In this guest blog from Chris Wood, MD & Founder of Portolio, he explains why it’s a good time for landlords to invest in tenanted buy to let property in Scotland.
Wondering if now is a good time to invest in buy to let property in Scotland?
There was a real buzz of anticipation in the air for property investors when the market reopened after lockdown. What we’ve seen since has been a very competitive space, with lots of homebuyers choosing now as the time to make their move - making it a pretty hot market for those looking to invest.
Between that and the holidays, looking after the kids, and the fact there aren’t really any super cheap deals around for investors as they’d first hoped, some have put property investment on the backburner - whilst still keeping one eye on what’s out there.
Saying that, there are some great investment opportunities on offer for those who want to purchase a buy to let, so it may still be tempting to make that all important investment right now (as many are).
But, whether you’re new to the game, or not, is now really a good time to buy in Scotland?
Before lockdown, there was a bit more scarcity when it came to good investment property opportunities - and we all know there’s still nothing like good old fashioned bricks and mortar for creating wealth.
The properties on the market right now are coming up for a myriad of reasons (some may have previously been short-term lets, or from some of the 48 per cent of landlords who have changed their plans due to COVID).
However, there remains a lot of uncertainty around what the future holds, so you may still be feeling a little hesitant - which is completely understandable.
In this article, I’m going to explore more about the current property market in Scotland, along with a potential solution that means you can invest in buy to let with confidence whilst receiving rental income from day one.
Is now a good time to invest in property?
With some exciting new opportunities becoming available on the market and some great buy to let mortgage rates available right now, we’d say it’s overall a good time to invest in property.
Especially with rents reaching record levels, strong yields and the starting point for land and builds transaction tax (LBTT) for Scotland rising from £145k to £250k, now is a good time for investors who have the funds - despite the Additional Dwelling Supplement still being in the mix.
Our advice is that if you’re looking to invest here in Scotland - and especially if you see a property you like - don’t wait on prices coming down to take advantage of those exciting new opportunities; it’s unlikely to happen, and you may regret missing out later.
To risk being cheesy for a second, I’m going to quote an old property saying: The best time to invest in property was yesterday - the second best time is today. That’s still valid today.
On the other side of the coin, sellers should not be afraid that they won’t get a good price right now, as pre-COVID values should hold for now. Of course, it’s impossible for us to say what the future may bring, but overall, property is still one of the best investments you can make.
In either case, we recommend you speak to a specialist estate agent who’ll be happy to listen to what you’re looking to achieve, and provide you with some free, impartial advice to help you get there.
But there IS a way to invest that’s even more attractive than going down the traditional route; buying tenanted property.
Receive rental income from day one
Buying tenanted property is not the way things are usually done, as it’s always been more common to buy an empty property, make it compliant, carry out any renovations and then get a tenant inside.
Essentially, buying a property with the tenants still living in it bypasses all of that hassle, and ensures you can enjoy all of the following benefits:
- Instant rental income
- Fully compliant properties - no safety certs or remedial work costs
- No void periods before a tenant moves in
- Often buy with all the furniture included
- No buyers’ fees (at least, if you buy through us)
- Feel confident, with no closing dates
In short, buying a tenanted property maximises cash-flow and reduces capital expenditure. We’re currently selling fixed price properties at around home report value, and because these properties are tenanted, it means you’re not competing against homebuyers.
TIP: Check out what to look for in your next investment property and the priorities tenants are going to have going forward, via our recent blog on the subject.
The way we do this is much closer to traditional estate agency methods than you might
think. We still get a home report, we still have nice photos and we’re even getting state-of-the-art interactive video tours!
With so much increased activity, high sale prices in cities and values holding strong, buying tenanted property makes a lot of sense - with plenty of capital growth ahead.
Psst! When buying tenanted property, it’s always prudent to also consider the tenant, their plans for the future, and whether they are likely to be impacted by the effects of COVID.
Our goal is simply to work for the landlord who is selling the property, to achieve the best possible outcome for all involved.
By selling with the tenant still living there, the selling landlord also has the following benefits:
- Rental income right up until completion
- No void utility costs
- A simpler, speedier process that’s hassle-free
- Sell your property now, as is – with no need to evict your tenants