Buy To Let.pros & cons please.?

Pros:

Easy to understand

Easy to get hold of a buy to let mortgage as long as your deposit is around 20%

Offers good income potential.

Potential for capital appreciation, where the house may be worth more at the end of the mortgage than the start.

There is the opportunity to “gear up”. This means your gains are based not just on your actual investment but on the amount you have borrowed. Put crudely, if the property cost £100,000, of which £20,000 is your deposit, and it rises 10% in value, your gain is £10,000, equal to 50% of the original outlay. Of course, there are legal fees and costs to take into account, but you get the picture

If house prices are static or even start to fall, less people are keen on buying their own home. They are more willing to rent – which in turn keeps rental yields high

Cons:

Entry costs can be high, between 5% and 10% of a property’s actual purchase, once you factor in stamp duty, solicitors’ expenses, doing the place up and conforming to all legal requirements

You may well face problem tenants, which can be a nightmare if they fail to pay the rent or cause damage to the property. You have to factor in about 5% of annual rent for repairs and maintenance. This is tax-deductible

You will almost certainly have “void” periods. Most experienced landlords assume about four weeks a year, which cuts your rent by 7% or thereabouts. This is one reason why many landlords own several properties, spreading the risk across several buy-to-let homes

Looking after a property can be a full-time job, especially if you have demanding tenants. If you ask a letting agent to manage it on your behalf, including finding and vetting tenants, collecting rents and arranging maintenance on your behalf, it will cost between 15% and 20% of your rent each month. This too is tax-deductible

If you decide to sell, you will face “exit” costs of up to 3%, including solicitors’ fees and agents’ charges

There is the issue of box income tax plus capital gains tax to pay on any profits accruing on the sale of the property. This can be quite costly

Buy-to-let investments and advice are not regulated by the Financial Services Authority, the City watchdog. What this means in practice is that if a dodgy salesman gives you the wrong advice on an ISA, you can complain to the Financial Ombudsman Service and get redress. If a dodgy estate agent tells you a property makes an ideal buy-to-let and six month’s later you haven’t got a tenant, there is no redress

Gearing can work against you: if prices fall by more than 15% and interest rates rise, as they did in the 1990s, you may end up with a mortgage larger than the value of your property. Meanwhile, you will probably not be able to increase your rent to take account of rising interest rates

Finally, while bricks and mortar are a safe investment, in the sense that over the long term prices do outstrip inflation, it is not always the case in the short-term. Prices fell dramatically between 1988 and 1994 and again in the mid-1970s

I presume you meant to say Rent-to-Own or Let-to-Buy. But then you don't mention if your query pertains to real estate or to personal property, like furniture and TVs, etc. So here are some articles that may be of help:

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