With interest rates set to rocket over the next few years, are fixed rate mortgages and rent guarantee schemes the key to keeping landlordship profitable?
Yes, after a spell of cheap deals which landlords lapped up, mortgages rates are once again on the rise so entering into a fixed rate deal before they rocket is what the savvy landlords will do but they’ll have to act quick as the cream of the 5 year fixed rate crop are almost gone.
If you have a big deposit to play with you’ll find the best 5 year deals at Chelsea Building Society, Monmouthshire Building Society and Nationwide but if you’re offering something smaller as a deposit you could go to the Post Office, Santander or Yorkshire Building Society for a long term deal.
Two year options are more readily available but you will run the risk of coming out of your deal just as the base rate starts to really spike.
As a landlord having a secure plan for the next 5 years ensure your stability while you keep an eye on the market to plan for the next five years which could mean selling up or continuing to rent.
Remember becoming a landlord is a long term investment that only works with planning and good letting which is where guaranteeing your rental income becomes essential.
Entering into a five year fixed mortgage has its up sides but you must also be able to cover that mortgage during that time if your property becomes void. By working with a rent guarantee specialist, you could enter into a contract for the same amount of time to ensure you receive rental income every month for that 5 year contract. In short you have a low, unchanging mortgage rate and guaranteed monthly rental income; a landlords ideal scenario.
Homebridge Housing are providers of Guaranteed Rental Income who also provide expert property management and don’t charge agency fees meaning that once you have secured your rental property you can hand it over to them and enjoy the benefits of being a landlord for the length of your contract.