A property, when it comes to real estate, is a term used to signify buildings. The property could be a house or other types of buildings such as offices, malls and plazas among others. Getting a property is often very expensive and requires a lot of effort to go into finding the right property to purchase.
There are many reasons why people acquire properties and they can be classified into two major reasons: for personal use or as a form of investment. For investment purposes, you might want to sell out the house for profit immediately, rent it out or sell it out at a later time when the value of the house would have increased. Hence, some people often acquire multiple houses intending to keep the first one for personal use while using others as a second home or for investment purposes. If you want to get multiple properties in the UK, you should know what are the pros and cons of getting multiple properties so that you can make an informed decision and know what you stand to gain and what you stand to lose. You can subsequently decide if what you have to gain is more or not.
Pros of having multiple properties in the UK
The pros of having multiple properties in the UK are discussed subsequently.
A second home
One of the advantages of having multiple properties in the UK, specifically home, in this case, is that it could serve as a second home for you. Having a second home can come in handy if you regularly vacation or visit a particular part of the UK different from where you reside. As opposed to always making accommodation expenses when you visit such a location, you can settle into your own house. Considering that most hotels charge per night, you would find out that the money you would be spending if you are staying for anything more than a week, or a month, would be significant. However, with your house, you will spend significantly less and have more freedom when you have a home you can stay in. If for example, you have to visit your home for a minimum of 6 weeks every year, you would notice that your expenses on hotels would be enough to buy another house. Thus, having a second home is an advantage of having multiple houses in the UK. It is possible to read advices to get a mortgage to get some information before getting a mortgage to buy a second house.
Investment and source of income
Multiple properties could serve as a source of income. For instance, if you have other houses apart from the one you live in or you have other types of properties such as those for commercial usage, you can rent them out. This way, other people can pay you regularly for living in or using those properties. This payment known as rent , could be monthly or yearly depending on your agreement with the tenants. This can be a regular source of income for you especially after you retire.
Could come in handy when you need money
Investing in multiple properties can also help you out when you need money. If an emergency should come up where you suddenly need over 100,000 GBP urgently, you can easily sell off one of your properties to raise money for the need depending on how important the need is and if selling your house to take care of the need will be worth it.
Cons of having multiple properties in the UK
There are some cons to having multiple properties in the UK. Some of such cons are discussed subsequently.
In the UK, there is an extra 3 per cent stamp duty that applies when you are buying a second house. As a result of this extra cost, it would be more expensive to get a second property than getting the first property. However, this should not discourage you if you can afford it. It is just great that you fashion in the stamp duty when you are calculating the cost for the property so that you are sure that you can afford the property alongside the stamp duty before you start paying for it.
Difficult in borrowing
There are also instances where having multiple properties can reduce your chances of getting a loan from the bank. For instance, if you want to get a loan from the bank and their calculations show that what you are getting from your properties is below the mortgage for the properties you own, the loan could be declined.