Different Mindset of various buy to let investors

Posted under Advice by Michael

Property investors, who are looking to enter the buy to let market, need to have a proper purchasing strategy, particularly in the types of property they choose to buy. At the core of any buying decision is the quantum of returns the property investor is expecting. In case of buy-to-let investors this means rental returns, or the margins they will make from the rents (over & above their mortgage payment they make), boosting their cash flow.

There is a large section of investors that tends to buy cheaper (often ex-council properties), and are generally new property investors. On the other hand, more experienced, often also richer from an aggressive income building strategy, target properties that have a strong capital growth potential.

Their strategy would generally be to buy better quality properties (typically period conversion flats in London) that over a period of time will go up at much higher rates than those of the ex-council properties. There is a downside to this since these have become expensive to finance, meaning that several investors need to supplement the rent that they get from their monthly incomes for covering the mortgage payments.

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