Is now a good time to invest in buy-to-let?
News that house prices dipped slightly in the last quarter, for the first time since 2012, will no doubt make some jittery about investing in buy-to-let, but you could argue that now is the best time to snap up a rental property.
There’s a saying amongst season property investors that you don’t make money when you sell, you make money when you buy. In other words, you need to ensure that you buy at the best price.
It makes sense, therefore, to invest when prices are falling and sell when they are rising, not visa versa, which is often what unseasoned, anxious investors tend to do.
Admittedly, it takes some nerve to shell out thousands for a property when you can see that the value of that property is depreciating. It’s far easier to invest when you can see that the price is escalating by the minute.
However, if you end up buying a property when prices peak, it’s easy to lose money when they fall. On the other hand, if you buy when prices are close to the bottom of their current cycle, you’ll make a profit as soon as they start to rise.
So how do you know when the market has bottomed out? You don’t, you have to take an educated guess, but if you can be sure that you can let the property at a reasonable return, you should be able to hang on to it until the price rises, so it’s a win-win situation. For help deciding what to buy, read our tips section.
It’s reassuring that the Halifax, one of the biggest lenders, doesn’t expect prices to continue to fall, due to an overall shortage of properties and low interest rates.