Superyacht Crew - How much does it cost to invest in property?
Investing in property, in our opinion, is a no brainer for yacht crew. What could be better than using your hard earned wages to not only create a second income stream; but also build a portfolio of lifetime assets. The whole idea of becoming a portfolio landlord may seem daunting to crew and it's true that there is a fair bit to learn, but take it from us, it's worth it.
One of the big questions we get asked at Anchor Property is how much will I need to save before investing. It's important to know all the costs up front when you buy property, a great investment can start to look less appealing once you do the proper maths. Some costs are fixed and some vary depending on the purchase price. We have put together a list of the likely costs you will face when buying property, to give you the upper hand going forward.
To keep things clear, we have based the following costs on a British crew member, purchasing their first property as an investment, for £150,000.
DEPOSIT: The most obvious (and biggest) cost of buying investment property is the deposit. In the UK the standard deposit amount required by the bank for the purchase of a BTL (buy to let) property is 25%. so in this case, the deposit you will need is £37,500.
PURCHASE TAX: Officially known as Stamp Duty Land Tax (SDLT) in the UK. This tax is paid on every property purchase on the day you complete and get the keys. It can vary hugely depending on your personal circumstances and the value of the property but for the purposes of this example, the SDLT due would be £500.
SOURCER/CONSULTANT: If you are looking for professional level investments and don't have the experience or knowledge to find and co-ordinate purchases yourself, you'll want a property consultant to take the reins and give you peace of mind. All consultants offer different services but at Anchor Property we charge a fixed fee of £2,950 to find, negotiate and completely coordinate professional level investments, specifically for Yacht Crew. A consultant will often negotiate a discount on property too, saving you not just time but actual money.
SOLICITOR: No property transaction happens in the UK without some legal involvement. A good solicitor will check every legal aspect of your purchase and make sure you aren't getting a bad deal. A quality, property specific solicitor is worth their weight in gold and you should expect to pay about £1,900 for their services when buying a property.
MORTGAGE BROKER: Mortgage Brokers are the middle men between you and the banks looking to lend you money. A good mortgage broker will make the difference between a long and painful purchase process and an efficient and enjoyable one. Always use a broker you trust and who understands the yachting industry. In most standard cases expect to pay around £495 for their services.
SURVEY: You wouldn't go to sea without thoroughly checking over your boat, and the same applies for property. A professional survey before you buy a property can save you thousands in the future and stop you making embarrassing property mistakes. In most cases, peace of mind from an RICS qualified surveyor will cost you around £495.
INSURANCE: Insuring your new property is extremely important. Once that property is yours, if anything happens you are responsible. Although highly unlikely, £150,000 can disappear in minutes if your new property was to flood or burn down and you had no insurance. There is specific insurance designed for rental property, and in this example, that would cost around £150 per year.
Now you have the facts about the costs involved when investing in property, you're far better equipped to appraise investments and set your savings goals. It's important to remember that these costs can change depending on your situation, so for more personal costings, just get in touch.
More questions? Contact us today and chat with one of our team for personalised property investment information and guidance.