Several problems that must be considered clearly in British real estate investment and leasing

There are five factors to consider before deciding to invest.

I. Stamp Duty

Before April 2065438+2006, the stamp duty of self-occupied and investment houses was the same. But now anyone who buys a second house must pay 3% more on the original basis. If you buy a 300,000-pound property for investment, you have to pay 65,438+04,000 pounds of stamp duty, 9,000 pounds more than before.

Second, the vacancy period.

The vacant period between the old tenant moving out and the new tenant moving in is the killer of rental income, which not only loses the rent, but also pays local government taxes, property management fees, utilities and mortgage interest. When investing in real estate, we must include the impact of the vacant period in the budget before we can deal with it psychologically and financially.

Although it is difficult to completely avoid the vacancy period, some preventive measures can be taken. First of all, before buying a house, we must investigate how long it usually takes tenants to turn around. Visit a rental agency with offices near the hotel. They are very familiar with the local market, and most of them are willing to give advice. If it is inconvenient to go in person, you can search online and try to communicate by telephone. Generally, if the vacancy period exceeds two weeks, it needs careful consideration, because once the market fluctuates slightly, the vacancy period can easily be extended to more than one month.

Generally speaking, the most effective way to reduce the vacant period is to invest in properties near public transport facilities, preferably within five minutes' walk. Remember, not only ask the intermediary who sells your property, but also consult the local intermediary company!

Third, agency fees.

Agency fees vary from region to region and can be negotiated. Full-service rent (such as finding tenants, credit investigation, maintenance, rent collection, etc.). ) It is generally at least 15% in central London, and it is generally between 10% and 15% outside central London. The more real estate, of course, the greater the bargaining space.

For those who are not often in the UK, are busy with work or are not used to English, you can consider hiring an intermediary to find a tenant and manage the rented property. Professional intermediary can share a lot of pressure for the landlord, so that the landlord can live with peace of mind or develop his own career.

I know a landlady who once owned an investment property in central London. She was sent to the United States for two years because of her work, but because she didn't give up her own money to ask an intermediary to take care of it, she only found a college student in London at a low price to provide some minor repairs for her tenants. However, because there are many problems in the boiler, heating and alarm system of this property, the college student cannot solve these problems at all. Tenants are extremely dissatisfied and demand a refund, and the landlady herself is under even greater pressure. These problems put more pressure on her. Finally, she decided to sell this high-end property at a reduced price.

In the following years, house prices have been rising, but they all missed her. Another landlord friend, although busy and inexperienced, has easily invested in four properties in recent years after hiring an intermediary, all of which are rented houses. This may be an extreme story, but as an investor, you really need to consider a longer-term plan, and you must not lose big because of small things.

Fourth, tax incentives.

Under the framework of the new policy, the tax benefits enjoyed by some landlords are slowly disappearing. In the past, people with high tax rates could enjoy high mortgage interest tax relief. For example, people with higher incomes are required to pay 40% tax, and they can also enjoy 40% tax relief on mortgage interest paid by investing in real estate. But in the future, all landlords will calculate the tax deduction according to the lowest tax rate of 20%, so the policy will be fully in place in 2020/202 1. In other words, if your income is within the basic tax rate in Britain, you are not affected, and of course, cash buyers are not affected.

Verb (abbreviation for verb) Other expenses

Maintenance is an important aspect of leased property. Landlords have an additional responsibility to ensure that the property provides a safe environment without health hazards. For example, the landlord needs to invite qualified technicians to conduct gas safety inspection every year. If you hire an intermediary, the intermediary will contact the relevant services for you, but the maintenance costs incurred during this period will be borne by the landlord.

Some properties were originally bought for personal use, but later they were originally used for rent because of changes in the owner's situation. If there is still an outstanding mortgage, the homeowner needs the approval of the loan bank before renting it. If the current mortgage does not contain lease terms, or the loan bank does not approve it, you have to change the mortgage, which means extra expenses and time.

Five main points that must be considered in buying a house and renting a house in Britain