Buy-to-let property used to be a surefire way to build a sizeable financial nest egg. Unfortunately, tax and regulatory changes over the past few years means this is no longer the case. As a result, I think buying a basket of cheap UK shares could produce better returns in the long run.
Today, I’m going to highlight the three reasons why I believe this is the case.
There are two ways investors can profit from buy-to-let property. Rental income and capital gains. Many investors rely on rental income to cover mortgage payments and costs, such as decorating and emergency repairs. The income covers the day-to-day expenses, and the real profit comes from capital gains.
However, over the past few years, rental yields have dropped significantly. The average rental yield in the UK is now around 3.5%, although it’s possible to achieve higher returns. At the same time, the