This is still the most popular strategy in the U.K. Investors will simply buy a property to let it and have somebody else pay the mortgage, whilst they enjoy a profit each month. BTL (buy to let) is typically a long term exit plan as you only make a small income each month. The pay-off is many years in the future, you have benefited from your tenants paying the mortgage and giving you the income but when you sell you should have gained capital appreciation and built up your income so you release a decent sized lump sum of money. 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. You will also be subject to paying capital gains tax 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 buys to let properties. If the property is used as an HMO you will generate more net monthly profit and still benefit from the long-term capital appreciation. Another option is Serviced Accommodation ( SA). You can let out the property or room by the night (like a hotel), the person staying pays a nightly rate. If the property is run as an S.A. unit it would increase your net monthly income further, however, location and supply and demand in that area are the most important factors. What you need to consider is maintenance costs and void periods also, but if you crunch the numbers correctly you will enjoy a decent profit.
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