Pros and Cons of buy-to-let mortgages

A buy-to-let mortgage is an investment and, if budgeted correctly, can provide an excellent Return On Investment (ROI). Like all investments, buy-to-let is risky. That risk can be huge and result in you losing the property and incurring huge debt if things go wrong. In this buy-to-let mortgage guide we look at the pros and cons associated with buy-to-let investments.

Buy-to-let - The Pros

  • A buy-to-let mortgage could be the first step towards a broad property portfolio that allows you retire in comfort
  • Investing in property can provide a very high return on investment (ROI) if the markets are right
  • If you invest wisely, you can make monthly profits in addition to increasing your assets via equity in the property

Buy-to-let - The Cons

  • There is no consumer protection for your investment, the risk is all yours!
  • If you cannot find tenants you will still have to cover the monthly mortgage repayments
  • If you get troublesome tenants who refuse to pay, you will still have to cover the monthly mortgage repayments.
  • When you rent a property, you become a landlord. This means additional legal commitments.
  • Your money is tide up for a long time. If you need to access your investment, it will mean selling the property. This in itself can be difficult, particularly if you have existing rental contracts in place, a challenge which can be amplified if the tenants refuse to move.
  • Property investment, unlike other investment options will require you to invest your time and effort to make the investment work. This includes additional tax considerations, property maintenance, dealing with tenant issues and legislation, don't think letting a property is easy money.
  • You may not make a profit on your investment, do not base your investment on a guaranteed higher property price in years to come. The UK government is driving policies to ease the property demand. Should they succeed, reduced demand will mean lower prices with less fluctuation.
  • Property prices can go down. If this happens along with challenges in finding tenants, it can create a situation where you have negative equity at a point when you are forced to sell the property, this is the biggest risk you face, take it seriously and have a plan for that possibility.
  • If you are forced to sell due to a change in your financial circumstances and the sale price doesn't cover the cost of the mortgage, you will have to make up the difference.
  • Maintenance and unexpected repairs can prove to be very expensive, consider damage to roofs, damp, flooding etc.
  • Poor tenants can mean increased costs, if they damage the property or any included white goods, fitted kitchen or bathrooms etc. you will need to replace these or return them to a suitable condition to secure your next tenants.


Investing in property can be risky, whilst the returns can be significant the losses can be just as pivotal on your finances. Do not take that risk if you have any doubt that you cannot afford to repay the buy-to-let monthly repayments should the rental property be empty for an extended period.

Next: Buy-to-let Profit Calculator

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