Do you have plans to invest in property in the UK? Regardless of whether you have big aspirations to develop a portfolio of properties or simply want some first-hand experience of being a Buy-to-Let (BTL) landlord, we can help.
Before you can get stuck into your first investment property, however, it pays to be prepared.
Fortunately, the experienced team of property professionals at The Mistoria Group has helped countless clients to achieve their investment property goals.
Below, we explain how much money should be enough to get any beginner property investor involved in their first real estate investment.
We identify any unexpected costs and breakdown the various property-purchasing fees, so aspiring landlords and property investors alike can start to invest in property in the UK.
What costs are involved in a property investment?
There are three main costs that should be aware of if you’re considering investing in property in the UK.
This includes the upfront costs (like stamp duty and the property deposit), ongoing costs (such as maintenance fees and mortgage payments), and exit costs (including solicitor fees and taxes).
Plus, it’s always a wise idea to have a cash buffer to help cover any unexpected costs.
This might include unforeseen renovation work or additional legal fees – a few thousand pounds is often enough to provide peace of mind.
How much money do you need to invest in property UK?
While solicitors’ fees and taxes are important costs to bear in mind, the biggest outgoing when it comes to securing your investment property is the price of the property itself.
Unless you’ve been stringent enough to save enough cash to cover the full price of an investment property, you’ll need a mortgage.
If you’re hoping to buy an investment property using a mortgage instead of a full cash offer, then you’ll need to consider the size of your deposit. Unlike some lenders that can offer property loans with a five to 10 per cent deposit (based on the property’s price), most lenders will ask for a minimum deposit of 25 per cent for a BTL mortgage.
Not to mention, you can often get the best deals on your BTL mortgage by increasing your mortgage to 40 per cent or more.
As a result, your minimum deposit would be £65,572 and you would also need to factor in the aforementioned associated costs.
This includes solicitor fees and searches (often up to £2000), Land Registry fees (anywhere between £20 and £910 for each transaction), mortgage broker and arrangement fees (typically 0–3 % of the loan amount), and valuation charges (£150-£800).
BTL property insurance can also come in at around £170 per year and stamp duty, if applicable, is five per cent of the property price. In total, for a BTL property with a price of £262,288, you could be looking at £90,435.
With any additional work, such as cleaning and furniture, as well as a cash buffer also entered into the equation, setting yourself a goal of £100,000 for your investment property is a good idea.
However, it’s important to understand that costs vary greatly depending on the location of the property and it’s always best to seek expert advice if you’re concerned about mounting fees.
Invest in expert property advice
When it comes to building your financial health, it often doesn’t pay to make risky decisions.
With a helping hand from the property investment experts here at The Mistoria Group, you can invest in property, reassuringly guided by our years of invaluable experience and industry knowledge.
We specialise in property in the North West of England, including locations like Bolton, Liverpool, and Salford. Our in-depth local knowledge paired with our friendly team makes exploring your property investment opportunities even easier.
Regardless of whether you’ve found a suitable investment property already or you want help finding more lucrative real estate investment opportunities, we have insight knowledge regarding a diverse range of property investment opportunities.
To learn more about the different services available at The Mistoria Group or the best way to invest in property, feel free to give our friendly team a call today on 0800 500 3015.