Property investors should plan for a positive cashflow in their rental income or  face repossession of their BTL properties...

Property website www.publicangel.com says recent increases in interest rates and further possible hikes could push some landlords over into the red with their mortgage payments.

In the race to increase portfolios, some landlords are subsidising the rents received with their own money to meet the increasing mortgage payments.

This method of property investment promoted by some “property gurus” will lead to financial ruin for many newbie investors.

Wrong to rely on capital gains

Public Angel’s Nilesh Gohil said: “It angers me to listen to so called property gurus preaching to new investors that being out of pocket every month is a good solution to cashing in on long term capital gains in the future.

“Every savvy property investor should know that, in general, property investors should plan for a positive cash flow and not rely on capital gains. Any capital gains achieved should be considered as a bonus.”

Nilesh added: “Poor cash flow management by new investors will increase the number of properties going into repossession. Great news for savvy property investors.

“I urge investors to get the right financial advice and ensure the figures stack up. I always run my figures past my mortgage advisor and accountant to ensure I am making the right choice in my property investment”.

Source: Press Release - PRlog