Creating a property portfolio: Where to begin
Property is considered as one of the most secure investments you can make, so building yourself a portfolio is pertinent…but how do you get started? Is it possible without using up savings? We’ll explain everything below.
Investing for future generations, preparing for retirement… Reasons for creating a portfolio are in abundance. This can be purchasing your primary residence, but also acquiring real estate assets to rent out, seen as second or additional residences.
Is Now the Time to Invest?
Jumping into the real estate sector is tempting, but should you be investing now? Changes to UK buy-to-let could make 2017 a challenging year for the UK market. However, if you choose to invest abroad, several EU countries are currently experiencing an attractive climate for investment. For example, lower house prices when compared with the UK and an attractive buy-lo-let scheme make France a good choice for rental investment this year. Furthermore, property investment is one of the only types of investment where banks are confident lending to clients , as it is more secure than its counterparts and rental income is regular.
Capitalise on French buy-to-let
French furnished buy-to-let status (LMNP) is a financial incentive created by the French government to aid investors wanting to become landlords. Unlike the updated UK buy-to-let laws, French buy-to-let enables you to deduct expenses incurred, in addition to depreciating your income. Therefore, you can reduce taxes thanks to your investment. This, in addition to the VAT refund available for furnished buy-to-let (current VAT rates are at 20%), makes French property a logical choice for your portfolio.
Whether to spend or keep your savings
Those looking to invest in property can often be faced with a dilemma: is it worth using your savings to invest in property, or should you keep some money aside? In many cases it is beneficial to borrow more and keep some of your savings, especially for when it comes to life insurance. Indeed, low interest rates provide encouragement to borrow your finance instead of sacrificing savings. A strong savings account will also reassure the bank of your ability to reimburse the full amount, and saving accounts or ISAs can sometimes grow at a higher rate than interest on your loan.
Take time to find the right property for you
Whether it’s your first home or a buy-to-let investment, ensure that the property you are buying is right for you. Location, proximity to transport and amenities, and quality of build all determine the rate of occupancy and return on your investment, also they eventually determine the selling price when you decide to put the residence back on the market.
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