Please Note: This Article is 3 years old. This increases the likelihood that some or all of it's content is now outdated.

A growing number of people are investing in rental properties.

Is it a good investment? How does it compare with putting the money on the stock market?

Buy-to-let landlords have done well over the last fifteen years or so. Will this continue? What are the risks?

This article (split over 25 pages) teases out these and other questions and explores how best to appraise the benefits and risks of an investment in residential lettings.

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It explains the technicalities of financial modelling in plain English.

 

1.) Investing in buy-to-let

2.) Financial appraisal of buy-to-let

3.) Cash Flow

4.) Yield

5.) Discounted Cash Flow

6.) Net Present Value

7.) Internal Rate of Return

8.) Over how many years should viability be assessed?

9.) Capital Growth

10.) Operating Costs

11.) Maintenance Costs

12.) Major Repairs and Improvements

13.) Management Costs

14.) Void Losses

15.) Inflation

16.) Inflation in Rents

17.) Inflation in Management and Maintenance

18.) Inflation in House Prices

19.) Monitoring the Performance of your Investment

20.) How Things Might Change

21.) Rent Control

22.) Build for Rent

23.) Changes to Capital and Income Taxes

24.) Accreditation

25.) Housing Benefit

 

Letcheck Appraisal Tool Download

Letcheck is a simpler version of the financial appraisals tool used by social housing providers, designed to suit the needs of a buy-to-let landlord. It can be downloaded free and used to appraise your own investments, and to explore the examples used in this paper in more depth.

Click here to download the Letcheck Buy to Let appraisal tool.

 

About the Author

Dave Treanor - Author
Dave Treanor recently retired as managing director of M3 Housing and secretary of the National Housing Maintenance Forum.
He wrote Housing Investment Appraisal for the National Housing Federation, and developed financial appraisal systems widely used by housing associations.
Prior to that he spent many years working with housing cooperatives.
Please Note: This Article is 3 years old. This increases the likelihood that some or all of it's content is now outdated.