How to stress test a potential new buy-to-let investment for free?

The financial phrase of the moment is 'stress testing'. This refers to the process whereby the bank's balance sheets are subject to various dire predictions about the performance of the economies and their loan books.

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Landlords looking at making additional investments should do their own 'stress test' on any future investments. They can do this using Property Hawks own development appraiser which will calculate a landlords likely long-term returns. This should be done using a variety of different investment scenarios including a set of pessimistic figures which are 20% below what a landlord would expect.

I would advise all landlords to 'stress test' their proposed investments before committing their valuable capital to a new buy-to-let property. In this current uncertain market with capital values continuing to fall I would also be looking at an investment return of 20%+. Thoroughly 'stress testing' your investment could avoid a landlord making a rash investment decision that they end up living to regret.


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