If you have property investment included in your passive income or retirement plan you will have some important considerations to make to ensure you are making the right decision and of course, a worthwhile investment. This can be made easier if you choose to source advice from experts in the property investment field such as mortgage advisors, letting agents and accountants. All three can provide you with advice on the property you wish to buy, the profitability and of course the best financial products to provide you with the return on investment and passive income which you are looking for.
Buy to let mortgages especially can be a minefield with more stringent requirements regarding deposit and expected rental income, and as a result impartial mortgage advice from a qualified advisor should always be a priority. This kind of advice can often be received for free from advisory firms such as First Mortgage, who work purely on a commission basis. Not only will you benefit from the expert advice on what you can afford and recommendations when it comes to the specialist mortgage products available you will also get access to exclusive products and rates, which of course in the long term could save you a significant sum and provide you with a more desirable ROI.
A letting agent will of course have lots of insider knowledge regarding the rental market in a specific area and as a result can provide you with accurate information such as a rental figure which may help your planning in the long term. It is also important to consider the cost of the letting agent service and factor this into your predicted outgoings for the property. Although these can charge around a 10% fee on the rental income they do have the benefit of making your investment relatively passive by sourcing the tenants and dealing with any issues on a day to day basis.
On average you will be expected to have a rental income which covers 125% of the cost of the monthly mortgage repayment in order to cover the costs of a letting agent, any problems with the property and as a buffer if the property ends up being empty for a period of time between tenants. In addition you will be required to pay tax on any profits made from letting out your property and this is where an accountant will be advised, especially if you have never done any bookkeeping or accounting tasks in the past.