Investing in property is, arguably, one of the most stable forms of investment you can undertake.
Despite the short-term volatility expressed in the property market over the past five years, there is a long-term pattern of inflation-beating growth that makes property investment uniquely profitable, and uniquely low-risk to boot.
However, earning a profit from property investment movements is not as simple as ordering a sale.
There are additional financial and legal considerations, each of which come with their own price tag and which could eat dangerously into your profit margin. How, then, can you best go about maximising your returns?
Tax Efficiency in Property Investment
Easily the most important of costs to bear in mind is that of tax. Managing and selling property can incur different forms of tax, dependent on the purposes of the property.
For example, as a landlord, the rental income you receive is subject to Income Tax; meanwhile, the proceeds from selling a property are subject to Capital Gains Tax.
Tax efficiency in property investment describes the management of your portfolio in such a way as to minimise your exposure to taxation. This is done by leveraging tax benefits and capital allowances, a far cry from less-legal tax avoidance and evasion schemes.
Professional counsel can find the right mechanisms to reduce financial impacts of a sale, improving your end result.
Benefits of Professional Consulting
Professional counsel, though, describes another key cost relating to portfolio management. Without legal guidance, and without specialist conveyancing teams, you will struggle to sell much of anything at all.
Alternatively, with quality administrative and legal teams on your side, you can stand to benefit from greater profits and reduced outlay.
For instance, the right advisors can give you vital information about the state of the property market, and help you pick out lucrative opportunities for purchase or sale.
It is informed decision-making that will make you money, as opposed to the basic act of selling a property. Besides, you can use the cost of your counsel as an expense in tax reporting.
Effective Investment Techniques
Investing in property may be generally safer than going long on stocks and shares, but this does not mean there’s no art to buying and selling property.
There are many variables to consider in the management of a property portfolio, each of which can have profound consequences for the profitability of your investments.
Location is naturally a large factor here, as different regions see property values increase at different rates according to local government policy and infrastructure.
Identifying an up-and-coming region allows you to ride the up-swing of property values, but is not easily done without in-depth knowledge of a given area.
You must also be comfortable leveraging debt in order to acquire property, enabling you to build your assets quick and hold them for the long haul.
