Why buy-to-let homes are a worthy investment
http://bit.ly/LV07bH
You will need considerable funds to secure a property – a typical deposit is around 30pc, though experts hope that will fall to 25pc soon, while fees are about 1pc of the loan amount. You also need to consider tax issues and forex rates. You may buy a property in sterling but receive your income in another currency – this leaves you vulnerable to fluctuating exchange rates. If you are a cash buyer, sales can take six to eight weeks to complete – more if buying off-plan – and rates can change during this time. You should also consult an international financial adviser about the implications of drawing an income from a source in Britain. Estate agents with buy-to-let UK property packages will be able to advise, but it pays to also get independent advice. After all, for expats who move overseas to retire, a property portfolio could provide for their future. Stewart Dick, head of sales at Hornbuckle Mitchell, believes that a recently proposed move to include residential property in pensions would be of interest to many expats. "Current law bars pension savers from including residential property in their SIPPs and SSAS but if it were allowed we could expect a great deal of interest, as many view residential property as a far more accessible and understandable asset class than commercial property," he said. Savills, Knight Frank and Harrods Estates are popular estate agents for premium property but humble family homes remain in demand too. Research from property firm Paragon found that from the start of 2012, professional landlords have increased the size of their portfolio by 1.8 properties to an average of 10.8 properties. Terraced homes remain the most popular purchase, followed by flats and semi-detached homes. A good management or estate agency is essential for long-distance long-term lets. Some may be tempted to let to friends and family, but this can prove problematic. Vicki McLeod and her husband moved to Mallorca from London in 2004. She set up a PR/photography business, Phoenix Media Mallorca, and decided to retain her flat in Walthamstow in case they had second thoughts about the move. "We initially rented it out ourselves to people that we found through friends," she said. "At the end of the rental period we went to check the property and found our burglar alarm had disappeared. "Then we rented the property to members of our extended family and that went really badly – they owed rent, our mortgage payments got behind and the house was left in a mess." They are now with Spencers Property Services in Walthamstow. "I am happier leaving it up to them as there is always so much to do here running our own business that I don't really want the additional hassle or worry," Ms McLeod said. Specialist property management firms for expats include ADS Lettings and Your Move: Mr Cox uses Homebase Property Management and recommends their service.Consider using a firm local to your property – though if you increase your portfolio to include homes in several areas, you may need more than one company. It is worth using a management service that only does property management. "Ensure that they care about you and are not just interested in property sales," Mr Cox said. "Quite often property companies do it all and this can be an issue, as a broken boiler can be crucial for your tenants but for someone doing property sales as well, it is just an annoyance getting in way of closing a big property sale elsewhere." Buy-to-let rents averaged £919 a month across the UK in May, according to letting agents haart. But figures for London show average rents of up to £1,032 a month, up 4.5pc over the last year. London demand also remains strong, with up to seven renters chasing every available property in certain parts of the capital and the South East. You will need to take into account property management fees. But even a small profit is worth it if the property value is increasing. Kate Faulkner, managing director of Designs on Property Ltd, said: "The future of buy-to-let investment remains bright for those who choose their properties carefully, and appreciate success is down to financial management and getting the legals and tax implications of investing in a property portfolio correct." This article was originally published in The Telegraph Weekly World Edition View the original article here
http://bit.ly/LV07bH
You will need considerable funds to secure a property – a typical deposit is around 30pc, though experts hope that will fall to 25pc soon, while fees are about 1pc of the loan amount. You also need to consider tax issues and forex rates. You may buy a property in sterling but receive your income in another currency – this leaves you vulnerable to fluctuating exchange rates. If you are a cash buyer, sales can take six to eight weeks to complete – more if buying off-plan – and rates can change during this time. You should also consult an international financial adviser about the implications of drawing an income from a source in Britain. Estate agents with buy-to-let UK property packages will be able to advise, but it pays to also get independent advice. After all, for expats who move overseas to retire, a property portfolio could provide for their future. Stewart Dick, head of sales at Hornbuckle Mitchell, believes that a recently proposed move to include residential property in pensions would be of interest to many expats. "Current law bars pension savers from including residential property in their SIPPs and SSAS but if it were allowed we could expect a great deal of interest, as many view residential property as a far more accessible and understandable asset class than commercial property," he said. Savills, Knight Frank and Harrods Estates are popular estate agents for premium property but humble family homes remain in demand too. Research from property firm Paragon found that from the start of 2012, professional landlords have increased the size of their portfolio by 1.8 properties to an average of 10.8 properties. Terraced homes remain the most popular purchase, followed by flats and semi-detached homes. A good management or estate agency is essential for long-distance long-term lets. Some may be tempted to let to friends and family, but this can prove problematic. Vicki McLeod and her husband moved to Mallorca from London in 2004. She set up a PR/photography business, Phoenix Media Mallorca, and decided to retain her flat in Walthamstow in case they had second thoughts about the move. "We initially rented it out ourselves to people that we found through friends," she said. "At the end of the rental period we went to check the property and found our burglar alarm had disappeared. "Then we rented the property to members of our extended family and that went really badly – they owed rent, our mortgage payments got behind and the house was left in a mess." They are now with Spencers Property Services in Walthamstow. "I am happier leaving it up to them as there is always so much to do here running our own business that I don't really want the additional hassle or worry," Ms McLeod said. Specialist property management firms for expats include ADS Lettings and Your Move: Mr Cox uses Homebase Property Management and recommends their service.Consider using a firm local to your property – though if you increase your portfolio to include homes in several areas, you may need more than one company. It is worth using a management service that only does property management. "Ensure that they care about you and are not just interested in property sales," Mr Cox said. "Quite often property companies do it all and this can be an issue, as a broken boiler can be crucial for your tenants but for someone doing property sales as well, it is just an annoyance getting in way of closing a big property sale elsewhere." Buy-to-let rents averaged £919 a month across the UK in May, according to letting agents haart. But figures for London show average rents of up to £1,032 a month, up 4.5pc over the last year. London demand also remains strong, with up to seven renters chasing every available property in certain parts of the capital and the South East. You will need to take into account property management fees. But even a small profit is worth it if the property value is increasing. Kate Faulkner, managing director of Designs on Property Ltd, said: "The future of buy-to-let investment remains bright for those who choose their properties carefully, and appreciate success is down to financial management and getting the legals and tax implications of investing in a property portfolio correct." This article was originally published in The Telegraph Weekly World Edition View the original article here
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