• Alaine Bradbury

Whats Buy to Let ?

This is the original strategy in property investment and still the most popular strategy.

Most investors will simply buy a property to let it and have somebody else pay the mortgage, whilst they enjoy a modest profit each month. BTL (buy to let) is typically a long-term exit plan as you create an income each month. The larger pay-off is many years in the future, you have benefited from your tenants paying the mortgage and giving you a income ( smaller monthly income compared with other strategies that promote large one off profits like flips) but when you sell you should have gained a good level of capital appreciation and built up your income so you release a decent sized lump sum of money.

What’s it all about?

Many investors follow this strategy to enhance their pension and buy a one or two properties with the idea of selling them in years to come. If you hold on long enough you could be in a position whereby the mortgage has been paid down completely by the tenants and upon the sale of the property you release the full value of the property minus any selling costs of course. You will also be subject to paying capital gains tax (C.G.T.) on the sale of any buy to let property. It’s worth speaking with a property tax specialist before arranging to sell any of your buy to let properties.

If you choose an area wisely you could look to pull out equity in year 5, 10 and so on. That is the basic idea of leverage. If you have bought a property under market value in an area that’s increasing in prices, then that’s also a potential financial benefit. There’s also the B.R.R.R strategy but let’s not get carried away I’ll explain that on another blog post.


Buy to let is a simple process and one most people understand.


This is really quite straight-forward too, if you were going to buy a property to let out to tenants, then you would most likely get yourself a buy to let mortgage. This differs slightly to a standard mortgage as it’s specifically for a buy to let. You will likely have to use a bigger deposit as the loan to value will be a little lower than standard residential mortgage.

Another difference is stamp duty land tax will be different and to check the rates you can visit various websites to see what a second home rate would be. If you are buying in your own name, as a second home or under a SPV limited company the rates can vary.

Another option is to use cash but savvy investors will likely always use a mortgage product so they actually put less capital in to the property. Again leverage the buzz word appears.

For example; if you had £100,000 and you could buy one property with cash, or you could buy four properties if you used mortgages, what are you going to do?

Spread the risk across more properties or put all your eggs in one basket and await a return in the future?

What's the desired outcome ?

Strictly speaking an investor would buy a property and let it with a long-term exit plan. The monthly net profit would be ticking over and most people have one eye on capital appreciation and what the property might be worth in 10 years or 20 years down the line.

Location and a handle on the area and the supply and demand are an absolute must that's where you focus on Yeild.

So overall typically buy to let is a long-term exit with (mostly minimal) but steady, monthly net profits.

Pros & Cons of Buy to Let


  • Easy to understand process

  • Limited experience needed

  • Easily outsource management to give a hands-free investment

  • Easy to find suitable tenants

  • Low risk in comparison to other strategies

  • Produces monthly cashflow


  • Maintenance costs and wear and tear costs each year

  • Problem tenants

  • Void periods

please note that this is not to be taken as financial advise

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