Buy-to-let (BTL) is when you purchase a property specifically to rent it out to tenants, rather than to live in it yourself. The owner becomes a landlord, and the rent paid by tenants is used to cover running costs, mortgage payments, and ideally generate profit.
How Buy-to-Let Works
- You buy a property (house, flat, or even a small block of flats).
- You let it out to tenants, either directly or via a letting agent.
- You collect rent, which is typically paid monthly.
- You cover costs such as the mortgage, repairs, and insurance.
Example:
A landlord buys a two-bedroom flat for £180,000. They rent it for £950 a month. After paying the mortgage and expenses, they keep the remaining amount as profit.
