Property may be a wonderful investment. For a section of people, it is a full-time occupation. For others, it is a side-earner to assist save for their retirement. And often, many who were initially accidental property owners are seeking to expand their property portfolio by purchasing a second property. Whichever part you fall into, the main principles of How To Buy Properties For Profit are the same. Financing Your Property Purchase.
There’s some things you have to think of when purchasing a property.
The Costs You Will Incur
- You will probably need to spend between £1,500 up to £2,500 in real estate lawyer fees and mortgage lender fees when you buy the property
- You will have to pay for Stamp Duty in case the property is more than £125,000 (tax rate ranges from 1 per cent-7 per cent of the real estate property’s value.)
- You should also put aside some money for beautifying the property, and preparing it for tenants. (The amount you will spend here varies on the property size and the proportion of work which requires doing)
- You will also need to spend a hundred pounds on satisfying legal obligations. In a nutshell:
- You have to have a Gas Safe certified engineer and a registered electrician round to ensure that all fixed appliances and installations are Energy Performance Certificatied before moving into the property
Will I Get a buy-to-let Mortgage?
- Conditions vary from REAL ESTATE provider to provider. To be accepted:
- You will require the rent to be 125per cent of the repayments
You would be requiring to borrow less than than 60 per cent -75 per cent of the real estate property’s value
And you will require to have a deposit of 25%
It is a great idea to see a buy-to-let REAL ESTATE mortgage broker. It doesn’t lock you into anything, however discussing it with them will provide you some really great ideas into what you may realistically afford.
Finding The Correct Mortgage
- You will need a mortgage. Actually, a buy-to-let mortgage. They are close to standard REAL ESTATE owner-occupier mortgages (and may also have a tracker or fixed rate) however they have 3 main differences:
- Your mortgage provider will take projected rental income into consideration, and any other revenue. This will assist know how much they are prepared to lend
- They happen to be more costly, since they are of a much bigger risk. This means you will have to place a bigger deposit too, and pay higher arrangement costs as well
- They are often lent based on an interest-only assumption that is your repayments will only cover the loan’s interest (Advantage: manageable repayments. Disadvantage: you require to save to pay for the loan in case you seek to ultimately own it and getting the advantages of the property’s capital growth)