10 Ways To Get Most Out Of Your Property Investment
Investing in property can be a fantastic way to capitalise on your on your savings. With the right advice, this can be a very lucrative way to realise a greater return than more traditional investments.
To maximise your investment, we have 10 tips to help you.
Decide whether you want a buy-to-let investment or a property that you will sell
There are two ways of investing from the property market, either by getting a rental return higher than your mortgage costs or by benefiting from the future resale value, either by an increase in the value of the property due to market conditions, or buying a property which is more run-down and revamping it.
Get your finances in order
Getting the right information early on is absolutely key. You’ll need to speak to a specialist wealth manager or broker. Our partners, SPF Private Clients are perfectly placed to ensure that you are able to maximise your capital outlay, and will help you ensure you get the largest return on investment. If you have a pot of money to invest, it may be a better return to invest in more than one property, rather than putting all your eggs in one basket. Either way, the right advice will ensure that you’re making the right decision and that you’re capitalising from the best mortgage rates.
Get a good solicitor
Purchasing a property for investments purposes can be tricky – you want to ensure that your contract is watertight and that there is nothing unforeseen that could come up and cost you money further down the line. Having a good, experienced solicitor on your side will make all the difference. Our partners at Elite Conveyancing will be able to help get you a good solicitor.
Know your tax obligations
There are certain obligations you will be liable for when making an investment. If you are buying a property as an investment, and you already own a property, you will be liable to pay additional stamp duty. If you purchase a buy-to-let property, you will be getting a monthly income on the property, and it will be your responsibility to ensure that you are paying the requisite tax on the property. If you purchase in order to re-sell, you’re likely to be liable for Capital Gains Tax. It is essential that you get the correct information and good advice to ensure your tax obligations are met. We will be able to help you get a good Financial Adviser to protect your interest.
Know your legal obligations
If you’re investing in a property to let, there are a number of legal obligations you need to observe, such as having an up-to-date gas safety certificate, having an up to date electrical check, and putting your tenants’ deposit in a deposit management scheme.
If you’re purchasing in order to develop a property, again, there are obligations you need to meet: if you’re moving walls or installing new doors, you will need to ensure that you have the necessary building control sign-off; if you are extending a property you will need to make sure that you have the requisite planning permission. If you don’t do this, the property could be very hard to sell further down the line.
Know the risks
Whilst purchasing as an investment can be very lucrative, as with any investment it’s not without its risks. If you are buying to let, it’s essential you avoid periods where the property is vacant, as you won’t be making any return on your investment. Bear in mind also that the property could decrease in value over the time that you own it – it’s not guaranteed to go up! Be sure to do your homework and have confidence in your decision.
Know your market
If you’re buying to do work to the property, ensure that you don’t over-invest. Putting a £25,000 kitchen into a property might be to your taste, but it’s unlikely you’ll see a return on that level of investment. Likewise, if you’re buying a property to let, ensure that it will appeal to the tenants typical of the area. You want your property to appeal to broadest possible market, so whether you’re selling it or letting it – make sure you don’t have anything too wild!
Be open minded
When you first start looking at investing in property, it may be that you decide on a certain approach and follow this path. But, as we all know, things can change and as new information comes to light be sure to keep reassessing your decision to make sure you’re making the best investment, and if a property comes up that is a good investment be sure to be agile enough to recognise the potential.
Consider buying off-plan
Purchasing a property off-plan, or before the property is built, can be a very smart way of investing your money. Off-plan properties are sometimes priced more attractively to incentivise investors. There is also the potential of re-selling the property before it has completed, meaning that you don’t have to pay the full completion amount, just the deposit (usually 10%), which makes this a good option if you have a smaller amount to invest.
Don’t get too attached!
You are purchasing a property as an investment vehicle, it isn’t for you to live in. Remember, you don’t have to love the property – if it makes the most sense financially – go for it!
Whether you want to know more about investing or ready to make your first move, feel free to contact our Land, New Homes, & Investment department at 020 8099 1111.