Property investments historically have always been a safe option, nonetheless we advise you to approach it as a long-term investment and not approach it looking to make a quick profit.

Buying a property to let:
Property investment is a big attraction. Many say properties can be less volatile than the stock market (nonetheless that’s not always the case), properties tend to be regarded as the safer option when other assets tend to drastically change in value subject to global events. Purchasing properties for investments has the potential to produce capital growth (an increase in the value of your asset) as well as a monthly income from the rental.

Nevertheless, as with any other investments you would make, there are no guarantees. Prices go up as well as down. Procuring tenants especially the good ones who pay on time and take care of your property, is always the key to a successful tenancy.

Capital growth:
What is Capital Growth? This is the increase in value of your property over time and is one of the key reasons why people invest in property. The best possible outcome of achieving capital growth is buying the right property, in the right place, and most importantly at the right price.

Rental income and yield calculations:
When calculating income from property you should always apply the same standard as you do to any other investment, when benchmarking the possible return in contrast to what you might achieve elsewhere.
Calculating gross rental yield percentage: (total income per year ÷ the value of the property) x 100 = % gross Calculating net yield percentage: ([total income – total costs] ÷ the value of the property) x 100 = % net yield Calculating annual running costs: mortgage repayments + estimated refurbishment costs + time vacant + service charge and ground rent (if the property is leasehold) Always keep an eye on vacancy rates, i.e. the proportion of properties sitting empty out of the total rental supply.

Properties are a worthwhile investment:
If you hold your investment long enough, and you’re doing the right things, you should reach the phase when the profits start turning into larger gains. The rent you’re charging at first will increase over time, and you’ll be more comfortably repaying the mortgage.

However, once your rental income exceeds your mortgage repayments you’ll no longer be eligible for tax advantages, although that doesn’t mean you should rush to sell. Yes, you will have to pay more tax because your income you’re making from the investment exceeds your losses, however the main thing is you are making money, this is the reason why you have invested in the first place.

There is always temptation to take your profits and force invest them into another property and that can be a reasonable strategy, but the key is not to lose track of the costs involved in selling. Stamp Duty on a new purchase is a big deterrent.