7 minute read
Money Matters
PROPERTY INVESTMENT
Many of the world’s wealthiest people have made their money through property investment, which doesn’t necessarily involve buying actual buildings.
If you’re keen to explore this avenue, it’s important to fully research your options to maximise any potential returns and minimise any losses. Here we look at the main factors to consider.
Property Investment Options
There are two main ways to invest in property, either directly, buying a domestic or commercial property or indirectly, putting your money into a property investment fund. While interest rates have been low, property prices have thrived, but do be aware that property is a risky investment and as always, do not invest more than you are prepared to lose. Investing in property may seem an intriguing prospect and reliable way to increase wealth, but it has many facets and there can be pitfalls along the way, so we’ve asked Lisa de Silva to explain the good, the bad and the ugly of property investment
DIRECT PROPERTY INVESTMENT
Buy-to-let
To maximise your returns on a buyto-let investment, thoroughly research both the location and the type of property you plan to buy. Talk to estate agents, study house prices and rental data and work out the yield your investment is likely to return. Do not forget that there can be many costs involved in buy-to-let investing, particularly if you outsource managing the property. It is also wise to accept that this is a long-term investment, which does not allow easy access to your money.
Property development
With TV shows highlighting the spectacular gains that can be made in property development, it’s easy to think this is a failsafe way to make money.
Do consider the costs and timings of the work involved. Can you do the work yourself? Is the market robust? Could prices have dropped during the renovation period? Have you accounted for the capital gains tax you will need to pay once the property is sold? Again, do your homework thoroughly to avoid potential pitfalls.
Buying off plan and selling on
This is high risk because while the price may increase during the period that you invest, the property being finished and then being ready to sell on, there are many difficulties along the way. The developer could go bust; the build could take much longer than planned; the finished spec may not be what you’d hoped for and finally, you may have trouble selling it.
Buying property abroad
While buying abroad seems attractive as you could rent the property out to holidaymakers and use it yourself as a holiday home, it involves lots of admin and significant tax complications. Also, consider the impact of another global pandemic which would wipe out any rental income or your ability to visit. Where you buy is crucial if you need to earn rental income. Consider how easy it is to get to. Is it already an established tourist destination? Would you be happy to holiday there every year? How long is the holiday season there? Do ensure you understand the tax and inheritance implications before you commit.
INDIRECT PROPERTY INVESTMENT
Real Estate Investment Trusts (REITs)
REITs are companies that invest in property and make most of their money from rental income. In this instance, you buy shares in the trust and your money is pooled with other investors to buy property. REITs do not have to pay capital gains or corporation tax because they pay out 90% of their income to shareholders. The main advantages are that you invest as much or little as you like and if you need fast access to your investment money, you can simply sell your shares.
Other indirect property investments
The other main ways to invest in property without buying a building include property unit trusts, property investment trusts, buying shares in property companies and investing in a property ISA, which means there is no tax on any returns. l
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I am pleased to offer the Ministry of Justice (MOJ)
Mediation Voucher
Scheme which has been extended for a further period of time. I apply for a one-off voucher worth £500 once you’ve filled in a couple of very easy forms and then claim on your behalf once you have clocked up that amount with me in the mediation room together (or Zoom room) with both of you. 148 SUSSEX LIVING | May 2022
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separately and then share (what they JO O’SULLIVAN want to share) with me so we can create a parenting plan that incorporates this holiday season and all the other important times ahead. Then everyone knows where they are and that makes life a whole lot easier. United Nations Convention on the Rights An image of the Child… ’was agreed by governments of the (including ours) around the world in 1989. workbook It says what they must do so that children we use grow as healthy as possible, can learn with at school, receive protection, have their families views listened to and are treated fairly. All the rights in the Convention apply to every Please call to discuss what might be the best process for child, no matter who they are or where they you on 07780676212 or email jo@osullivanfamilylaw.com come from.’ (Pocket Book of Children’s Rights, UNICEF).
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Child Inclusive Mediation does just that. It enables the child (with the consent of both parents and the child(ren) to have their views heard. It does not mean that the child will be asked where they want to live
Child Inclusive Mediation
Giving children a voice
or how often they want to see each parent. Rather that they can send ‘messages’ NB: The scheme only applies to couples who are sorting out arrangements for their children as well as back to their parents though the mediator. Usually the child will be 10 and older but their finances. It’s likely the MOJ scheme will end at some unknown future point. often it is helpful to hear from younger children. In particular, they will skilfully (and subtly) be asked how things are, how are their parents, how are they? How do they see their family? What makes their mum and dad happy? What makes the child happy? What makes them sad? Whenever parents hear back from their children it is always emotional, sometimes surprising and very often positive. Research has shown that when young adults are asked what upset them most about their parents break up, it was that they didn’t have a voice. They don’t expect their voice to have affected the outcome but they would just have liked to have had the chance.
