How do you know that the property your are buying will provide the desired Return On Investment (ROI)?
It is important that you understand the number of the residential property investment to ensure that the numbers stack up for you to make money. There are may aspects that the spreadsheet will go through to assist you in the buying decision making process:
- The purchase costs and associated fees
- How much Stamp Duty Land Tax (SDLT) will need to be paid including the 3% surcharge
- Refurbishment costs analysis, where to buy materials and where to identify reliable trades people
- Total amount you will need to invest (deposit + refurbishment costs + purchase costs)
- How much profit you will make (rental income less rental expenditure)
Once you have identified the above numbers you will then be in a position to see how much money you will make on a monthly basis. This will then help you to work out the Return On Investment (ROI)
What about tax?This spreadsheet also asks you to enter in your other streams of other income such as employment income, dividends and self employment. The spreadsheet will also tell you how much tax that you will pay on the property based on the budget tax changes, in particular Section 24 mortgage interest relief.
We have also written some articles that might help you make more money and pay less tax on your investment: