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What Makes A Good Investment Property? - From Tenants to Tax and Everything in Between

Providing excellent annual returns, and offering the chance for significant future gains, property remains an incredibly tempting investment across the UK. However, in order to ensure you get your slice of the property pie, you need to select an investment property with the right credentials. Keep reading to find out more. 

 

ROI

If you’re looking for a buy-to-let property, it’s all about ROI. The return you’ll see on your investment will be a major factor in deciding which property to invest in, with rents, house prices and potential income varying considerably across the country. According to The Telegraph, the average yield for rental properties in the UK is 4.17%. However, this can go as high as 11%, or even more, so choosing wisely is essential.

Ideally, most investors want properties where the rent will cover 125% of their mortgage payments. This ensures the property will pay for itself and gives the owner a financial buffer in case of urgent repairs, vacancies or other unforeseen expenses.

 

Capital gains

As well as a good rental income, most investors want to see a significant increase in the value of their property. This means buying a house or flat in an area that’s on the up. Across the UK, there are numerous postcodes that are gaining value fast. Investing in one of these hotspots could have a big impact on the future value of a property.

 

Good tenants

Good tenants are worth their weight in gold. If you have people who will care for your property, tell you when things go wrong and pay their rent on time, your investment will be in safe hands.

When buying an investment property, think about the type of people it will attract. The location, the number of bedrooms and the current condition will all influence who wants to live in your property, so put a bit of thought and research in before you sign on the dotted line. 

 

Tax

In April 2016, the stamp duty for buy to let properties was increased across the country. This has made some investments more expensive and buyers need to be aware of this tax hike before they select their investment property.

When looking to invest in the UK property market, it’s important to look for opportunities that offer good rental yields, the possibility for future capital gains and that appeal to your desired tenants. To find out more about opportunities in the local property market, or to learn more about investing in bricks and mortar, take a look around our site today. 

To find out more about the local and national property market, or if you would like to chat about anything to do with property investment, give us a ring on Norwich 01603 567804 or send us a message.

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