Over the last decade or so, there has been an army gathering within these shores. Quietly amassing, the amount of amateur investors using buy-to-let as their go-to investment vehicle has now reached record proportions and one would be forgiven for thinking that they are all in it for the same reason.
However, that doesn’t seem to be the case. While, in essence, it does all boil down to money at the end of the day, the primary reasons for those investing in property to rent can vary significantly when you ask around.
To give the children a helping hand
This is one of the most popular responses when amateur landlords are questioned about the motivation behind their buy-to-let journey. Buying property to rent out gives parents a few options. They can either invest early while their children are still living at home and reap the rewards of having tenants in the property at a later date, or they can simply obtain a buy-to-let mortgage and have their kids as tenants with a view to selling the property at a later date and the hope of drawing a significant profit on capital gains.
To make their money work harder
In years gone by, having a stash of cash in the bank used to accrue a decent amount of interest whilst simply sitting there. Not anymore. With interest rates so low, even a sizeable amount of money will barely return enough money to cover the weekly food bill of the average family. So, with this in mind, those who have a decent chunk of change sitting in their bank accounts have opted to make it work for them by putting it into property instead.
To get a footing on the property ladder
Surely, if you become a landlord you would already be on the property ladder, no? Well, yes, but many young folk are becoming landlords before they leave home and buy their own place. This is especially true of the London’s youngsters. Savvy twenty-somethings are now investing in property outside of the M25 whilst remaining at home with mum and dad. This gives them an affordable way of buying property with a view to selling it later for a deposit large enough to enable them to buy their own place in the heart of the capital.
To add extra income to their existing pension
With the new pension freedoms afforded to those over 55, buy-to-let has become a viable option for those who wish to supplement their existing pensions. However, there is a snag for some, and that is their ability to obtain sufficient buy-to-let mortgages once they reach a certain age. That being said, a recent report stated that building societies may be looking to change their policies with regard to older borrowers obtaining finance for property purchases.
So, there you have it, a multitude of reasons to take the same route. While the ultimate goal may be all about making a little extra, the driving factors that make buy-to-let investing so attractive to so many really can vary dramatically.
If you enjoyed this article and are interested in investing in property, you might also enjoy Can You Really Make Money with Buy-To-Let Investments and Will the Buy-To-Let Market Still be Successful in 2016?