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| Historically low interest
rates, special buy-to-let mortgage schemes and strong property prices
have attracted many thousands of people to become amateur landlords.
So if you are contemplating investing in bricks and mortar this
year, what are some of the things you need to consider? It’s
really important to do your homework and have a clear plan of what
it is you want to achieve. |
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Income
or capital growth
Before you consider investing in property,
you should decide whether your aim is to generate regular
income, capital growth or both. Be prepared to tie up capital
for a considerable period and be aware of the tax implications
of buying and selling a second property. Profits are taxable
and an eventual sale may incur a future capital gains tax
liability.
What next?
Who will manage your property? Many
landlords choose a managing agent to look after their property.
You will also need to take legal advice to draw up a renewable
assured shorthold tenancy agreement for a minimum initial
period of six months.
Knowing your local market is essential to success, and this
is where it can be very costly if you get it wrong. Location
is crucial, as is access to parking and transport services.
And then there is the funding! Mortgage terms vary widely,
many providers stipulating a rental income of at least 125%
of mortgage costs. Do your sums before you start.
YOUR HOME IS AT RISK IF YOU DO NOT
KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOANS SECURED
ON IT. Written quotations available on request, loans subject
to status. Insurance may be required.
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