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.
It explains the technicalities of financial modelling in plain English.
3.) Cash Flow
9.) Capital Growth
10.) Operating Costs
11.) Maintenance Costs
13.) Management Costs
14.) Void Losses
16.) Inflation in Rents
21.) Rent Control
22.) Build for Rent
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.
About the 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.