Finding a property
It is important not to forget that if you opt for a direct property investment, you will have to do your homework before committing to one project. Looking at different areas, types of property (i.e. student accommodation or commercial real estate) and the best opportunities available is essential. You should be prepared to do a lot of research and be patient while waiting for the right opportunity to come up – then when it does, you could earn yourself a tidy profit.
Whether you’re looking for a buy to let or a property development, there are several things you need to ask yourself first:
Do you want the property to be near where you live?
Do you want to manage the property yourself or leave this to a management company or estate agent?
Do you want a property that you may want to live in years to come?
Are you looking for a short-term development and investment, or something to hold on to for many years?
Once you’ve made these decisions – and any other queries you might have – you will be in a better position to begin looking for the ideal property investment opportunity for you.
Property investment finances
Of course, before you can make any final decision on buying a property, you ought to consider your finances. First, you need to have enough money for a substantial deposit – or the entire value of the property if you don’t want to take out a mortgage.
Then, you have other costs to account for, which include:
- Stamp duty
- Solicitors’ fees
- Income tax – for buy to let properties
- Capital gains tax - if you make a profit on the sale of your property
- Management fees
- Maintenance costs
- Monthly mortgage repayments – if you’re taking out a properly loan
The most important thing to consider is whether the costs you will incur as a property investor will be exceeded by the profits you will gain with your real estate initiative. If you work out your finances and discover you can earn a substantial amount if the market is going well and can risk any potential losses when it is not, this could be the ideal investment opportunity for you.