For years, having a rental property has been considered a smart way to make large investments. A tangible asset, steady monthly income, and a large profit upon sale are all draws that seem like a no-brainer for an investor. In recent years though, changes to regulations combined with market uncertainty have diminished the potential returns for buy-to-let properties significantly.
Rental property has for many years been seen as a safe and reliable way to make large investments. A physical tangible asset with a steady monthly income and potential large profit upon sale. However in recent years with major changes in regulations and economic uncertainty have seen potential returns for buy-to-let properties significantly shrink.
Gold offers a real tangible asset just like the benefit of buying property, however has a very notable difference in entry level. Bullion House offers investments starting from as little as £50 that can be purchased within a few minutes, allowing new investors to safely test the market.
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START SMALL AND BUILD
A major hurdle to any property investment is the initial outlay. As of April 2019, the average house price in the UK is £228,903 – a significant amount of money even for a large investor. Unless you already have the capital available, you’ll need to borrow the money.
CGT AND LIQUIDITY
For the financial year of 2019/20 the CGT allowance is £12,000. This means that if you sold your property and made £50,000 profit, £38,000 of this would be eligible for taxation.This is done at a rate between 10% and 28%, which could see your profits reduced by a significant amount.
TAX
Rental income is taxable in the same way as income earned through employment, and the two are combined when calculating your income tax bill each year. If you collect £800 a month for a full tax year this will equate to an extra £9,600 income earned.
HOUSES PRICES
One of the biggest risks in investment properties are house prices. High demand has helped keep house prices high in the past decade, but indicators have been worrying. London house prices have been dropping steadily – losing 2.6% in the past year – and often act as an advanced indicator for the wider market.
