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If you want to invest in property but are not sure which investment strategy is right for you, you’ve come to the right place. PropertyForum.com is a hub of free information and guidance about all types of property investment.

Buy-to-Let

If you are considering your first Buy-to-Let investment property, this section talks you through everything you might need to know as a first time landlord, including property sourcing, choosing a location, legal obligations, finding the best tenants and how to calculate Yield.

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HMO

If you are thinking about a HMO property investment there is much more to consider than a traditional Buy-to-Let. This section explains what type of rental property classes as an HMO and the additional responsibilities you have to take on board as an HMO landlord.

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Due Diligence

Use our detailed Due Diligence check list when researching all types of property investment to give you the best possible chance to buying with success.

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Property Investment Strategies, Mindset, Tax, Rental Income Spreadsheets, Buying Overseas, Entrepreneur Top Tips and much more.

The Landlord Tax Guide

An essential tax guide for landlords including how Section 24 might affect your income.

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The investors Guide to HMOs

The Investor’s Guide to HMOs

Everything you need to know about sourcing, renovating and running a HMO from experienced HMO developer, Nicholas Wallwork.

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The Investor’s Guide to Passive Income

An essential guide to using Property to create Passive Income.

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The Power of Visualisation

An introduction to the techniques and benefits of using Visualisation for success.

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Yield and how to calculate it

Yield is probably the most important calculation you will need to pay attention to when researching whether a property investment will work financially for you. Yield tells you how much of an annual return you investment is likely to provide. It is calculated by expressing a years rental income as a percentage of the property purchase price.

As an example, if the predicted weekly rental income on a house is £200, times that by 52 weeks to get the estimated annual return (in this case, £10,400). If the house price is £100,000 then the Yield would be 10.4%.

Yield Calculator

Calculate

Annual rent

Yield

A Yield of 7% upwards is considered a strong Yield. If you manage to secure a property below the asking price, you will notice the Yield will increase. But don’t fall into the trap of over-estimating potential rental income, as this will make your Yield look more attractive then it might actually be in reality.

You can calculate yield on potential rental properties by using websites such as Rightmove to do research on likely rental prices.

Yield calculations like this only show you the Gross Yield. You will need to remove all fees, running costs and repairs to know your Net Yield (and your true profit). Read our guidance on all the fees to consider before buying an investment property.

The good news is that rental income is taxed after expenses such as mortgage interest, fees and property maintenance have been deducted.

Stamp Duty and how it effects landlords

Every time you purchase a property in England and Northern Ireland you are liable to pay Stamp Duty. This is a land tax payment which is payable on every property costing most than £125,000, or more than £40,000 for a second home. Because Stamp Duty is due on every additional property you buy, it’s something that every landlord must understand and consider before expanding their portfolio.

Stamp Duty is applicable on both freehold and leasehold properties, whether you are buying with a mortgage or buying outright with cash.

Stamp Duty Calculator

Effective Rate 0%
Tax Band % Taxable Sum Tax
Less than £125k 0 £0 £0
£125k to £250k 2 £0 £0
£250k to £925k 5 £0 £0
£925k to £1.5m 10 £0 £0
Rest over £1.5m 12 £0 £0
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Below are the stamp duty bands for both standard and buy to let/second home purchases:

First Property: Property Value and Stamp Duty Land Tax Rate
Up to £125,00 = 0%
£125,001 to £250,000 = 2%
£250,001 to £925,000 = 5%
£925,001 to £1.5 million = 10%
£1.5 million and above = 12%

Second Property: Property Value and Stamp Duty Land Tax Rate
Up to £125,00 = 3%
£125,001 to £250,000 = 5%
£250,001 to £925,000 = 8%
£925,001 to £1.5 million = 13%
£1.5 million and above = 15%

Use our calculator above for an instant guide as to how much Stamp Duty you would need to pay for the property purchase you are considering.