Don’t follow the UK buy-to-let herd out of fear – look abroad for better deals

We are all familiar with the old business adage ‘buy low, sell high’, but most of us don’t apply it to property investments.

Latif Sayani, Mortgage Strategy columnist and managing director of Fuel Investments, often extols the virtues of UK buy-to-let, but I’m always left with a sense of bewilderment by his simplistic argument, which boils down to ‘buy-to-let is a good investment and house prices always go up’.

Let’s think this through for a second. Imagine an investment that’s a one-way bet and only goes up in value – it sounds too good to be true. So why isn’t every merchant bank in London buying up every house in the capital?

I did my time investing in UK buy-to-let but on the whole I now try to find better markets. Buy low, sell high still applies, which is why I now invest in Berlin. It’s about 80% cheaper than London and my latest block of flats yields a whopping 28%, even with several empty units. And how much did I pay for it? About £90,000.

Following the UK buy-to-let herd cannot be the way – life isn’t that simple. Everyone I know is a landlord here and when a market gets that saturated it’s time to leave.

Forget claims of a risky and unregulated Eastern Europe – apart from Estonia, Slovenia and Poland. Germany is a safe, cheap place to buy. No wonder every London fund for German real estate released recently has been heavily oversubscribed. Don’t let the fear of the unknown put you off.

R Butler
AMS Mortgage Finders
By email