Rental a good investment Tuesday, 31st March 2009

The reduction in the Bank of England's Base Rate is lilely to benefit the private rented sector as cash rich investors look for alternatives to poor returning savings accounts.
Residential investment property could potentially offer significantly better returns,with millions of savers on savings rates of less than 1%. But investors need to be careful about choosing the right property.

There are opportunities for cash rich individuals to generate better returns in the current environment through residential investment property. Savings returns are poor because of the reduction in Bank of England Base Rate and equities remain unpredictable and erratic.

Tenant demand is strong. Even though the outlook for house prices in the short-term is still uncertain, yields are strengthening and property investors are able to pick up bargains. Experienced buy-to-let investors already appear to be taking advantage of low property prices and are adding to their portfolios, but we may see investors that have never considered property before purchasing rental investments.

But there is a the need for potential investors to thoroughly research their prospective market and to only buy property with proven sustainable rental demand. A good quality property that will let through economic cycles will always represent an attractive investment proposition.