Over 45% of landlords in the UK are female, generating £13.8 billion annually in rental income. A much more stable investment than shares or cryptocurrencies, buy-to-let properties can be an excellent venture for long term investors. It has been speculated that the nearly-equal ratio of female to male investors in the property market is based on the appeal for level-headed, cautious women of a lower-risk investment, whilst men are often more attracted to more volatile, “get-rich-quick” investments.
Always In Demand
There will always be a demand for rental properties, and thus, one can always make money on a buy-to-let investment. Certainly, some areas will have higher demand than others, which can fetch more rent, but there are other considerations that can make your property attractive. For instance, you may have a rental with more bedrooms than most in a particular neighbourhood, or a property that is wheelchair accessible, that take your assets to the top of the list.
Case Study: Sarah Wescott
When Sarah Wescott purchased her rental property, she had a small amount of savings she was looking to invest. With some financial help from her parents, she was able to purchase a flat which she let to a family member attending university. The rent helped cover the mortgage, and Sarah taught herself the financial ins and outs of mortgages, learning along the way that letting the flat herself was easier and less expensive than turning to an agency. The monthly income she earns is small, as rents have not increased as quickly since her purchase as they have in the past, but in the long term, her property will provide a substantial supplement to her small pension.
Is Buying-to-Let Right For You
Before considering a property to purchase, you must take several things into account. First, you must understand that nothing is guaranteed, and should the market decline, you could lose all of the equity you have in the property, and possibly your down payment. Next, think about the area in which you invest. A buy-to-let property will yield little if it is not in an area with a demand for rental properties. Flats in central London have a high cost, with annual gross yields (rental income divided by purchase price plus costs incurred) below 3%. The highest demand areas on the outskirts of London have lower prices and therefore higher yields (up to 4%), but understandably the demand will be less.
As Sarah Wescott learned, being a landlady is time-consuming and can require a fair amount of paperwork. A single flat is unlikely to earn enough return for you to be a full-time landlady. You need to decide if the time and effort that go into owning a rental property are outweighed for you, personally. Educate yourself on the market, on mortgage options, and on the type of tenant you hope to attract before you make any commitments, and be realistic about your earnings.
Whether or not you are in a position to become a full-time landowner and quit your day job, investing in a buy-to-let property can yield steady, if smaller, returns. For women looking to invest without needing to go through the often male-dominated businesses of stock brokerages or private banks, building a portfolio of properties can be a very attractive option. From a single flat to supplement your pension, to multiple holdings that earn an income on which you can live comfortably, any real estate investment made with the proper research upfront can yield positive results.