Richard Butler-Creagh founded Henley Finance which provides short-term bridging finance to property development sector. Find out more about the extra cost of buying investments below:
There are a lot of worries today on how expensive properties are. The truth is it is even more expensive than most buyers and investors think because of the number of costs associated when buying an investment property that many of us fail to take into consideration. Let’s take a look at the most common costs related with buying your next investment property.
Stamp duty is one of the most expensive costs associated when buying an investment property. The cost of stamp duty differs depending on the state and value of your property. It can easily add 5% to the cost of your property. This is money you have to prepare since the banks won’t lend you this.
It is imperative to have a solicitor on your side to help you when you want to buy a property. Solicitors can charge anywhere from £600 to £1000 for your property purchase. A solicitor will help you with the signing of contracts, making sure the settlement processes will run smoothly, ensure all activities and processes are conducted legally and save you from anything that could affect you in the future by doing all the necessary due diligence.
Building and pest inspection
When you are planning to buy a stand-alone property rather than an apartment, it is crucial to organize a building and pest inspection. Older properties usually have a number of hidden issues that you may not have noticed on your initial inspection. So, don’t be too surprised if they turn up on the report. The expenses of a building and pest inspection may differ, but these are a good form of insurance. Remember if buying at an auction, this needs to be done well before the auction day because auction sales are unconditional.
A suitable accountant will pay for themselves many times over by understanding the investor’s personal situations and help them arrange your investments properly and as well as making sure you will take the advantage of the myriad of legal tax loopholes available to investors.
It is vital to engage with an expert property manager to look after your assets. While property management costs differ from agency to agency, this is not an area to try and cut back on costs. There is a huge difference between professional property managers and your rents being collected by the local estate agency.