When it comes to selling properties, both the buyers and the sellers know that location is very important. Unfortunately, properties located under very busy flight paths can present some unique problems due to unwanted noise. However, the three tips listed below can help your potential buyers overlook the noise and instead focus on the silver lining.
Buy To Let
Investing in buy to let property became popular in the 1990’s due to the introduction of Buy to Let mortgages.
In the current climate it has become difficult for a first time buyer to get a mortgage to get on the first rung of the property ladder. Therefore renting has become increasingly popular. Needless to say this is very good news for the property investor. You can create a great monthly cash flow if you do your sums correctly at the beginning.
So what does Buy to Let investing mean?
The basic idea is that you buy a property, using some capital of your own and some borrowed money (the mortgage). You then find some tenants to rent the property to. They pay you rent to live in the property. Hopefully the tenants cover all of your costs of owning the property and give you some positive cash flow. In addition to this cash flow, you get the benefit of significant capital growth as the property increases in value overtime.
The key to successful buy to let investing is to purchase a property in a location where there is strong rental demand and the rent “Stacks up”. This means that the rent is enough to cover all of the costs and still leave a profit for you at the end of each month. Each year you will have to pay income tax on your rental profit.
The main costs you have to cover will include:
- Interest on your mortgage (always get an interest only mortgage)
- Landlord insurance (make sure you get Landlords Insurance and not just a household policy)
- Management fees (if you use a letting agent to look after your property for you)
- Service charges (if you have a leasehold property)
Make sure you know how to work out the rental yield on a property. The calculations are shown below:
Gross Yield = annual rent/purchase price
Net Yield = annual rent less running costs/purchase price
We find it much safer to work with the net yield, as this gives you a truer picture as to what will end up in your pocket at the end of the month.You should also build in some contingency to your figures in case of a worst case scenario happening.
Is it more advantageous to let an investment property in a furnished or an unfurnished state? Answering correctly is essential in terms of achieving the highest rental yields, appealing to your desired market sector and ensuring your property is let on a continual basis. While it is not possible to give a single definitive answer, an analysis of the fundamental factors that must be taken into account can be provided. The overview of common considerations set out below will help you determine the best course of action.
The housing boom in London is a widely discussed topic and it continues to keep so many of us guessing as time goes on. As much as some people like to believe they have a sixth sense when it comes to buying and selling at the right time, we do all rely on many factors which are out of our hands. For first time buyers it must be a nervous time as you see the prices rise then realise that you no longer have the funds to buy your ideal home in the location you desire. For those lucky enough to have purchased a London property from the early 90’s to the mid 00’s, you will be amazed as to how much money you have earned from your investment. Thanks to http://www.freehold-sale.co.uk/ for the article