Buy to let traditionally involves investing in property with the expectation of capital growth with the rental income from tenants covering the mortgage costs and any outgoings.
At Parfitt Cresswell we can help you sort out some of the potential problems that may arise and structure the investment appropriately.
To discuss your property transaction & obtain an estimate of costs please click the link below to get in touch today
Get in touchWhat to Consider When Buying to Let
In recent years the stock market has had its ups and downs. Add to this the serious loss of public confidence in pension funds as a means of saving for the future and it is not surprising that investors have looked elsewhere.
The UK property market, whilst cyclical, has proved over the long-term to be a very successful investment. This has resulted in a massive expansion in the buy to let sector.
The gross return from buy to let properties - i.e. the rent received less costs such as letting fees, maintenance, service charges and insurance - is no longer as attractive as it once was. Investors need to take a view on the likelihood of capital appreciation exceeding inflation.
Factors to consider:
Do
- think of your investment as medium to long-term
- research the local market
- your sums carefully
- consider decorating to a high standard to attract tenants quickly
Don't
- purchase anything with serious maintenance problems
- think that friends and relatives can look after the letting for you - you're probably better off with a full management service
- cut corners with tenancy agreements and other legal documentation.
Which property?
Investing in a buy to let property is not the same as buying your own home.
You may wish to get an agent to advise you of the local market for rented property. Is there a demand for say, two-bedroom flats or four-bedroom houses or properties close to schools or transport links?
An agent will also be able to advise you of the standard of decoration and furnishings which are expected to get a quick let.
Agents
Letting property can be very time consuming and inconvenient.
Tenants will expect a quick solution if the central heating breaks down over the bank holiday weekend! Also do you want to advertise the property yourself and show around prospective tenants? An agent will be able to deal with all of this for you.
Tenancy agreements
This important document will ensure that the legal position is clear.
Taxation
When buying to let, taxation aspects must be considered.
Tax on rental income
Income tax will be payable on the rents received after deducting allowable expenses. Capital Gains Tax will also be payable upon the sale of the property. You should consider the tax implications carefully and take advice from an accountant.
How we can help
Whilst some generalisations can be made about buy to let properties it is always necessary to tailor any advice to your personal situation. Any plan must take into account your circumstances and aspirations.
Whilst a successful buy to let cannot be guaranteed, professional advice can help to sort out some of the potential problems and structure the investment correctly.
Take advantage of our complimentary initial consultation with one of our property law experts by calling us today on 0800 999 4437 or click on the 'Get in touch' button above.
