- Personal Finance
A Buy to Let Remortgage: What to do With The Proceeds
A Buy to Let Remortgage
There are a number of reasons that people will seek a remortgage but it is important to remember that the reasons that a homeowner would seek a remortgage and the reasons that a landlord would seek a buy to let remortgage are usually different. A landlord has a different set of concerns and will have different reasons for remortgaging his property. It is usually not a good idea for a homeowner to use the equity in their home for other investments but it often is a good idea for a landlord.
Generally speaking real estate is an excellent investment but there are risks involved. Any financial advisor would tell you that you should have a diversified portfolio in order to minimize risk. Property prices are just as capable of going down as they are of going up and that means that it is really not a good idea to have all of your eggs in one basket. This is easier said than done though because of the cost of real estate. Most people who purchase a rental property find that they usually don’t have any money left over to invest in other things. A buy to let remortgage can help them by freeing up some money for other investments.
One of the problems with real estate is that it tends to be an all or nothing investment, you normally can’t buy or sell part of a house. That makes it difficult to diversify your investment portfolio. A buy to let remortgage will allow you take some of the money out of your property so that you can invest in other things. It has the additional advantage of not requiring you to sell the property so that you can continue to benefit from your investment.
A buy to let remortgage is not always the best option for doing this so you may want to talk to a financial advisor first. You should also definitely talk to an advisor to make sure that you are investing the money wisely. This is especially true when it comes to taxes, normally the proceeds of a remortgage are taxable but there are investment options that will allow you to defer the taxes. This is something that you are going to need to get expert advice on so it is a good idea to talk to an advisor before you even start the process.
A buy to let remortgage can be a n excellent way to diversify your investment portfolio. It is however important that you do your home work first. You will want to make sure that you are actually going to benefit from any remortgage deal.