Property Investment

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Residential Property

Whether to create a handsome annuity pay out for your retirement, or as a way to avoid inheritance tax penalties, there are many reasons to consider property investment.

It is true that the property market has suffered much loss in recent years. However, with favourable interest rates, many repossessions and banks looking to claw back public confidence, now might be an excellent time to invest in the property market.

If you are ready to take the plunge, consider the following tips.


After you invest in another property, a big part about profiting from it is making sure that the financing is in place. Property investment is not like operating a retail store where you buy something wholesale for £10 and sell it for £20.

First, you must identify your goals and determine if you want to rent the house and ultimately, once paid off, have a nice annuity, or if you want to move the property on quickly for a more short-term profit. If you are looking to the latter and you're confident that you can find a buyer, consider an adjustable mortgage with a very low temporary interest rate. These adjustable rate mortgages have been the source of a lot of problems, but if you know you can sell for a profit before the mortgage resets (2 to 5 years), you can maximise your cash flow by paying only the interest, thus making the capital the buyer's responsibility.

For longer-term investments however, fixed mortgages are better because they allow you to plan your cash flow accordingly and get by when things are tougher.

Many people who invest in property may be in a hurry to pay off, but remember; you are using rental income to help subsidise the mortgage payment. If you have a long-term strategy, you can rest assured, knowing that someone else is paying more of the interest and capital each month than you.


When you invest in any property, money is made or lost behind the scenes, not when the final deal is made. For example, you may have turned a £10,000 profit on the sale price after one month, but if you pay your solicitors £1,000, your contractors £5,000, and your estate agent fees £5,000, you will have lost money on your deal.

Additionally, the right improvements to your property can really add some value. Hire professionals to do these things for you only if you need the help. You certainly do not want to do something you are not capable of doing. Consider the skills you have and what really needs to be done to get the place up to scratch. In terms of other professional services, consider avoiding a Letting Agent who would take a valuable percentage of your rental income.

You may be surprised to learn that there are many tasks you can do yourself, without having to pay someone else. However, if you really must remain hands-off on everything, make sure that you budget accordingly so that profit is not swallowed up and costs do not spiral out of control.

Use help where appropriate

Just as in any venture, it is tough to go it alone. Hire the estate agents when it makes sense. For instance, if an estate agent comes along and can find you a buyer three months sooner than you can on your own, paying that commission may be far better than paying two more mortgage payments. Hiring a solicitor to handle some of the paperwork for issues pertaining to the contract and title deeds might free up some more time to find the next deal or finish painting the investment property. More importantly, if this is your first deal, having a paid advisor might make sense to make sure you avoid any stumbling blocks or legal entrapments. Certainly, you should learn from this engagement as it might be possible to handle it yourself the next time you invest, therefore saving yourself some fees.

Know market trends

If you are new to the market, you have a disadvantage over the other more experienced businesses and individuals. Whilst you can't gain overnight experience, you can educate yourself on as many of the issues and trends as possible. Research house and rental prices online and in the press and you can even visit homes that may be similar to the one that you are going to list. Contact the local banks and see what is really happening in terms of mortgage rates and deposits. Use this knowledge to avoid paying too much and perhaps even negotiate a better deal.

Make real investments

When investing in property besides your primary residence and building your empire (regardless of the size), the most important rule is to just practice basic business principles. Your goal is to sell something for more than it cost to buy it and repair. When renting, you are relying on rental income to subsidise a fair amount of your mortgage, but not the entire amount. Dreams of making a "quick buck" will likely lead you to trouble, but making sensible, business-focused decisions should allow you to extend your property portfolio outside of your home.

Holborn Assets can help you with the structuring of your property purchase, the management of your finance, the individual structure employed on each of your deals and the strategy applied to your overall portfolio. We'll answer your questions making sure you are 100% clear every step of the way. Contact us today for more information