HOW TO JOIN THE BUY-TO-LET BOOM

Is it time for YOU to take the plunge?

IF YOU’VE ever thought about your finances, you will have wondered whether you should become one of the thousands of buy-to-let landlords who make money from property. Starting today and all this week, we’ll guide you through the buy-to-let process in a series of incisive pullouts so you can make up your own mind — and possibly secure your family’s financial future.

BRITAIN is in the grip of a buy-to-let boom. In the past five years, the number of homes bought by landlords to rent out as i nvestments has more than doubled. One i s being snapped up every five minutes.

It is estimated there are two million landlords who own nearly one home in five. Of those, 1.6 million are funded by buy-to-let mortgages, totalling £188 billion of loans, according to the Council of Mortgage Lenders.

Investors have always been drawn to the property market, which is not surprising given that the value of their own homes has soared by more than 210 per cent over two decades.

Buy-to-let has particularly flourished as savings rates on the High Street have plummeted and payouts on pensions have fallen by a third.

Meanwhile, thousands of lucrative finalsalary pension schemes have closed, leaving workers wondering how they will fund their retirement.

And a series of investment scandals, such as endowment and pension misselling, have left investors disillusioned with banks and insurance companies.

In this context it seems inevitable that families should look to property to bolster their incomes, particularly as mortgage rates have fallen to record lows. Many have become second-home owners almost by accident.

Some i nherited homes when their parents died, which they have decided to keep on as a safe investment, and others ended up with two homes when they settled down with a partner who also had their own property, deciding to live in one and rent out the other.

Meanwhile, lots of people are snapping up second homes as holiday rentals or to help when a child goes to university.

Certainly, the rewards in the long term are t empting. A r ecent r eport by economists showed that buy- to- l et landlords have enjoyed incredible returns of nearly 1,400 per cent since 1996, beating all other investments.

If you put £1,000 into a rental property at the end of John Major’s government, it would have grown to £14,897 by last year, according to the research.

In terms of profit, it is six times what shares would have earned and more than 14 times the return from leaving the money in a cash account.

But becoming a landlord isn’t risk-free and could even end up costing you money if your property remains empty for long periods. You’ll also need a fair bit of capital up front — at least a quarter of the property price — before you can get going.

On top of this, when you put your money into most investments, you can generally sit back and let the professionals manage your cash for you. All you need to do is check on it once in a while.

But buy-to-let is a business and can be hard work — enormously so at times. There is not only the property to look after, but agents and tenants to manage — and tenants can be time-consuming.

You need to be a good business person, but also a fair and pragmatic landlord. You will be dealing with other human beings, after all.

Get buy-to-let right, though, and it can provide you with a healthy income as well as bolstering your nest egg if the value of your property rockets.

All this week the Mail is going to show you how to become a buy-to-let investor. Today, we will look at taking your first steps on the landlord ladder and how to find the best mortgage for your needs.

Then, day by day, we will look at all the other ways you can become a successful buy-to-let owner. We will tell the stories of those who have taken the plunge and pass on their advice, the top tips of property experts and how to transform a house or flat into the perfect buy-to-let property.

This year, major changes were made to how we can take our pensions. Essentially, they allow many people to take large lump sums instead of turning the money into an income for life using an annuity. With this in mind, we’ll analyse whether you can rely on property for your pension.

Finally, we’ll look at how to buy a second home abroad, or in the UK, which you and your family can enjoy while making a healthy income from shorter-term lets.

But first, a word of warning: it’s critical you do as much homework as you can before taking the plunge. There may be a buy-to-let boom, but be sure you don’t take too big a risk and lose your savings.