, and it never happens.
You Can Become a Millionaire in a Year
We have all (well those of us involved in property) had the emails offering to make us a millionaire within a year. To make matters worse most of them say that this will be done with very little work from us. Even if you have a plan and are able to borrow a million in a year, your debt would be at least 800k.
Most property investors never make millions, for the many that do it takes at least 5 years and a lot of time, money and effort to get there.