When you’re investing in property, understanding the difference between net profit vs gross profit is key to making informed financial decisions. Knowing how each figure impacts your returns allows you to have a clearer picture of your investment’s profitability. In this article, we’ll explain the differences and explain how to calculate them. What is Gross Profit? Gross profit refers to the income you generate from your property investment after subtracting the direct costs associated with owning and maintaining the property. For property investors, this typically means the rent received min ..read more

A void period is when a rental property is unoccupied between tenants, leading to no rental income. Landlords still face costs like mortgages and maintenance. In this article, we will explain what they are and offer tips to reduce these gaps to ensure a steady income and maximise your return on investment. Key Takeaways Void periods in rental properties can lead to significant financial strain for landlords due to lost rental income and ongoing expenses. Implementing strategies such as early marketing, thorough tenant vetting, and competitive pricing can effectively reduce void periods and m ..read more

An assured shorthold tenancy (AST) is a common type of rental agreement in England and Wales. It sets out the terms under which a tenant can occupy a property and the landlord’s responsibilities. Key Takeaways Assured Shorthold Tenancies (AST) provide a structured yet flexible framework for landlords and tenants in England and Wales, ensuring clear terms and protections, with a minimum six-month eviction protection. Key clauses in an AST must clearly outline rent, tenancy length, and responsibilities of both parties, while avoiding illegal clauses such as excessive interest on overdue rent a ..read more

Capital gains are profits from selling assets such as an investment property that have appreciated in value. Understanding what capital gains are will help you to calculate the profitability of an investment and will have an impact on your overall return on investment. Key Takeaways Capital gains tax is levied on the profit made from selling an appreciated asset and is dependent on the duration the asset is held and the seller’s income level. Capital gains are realised when an asset is disposed of through selling, gifting, transferring, swapping, or receiving compensation for its loss or des ..read more

A buy to let property is a property that is bought to rent out to tenants. This type of investment provides rental income and potential property value growth. Key Points Buy-to-let or BTL properties generate income through rental earnings and potential property value appreciation, appealing to investors who prefer tangible assets over volatile stock markets. Securing a buy to let mortgage involves ensuring rental income exceeds mortgage payments by a significant margin and managing related expenses, including higher interest rates and specific purchase costs. Landlords must adhere to stringe ..read more

The Non-Resident Landlord Scheme (NRLS) is an HMRC scheme that requires landlords living outside the UK for more than six months a year to pay tax on their rental income from UK properties. So if you have purchased investment properties that you’re renting out in the UK but spend most of the year abroad, then understanding this scheme is crucial. In our guide we will walk you through your obligations, registration requirements, and how to manage tax efficiently under the NRLS. Key Takeaways The Non Resident Landlord Scheme (NRLS) requires non-resident landlords to either have tax deducted fr ..read more

Investors often ask how to calculate return on investment for their financial endeavours. ROI is a simple concept: it’s the net profit from an investment divided by the investment’s cost. This article will guide you through the process of calculating ROI when you’re investing in property. Key Takeaways ROI calculation for buy-to-let properties is essential for comparing investment efficiency and is influenced by rental income, expenses, and financing methods such as cash or mortgage options. A ‘good’ ROI is subjective and varies among investors with different goals and risk tolerances, usual ..read more

Wondering how much you need for a down payment investment property? It’s a pressing question for anyone looking into property investment. With typical down payments ranging from 5-20% for conventional mortgages, understanding the financial barrier is crucial. This article looks at the requirements of down payment in property investment, giving you the knowledge to strategise your entry into the property market. Key Takeaways A conventional mortgage requires a down payment of 5-20% of the purchase price with the most common loan range being between 15-30 years. Portfolio Landlords require a d ..read more

As we stand in 2024, investors are keeping a close eye on the UK property market. Despite shifts in the global economy and internal market dynamics, the question arises: is UK property still a good investment in 2024? With indicators pointing to a sustainable appreciation in property values and promising regional market strengths, this article looks at why UK property is still a good investment in 2024 and beyond. Key Takeaways The UK property market in 2024 is resilient, with forecasts predicting a 3% rise in property prices nationwide and a 2% rise in London’s mainstream market, driven by ..read more

Want to buy property for investment? Understanding the what, why, and how with our informative guide is essential for beginners and seasoned investors alike. We cover the different elements for you to create your property investment strategy – from identifying lucrative opportunities and navigating finance options to long-term management. With Prosperity Wealth you can start building your property portfolio with confidence. Key Points Property investment success hinges on identifying high-growth potential areas, conducting thorough market analysis, and determining the right property type to ..read more