tolet-300x225If you are looking for a good investment alternative that is long term and is bound to give you returns spread out over the years, a buy to let is a good idea. Given the way the industry swings and the seeming instability of the real estate market, you may think that it is not a good option. Most real estate related purchasing is done to with the long term in mind, and in the long term market instabilities seem to iron themselves out. Here are two signs to look out for that confirm whether or not a buy to let will be profitable for you.

Value appreciation

The value of your property has to increase over time. If your property rises in value by around 20% to 30%, it is a good sign. The returns must be enough to cover the loan on the house while also leaving you with a good amount of money. That is the kind of appreciation which you should look for as it is much safer.

Taxes

Property taxes are not the same all over the country. In fact, depending on where you live, taxes can differ between localities in the same state. If the taxes are low, it is not always a good thing and vice versa. You just have to know how much tax you will be paying and how that will affect your income from the buy to let. If the taxes are high, it usually means the neighborhood is a good one, so you can expect long term tenants and almost constant occupancy.

Both of the above mentioned points deal with cash flow, one in the long term and the other in the short. If both of them are positive, then you can be sure that they will comfortably reap you income for as long as you hold your buy to let.

Image courtesy of [Stuart Miles] at FreeDigitalPhotos.net