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12 Essential Tips for Potential Investors |
- Learn The Trade
"Some
people are so busy learning the tricks of the trade that they never
learn the trade”
(Vernon Law).
Elvis did not rise to fame by singing a few songs in the bath but
rather through talent, hard work, perseverance and good luck. Your
success will depend on all these factors to varying degrees however
it is important that you recognize that there is no simple way to
become successful in any sphere without hard work dedication and
commitment. If you can accept this from the outset and are able
to commit yourself to hard work and long hours then read on.
- Know Your Market : You must
make sure that you are buying the right property in the right location.
Research your market in detail prior to buying. Talk to as many
people as possible who can give you information or advise on both
the area and the market you are considering. Wherever possible you
should have a first hand knowledge of the area you are investing
in. Berisfords are happy to discuss any particular property or location
with you at any stage of the buying or marketing process.
- Consider Your costs : When
you do your sums make sure you include all costs associated with
renting a property. Hidden costs are mainly maintenance,
insurance, management charges and any costs associated with periods
when your property is empty. As a landlord you are responsible for
the insurance and upkeep of the building and it is critical that
these costs are factored into any decision you make in property
investment. Berisfords are well aware of the full costs associated
with property investing. We keep your outlays to a minimum to maximise
your return. Additionally since we concentrate on longer lets your
expensive void periods are minimised.
- Think About Financing : You
will probably require to raise a loan to purchase the property.
Ensure that any deposit you have is at least 15% of the total value
of the property. We generally advise clients to have at least 25%
equity in their property as this will be more attractive to lenders
and leave them less exposed to low rental returns. Remember to include
costs for solicitors fees, stamp duty, Registration fees and other
disbursements. Also remember that in Scotland you will generally
have to pay more than the value of any property to secure it and
that any amount paid over the value of the house will not be included
in an offer of loan.
- Have A Contingency Fund : As
well as ensuring you have adequate capital to finance the purchase
it is critical that you also have adequate financial resources to
cover any unforeseen circumstances such as voids, repairs etc. Financial
emergencies are particularly common in buying period property -
make sure that you have an emergency fund available.
- Choose a Good Letting Agent:
You can opt to manage the property yourself but for a fee of up
to 15% of the gross income a letting agent will take care of the
managing and running of you property.
- Ensure the Correct Insurances are
in Place :
- Comply with all Relevant Legislation
: there are several important pieces of legislation which all landlords
must comply with. These are dealt with in detail on other pages
in this website.
- Inform the Taxman : Once
you own buy to let property the inland revenue require you to return
a self assessment tax return on an annual basis. You can choose
to complete these returns yourself or instruct an accountant to
prepare them on your behalf. If you choose the latter remember to
factor the fees involved into your cost calculations.
- Ensure the Correct Documentation
is in Place:
- Get a Deposit :
- Present Your Property to a High
Standard :
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