7 years ago by Nigel Kags and 1808 Views
Rent and Tenant
As mentioned before, there is a risk and return to buy-to-let property investment. Rent is one of the ways you can earn a property through buy-to-let investments, but the amount of rent you can charge depends on several factors which may be out of your control. Moreover, not having tenants mean you cannot charge the rent you expect. As a result, you cannot obtain your mortgage repayment.
Market Trends
Market trends are among the factors that are out of your control that affecting the risk and return of a buy-to-let investment. For instance, if the property’s market price falls, your property’s market value might fall as well. When that happens, it’s unlikely that you can sell your property for the price you hoped. In that case, the sale price might not cover your whole mortgage so you’ll have to cover for the difference.
Repairs, Maintenance and Difficult Tenants
The necessary repairs and maintenance of the property can add to your costs as you need your property looking attractive and welcoming. Furthermore, if you come across difficult tenants, they can bring you trouble as they may damage your property in the long run. These things are among the common risks for a buy-to-let investment, which can decrease your profits. On the other hand, if the housing market is excellent, make sure you keep the property well maintained, find good tenants and have things under control, you might be able to do well and earn good revenue through this property.
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