- Location, Location, Location
Okay, so some areas may be cheaper to purchase property, but they generally show less growth in property prices and therefore less equity within the property. Popular, sought after, areas will help to protect your long-term investment.
2. Forgotten Fees
There are so many forgotten costs involved with the purchase of a property. Not only do you need to budget for the purchase price of the property, you need to set aside enough for solicitors fees, searches, Stamp Duty Land Tax and surveys. You also need to budget for any work required in the property; painting and decorating? New bathroom? New carpets? It all adds up!
Don’t forget you are also responsible for the utility bills until the property is rented and, if you have purchased the property with a mortgage, you need to be sure you have set aside enough to pay the mortgage during the time the property is empty.
3. Property Personalities
Have you thought about the type of property you would like to invest in? Leasehold or Freehold? 2 bedrooms or 4 bedrooms? Terraced or detached? New build? Cottage? All of these factors will not only affect the price you pay but also the rent you are likely to achieve. Some areas are flooded with available 2 bedroom houses but families are desperately seeking 4 bed properties, whilst other areas are crying out for 1 bedroom apartments. It’s important to do your research before you commit.
4. Taxing Tax
A good accountant can help you run your business in the most tax-efficient way. If you’re purchasing / thinking of purchasing more than one property, it might be worth considering the differences in purchasing in your own name versus in a limited company, for example. There are also many expenses you can claim tax relief on (and some you can’t!), so speaking to an accountant is a definite must for us “property professionals”.
5. Legal Liabilities
Once you purchase an investment property there are legal requirements you need to adhere to in order to legally rent your property, including; EICR, Gas Safety Certificate and Legionnaires Risk Assessment. Without these in place, you could face hefty fines and even imprisonment.
6. Insurance Intelligence
I may be trying to teach you to suck eggs here, but please make sure you read the small print on your insurance policy to ensure you are covered. Specific Landlord Insurance is recommended.
7. Mortgage Mission
If you are buying with a mortgage it is advisable to speak to a mortgage advisor as soon as you decide to start looking for the right property to buy. A mortgage advisor will be able to explain the different options available to you and compare the best interest rates, to find you the best deal.
8. Maintenance Management
Set up a separate bank account for your rental income to be paid into. It is strongly advised that you save some each month, so you have some set aside for maintenance (and tax too, don’t forget!). Or you can ask your Letting Agent to hold some money back and build up a “property account” for the Letting Agent to use for maintenance without having to ask you to transfer the money, or take a full months rent in one go, leaving you with no, or very little, income one month.
9. Ticking Time
The chances are, if you’re considering investing in property you probably understand how precious your time is. You may be working long hours, have a young family, a demanding career or even the demands of grandchildren. Maybe you’ve recently retired and wanting to go travelling. You’re unlikely to have the time to self-manage your rental property / properties, so consider using a Letting Agent to ease the burden and free up your time.
10. Acting Agent
Okay, so maybe I’m biased here, but I would strongly recommend using a Letting Agent to manage your rental property / properties. It is such a small fee to pay for the advice, support and expertise you will receive.
Need advice?
Please don’t hesitate to contact Gemma from Flying Keys;
E-mail; gemma@flying-keys.co.uk
Telephone; 01400 671 175 / 07737961711
