How to Succeed with Property Investment
In fairness; all of that can be true, but thinking that becoming a landlord through buy-to-let is going to be an effortless investment leading to untold riches is a sure-fire way to failure.
Navigating a buy-to-let mortgage and then managing the difficulties of being a landlord in order to make money takes planning and effort – and no small amount of experience. Thankfully, we have the latter and are here to help you.
Here are eight tips to help you understand the pros and cons of a buy-to-let mortgage as investment.
1 - Understand the costs
2 - Calculate the tax
Stamp duty land tax
Buying a property will incur a substantial stamp duty cost that will run into thousands of pounds. It’s a one-off fee that means it is considered somewhat differently than ongoing costs by many, but it is still a significant impact on your investment.
Income tax and mortgage interest tax relief
Changes to mortgage interest tax relief that happened in 2017 means that the income tax due on rented out properties is considerably higher than it used to be, and will make a difference on your overall profit.
However, by incorporating your landlord business you can save significantly on these tax concerns. Read our guide on mortgage interest tax relief to find out more on both the changes and the ways you can make a saving.
3 – Consider the need for tenants for every month
Plan for periods without tenants and be prepared to adjust agency fees and advertising to minimise the time your property spends unoccupied.
4 – Find the right location
5 – Plan on renovation
Renovating is an investment in itself. If you have a lot to do you may need to make sure your mortgage covers the costs – speak to us at The Mortgage Hut about getting a mortgage with renovation in mind.
If you do your additional developments well you could put a large amount of additional equity into the property, not only making it worth more for a final sale, but increasing the desirability in the meantime and improving your rental options.
6 – Haggle
7 – Look to auctions
Just don’t get too far into the auction spirit and make poor bids. Know your top-end going in and don’t cross it, no matter how tempted you are.
8 – Speak to The Mortgage Hut
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