What is the downside of buying and letting a property – what is the most I can lose if things go wrong?
If you invest in bricks and mortar, unlike stocks and shares, it is unlikely that you can lose all your money – in fact there is a good chance you will make a considerable capital gain over time. This is providing of course that you buy a property free from structural defects, that other factors affecting property values remain positive and that you keep the property properly insured. You also need to do your research and ensure that you buy in a location where there is steady demand for renting. By far the biggest risks come from poor management. Letting hiccups can lead to cash flow problems if the rent isn’t paid on time or the property is damaged. You can be held responsible if you do not comply with the law, particularly on safety issues or tenant harassment, which carry heavy penalties – see Landlord’s Obligations. You are also vulnerable if you don’t carry adequate insurance to cover letting and public liability risks – it is surprising what claims are now being brought particul
