3 Things To Know Before You Invest In Property In The UK
Photo by Tierra Mallorca
Before you take your hard-earned money and invest in a property in the UK, there are a few things you need to know. Keep reading to find out what they are.
Being a UK landlord is tough
You may think that being a landlord in the UK is one of the most straightforward jobs there is. After all, all you need to do is find a tenant, and then you get to sit back and rake in the money, right? Well, sadly, it can be a lot more taxing than that.
In fact, UK landlords have a range of responsibilities that they must fulfil, including safety inspections, routine maintenance and emergency repairs. Of course, if you are in between tenants, you will also need to make sure your property is cleaned, painted and made habitable for the next people that rent it.
The good news is that a lot of this hard graft can be avoided if you opt to use a property management service. In fact, they will be able to deal with all sorts of issues for you from finding people to lease your property, to dealing with complaints and repairs.
Of course, such services do not come for free, and that means you will need to deduct any management service costs from your property investment profits.
UK property ownership isn’t always clear cut
You buy a property, you own it, right? Well yes and no, because when it comes to property investing things aren’t always as clear as investors would like.
Firstly, there are two types of ownership in the UK, including freehold and leasehold. You must know the difference between them before you invest though, because the first means you have the deeds to the building and the land it’s built on. While the second means you only have the deeds to the building for a set amount of time. After which it will revert back to the original owner. Of course, if you are buying to renovate, or demolish this will have a massive impact on what you can do.
Additionally, it’s essential to realise that if you buy a property while married in the UK, it is seen as jointly owned by you and your spouse. Conversely, property owned before marriage will be counted as separate to any joint finances. Therefore if you are looking to retain your investment no matter what, buying when you are single is the best idea.
Flippin’ ain’t easy
Flipping may sound like easy money, bit just like any other investment there is risk involved. One issue that many people forget to account for is that you may not be able to sell the property you have renovated straight away. Something that means your capital will be tied up with no way to get to it.
Additionally, it’s easy to get in over your head when it comes to buying a property to flip it, especially if you buy at auction. This is because often UK auction homes go sight unseen or with just a cursory inspection. Something that means they could be full of serious and costly structural problems you will have to sort before being able to sell them on.