Costs in Buying an Investment Property
Costs in Buying an Investment Property
Costs in buying a investment property are numerous in addition to the sale price. Learn more about all the other costs relating to a investment property purchase with our guide.
Learn More About the Costs Involved in Buying an Investment Property
When you purchase a investment property, there are several costs that need to be taken into account:
Fees for Any Professional Advisers (Surveyors, Solicitors Etc) & Investment Mortgages.
An acquisition surveyor will charge a fee of between 0.5 % to 3 % of the total cost of purchase. There is likely to be a degree of a negotiation on this fee, depending upon the complexity and skills required to complete the acquisition.
Solicitor’s fees are generally between 0.5% to 1.25% of the value of the transaction. This can also be negotiated, depending upon the circumstances of the acquisition.
You may need a investment mortgage to finance your property purchase. The terms could vary greatly from 1 to 15 years or more (Please refer to ‘Investment Mortgages’ Section for detailed information).
Business Rates
Business rates are based on the rateable value. These valuations are carried out by The Valuation Office Agency (VOA). These are revised on a periodic basis. The last valuation in England and Wales was carried out in April 2010 (Please refer to ‘Business Rates’ Section for detailed information). Scotland has its own system called Non-Domestic Rates, which is carried out by the Scottish Assessors (Valuation Department) and the poundage is set by Scottish Ministers. The last revision was carried out in April 2010.
Other Costs Involved
- Local authority charges for services (i.e. parking and waste collection etc).
- Insurance
- Repairs and maintenance
- Running costs or Service charge (lighting, heating, any cleaning services etc). You should ask to see an Energy Performance Certificate (EPC) for the investment property and ensure that a copy is made available. It is a legal requirement for the seller to provide this prior to the property being marketed. (Please refer to ‘Investment EPC’ Section for detailed information).
- Stamp Duty Land Tax (SDLT) – payable on the majority of investment properties (Please refer to ‘SDLT’ Section for detailed information).
- Deposit – this is in general equivalent to around 20% – 30% of the investment property value.
- VAT (if you’re registered for VAT, you may be able to claim it back) some buildings have been elected for VAT which means you will pay VAT on all building costs and service charges. An identical building next door may not have been elected for VAT and therefore VAT will not be charged on the service charge.
Previous Article:
Next Article:
Investment Property Buyers Guide: Navigation Menu
Disclaimer:
The Content above is for guidance purpose only. While we make every effort to keep the information current and correct, we do not make representations of any kind. Professional advice should be sought, before entering into any legal contract and purchasing a property.