Category: Guides

Guides

The Ultimate Guide to Buying an Investment Property in France

Post author By Robyn Peña
Post date July 7, 2022

Purchasing a property investment in France is a complex task and it requires a lot of analysis. In this article, we’ll feature the various kinds of mortgages in France, upfront & ongoing costs of investment property, taxes, and other fees that you should consider. Learn how you can strategize property investment in France & make an informed decision!

Variable Rate Mortgages

Variable rate mortgages can fluctuate, either on a 3- or 12-month basis, which affects your duration or monthly payments. This is usually decided before the loan is in place. The advantage of a variable rate is that there are usually no penalties for early repayment, partial or total.

Fixed Rate Mortgages

Fixed rate mortgages are worth considering in France as the rate is often fixed for the entire duration of the loan, up to 25 years.

Capped Rate Mortgages

Capped rate mortgages are interesting because the variable rates are incredibly low at the moment. Capital Repayment Mortgages Capital repayment mortgages are the main type of loan offered by banks in France, where you are repaying both capital and interest from the start of the loan.

Interest Only Mortgages

The purpose of this investment is to acquire interest and serve to repay the outstanding capital at the term of the loan.

How to apply for a mortgage in France?

The process of choosing and obtaining a mortgage in France can seem complex and obscure. Here are some of the requirements that you will need:

1. Mortgage Application

The first step is to request an official mortgage offer from the lender of your choice. Once the seller and buyer have signed a preliminary sales agreement, the bank is assured that the buyer can afford the loan (per French standards), and the property’s value supports the loan request.

2. Mortgage Agreement

Once you have completed the necessary application paperwork and agreed to the life insurance coverage, the lender will send you the mortgage offer. This may take up to 10 working days (but not more than 30 days) before signing and accepting the offer.

3. Notary Procedure

Finally, the lender will send a copy of the mortgage agreement to a notaire (notary), who will prepare the deeds of sale. The whole process typically takes around 2-3 months from signing the initial sales agreement to completion of purchase.

Here are some of the requirements:

Completed mortgage application form
Copies of the borrower’s passports or valid ID
Proof of income (self-employed individuals need audited financial statements for three years)
Bank account details
Proof of current address
Completed preliminary sales agreement
If improvements are to be constructed on the property, a property title or preliminary sales agreement for the land, building license, and the building contract and plans
The title deed or loan deed with a complete repayment table if the property is to be financed with a remortgage or equity release

How do mortgages work in France?

Mortgage costs in France depend on multiple factors – they are usually more expensive for existing properties than for new builds.
You can expect to pay between 10-15% of the purchase price in total transaction costs when buying property in France, including taxes and insurance.
Fees relating to the mortgage include mortgage arrangement/administration fees – typically around 1% of the amount borrowed (plus VAT)
Notary fees – usually about 2-3% for a new property and 6-8% for a property older than five years (plus VAT) Valuation survey – sometimes a requirement of lenders, costs around €250.

In addition to this, you can easily calculate how much the approximate monthly payment for your mortgage is using an online mortgage calculator in France.

Costs of Investment Property

Now that you have familiarized yourself with the kinds of mortgages, the next step is to learn more about the costs of investment! The average price of houses currently on the market is €10,650 per square meter.

The average monthly rent ranges from €32 – €35 per square meter. Let’s take a look at the major cities in France and create a comparison:

Location	Apartment price (per sq.m) within the city centre	Apartment price (per sq.m) outside the city centre
Paris	€13,852	€10,335
Nice	€6,325	€4,725
Antibes	€5,125	€4,000
Lyon	€5,100	€3,057
Toulouse	€4,688	€3,043
Nantes	€4,288	€2,622
Montpellier	€3,660	€2,575
Lille	€3,220	€2,540
Marseille	€3,200	€2,530

TOTAL EXPENSES & TAXES

Here is a summary of expenses & fees that you will need to consider when investing a property in France:

EXPENSES \| FEES	AMOUNT
Notary Fees	3-10% (+20% VAT)
Registration Fees	0.60% - 4.89%
Land Registry Salary	0.10%
Real Estate Agent’s Fees	1.50% - 5% (+20% VAT)

What is a good cash return / net rental yield?

You can generate good cash flow from your residential investment property by either renting out long-term or short-term. For the long-term rental, you’ll rent out your property for a minimum of 12 months. There’s very little maintenance to do and you’ll need to visit the property on a quarterly basis to do inspections & other similar errands.

However, if you are after high return investments such as over 10% net rental income, running a short-term rental is what you need to consider. By doing short-term rental, you need to target somewhere between 10 – 25% net rental yield, and 20-50% cash return during the first year.

Airbtics is designed to showcase accurate data for simulating cash returns using the ultimate Airbnb Calculator. Choose to stand out among your competitors & try Airbtics!

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Guides

The Ultimate Guide to Buying an Investment Property in Italy

Post author By Robyn Peña
Post date July 6, 2022

Purchasing a property investment in Italy is a complex task and it requires a lot of analysis. In this article, we’ll feature the various kinds of mortgages in Italy, upfront & ongoing costs of investment property, taxes, and other fees that you should consider. Learn how you can strategize property investment in Italy & make an informed decision!

Fixed rate

Provides the same interest rate for the entire duration of the loan. The rate is established during the signing of the contract and is calculated on the basis of the Eurirs European reference rate (also known as IRS: Interest Rate Swap), which is disseminated daily by the European Banking Federation.

Variable rate

Refers to an interest rate that varies, therefore increases or decreases, based on the trend of the Euribor. The reference interbank rate for this type of loan is fixed by the European Banking Federation.

Mixed rate

This type of mortgage is a flexible choice of interest rate that depends on the conditions agreed upon at the signing of the loan. It is possible to decide whether you can start with a fixed rate and then change it to a variable one or vice versa. The installment amount will be based on the fixed rate period which generally ranges from 2 – 5 years. This type of loan offers the borrower the possibility to change the rate once or more times during the course of the contract.

Constant variable rate installment

This type of mortgage allows you to choose a variable rate without affecting the amount of the installment which will remain fixed for the entire time of the contract, but the duration of the contract can be changed.

How to apply for a mortgage in Italy?

The process of choosing and obtaining a mortgage in Italy can seem complex and obscure. Here are some of the requirements that you will need:

1. Mortgage Application

Once you have selected your preferred bank, all parts of the loan application must be completed as precisely as possible. The mortgage application, prepared in the form of a questionnaire, usually contains standard information. This includes the following:

Personal data of the applicant or applicants for the loan
Complete address – indicate whether your current home is rented, owned or with third parties
Personal data of family members or dependents
Current occupation (if an employee: a certificate of employment, monthly net income, and annual net income documents should be declared)

2. The Preliminary Feasibility opinion

The data and requests contained in the application allow the bank to express an initial feasibility opinion on the loan transaction. The feasibility of the operation, and therefore the granting of the requested sum, generally depends on the contribution of several elements including:

The net income of the applicant and his family members (family unit) derived from the tax return
The value of the property subject to the loan
Technical / legal suitability of the property to be sold
Presence of additional guarantees given by third parties

Once all the data above have been presented, the bank will be able to express its own “feasibility opinion;” which, if positive, starts the next phase consisting in requesting documentation.

How do Italian mortgages work?

As of April 2022, Italy’s bank lending rate is at 1.2%.
A fixed rate mortgage in Italy reaches cost levels of between 2.5% and 2.8%

In addition to this, you can easily calculate how much the approximate monthly payment for your mortgage is using an online mortgage calculator in Italy.

Costs of Investment Property

Now that you have familiarized yourself with the kinds of mortgages, the next step is to learn more about the costs of investment! The current average price of houses on the market is €2,848 per square meter.

As of June 2022, the asking price for rental properties was the highest in the Lombardia region, with €15,300 per month per square meter. The lowest average asking prices instead, were in the Umbria region, with only €6,810 per month per square meter, the lowest value nationally. Here is a summary breakdown of the entire costs that you will need to consider in order to invest in Italy:

Average Property Prices in Abruzzo
For sale (per square meter)	For rent (per square meter)
€1,292	€7,79
Average Property Prices in Liguria
For sale (per square meter)	For rent (per square meter)
€2,522	€10,03

Source: Immobiliare Italy

Relatively, residential rental properties in Italy increased 5.93% compared to June 2021 (€11,30 monthly per square meter). Over the past 2 years, the average price in Italy has reached its peak in the month of June 2022, with a value of €11,97 per square meter.

UPFRONT COSTS:

1. Agency Fees

The standard agency fee in Italy is 3% of the purchase price plus VAT (currently 22%). The real estate agent must register your purchase contract with a registration fee of €200,00 plus a registration tax of 0,5% on the warranty down payments (or deposits) and tax stamps which are a minimum of €32,00.

The registration tax will be deducted from the registration tax on the final deed.

2. Notary Fees

The cost of the Notary is borne by the buyer and is a state-controlled fee for their services to oversee registering the public contract of your house purchase. The Notary costs between €1500 – €3000 depending on the cost of your house.

3. IVA (Value Added Tax)

All the above services are subject to IVA (VAT or Sales Tax) currently charged at 22%.

4. Geometra Survey (Conveyancing Fees)

Geometra is paid by you to check both the legal and structural state of the house. The structural part of Geometra’s survey is very basic. If you require a full building survey then this would be an extra fee, paid to a licensed structural engineer or the Geometra.

The price for this kind of structural survey is typically between €500–700, but could be more so it always good to get a quote. The Geometra then writes the preliminary contract and does the conveyancing.

ONGOING COSTS:

1. IMU Municipal Property Tax (Imposta Municipale)

You only have to pay this Italian tax if your house is a second home, rather than your main residence. It is calculated at 7.6% of the cadastral land value of the property, although it can be slightly more or less depending on the specific region you live in.

2. TASI Indivisible Services Tax (Tassa sui Servizi Indivisibili)

This tax is a kind of council tax levied on public services such as street lighting and road maintenance, but you don’t have to pay if your house in Italy is your main residence.

If you rent it out on a long-term basis, you have to pay 70–90% of it, while the rest is paid by the tenant, but if you let it for short periods as a holiday rental, you are responsible for the whole tax. It is worked out as between 1% and 3.3% of the property’s cadastral value, depending on the municipality it’s in.

3. Home insurance

For a house in Italy as with anywhere else, it’s always advisable to have home and contents insurance. The rates charged by Italian insurance providers are usually about €180 – €380 yearly, depending on the features of your house.

What is a good cash return/net rental yield?

You can generate good cash flow from your residential investment property by either renting out long-term or short-term. Looking into a more detailed guide for property investment in Italy can definitely help you decide which path you should take.

For the long-term rental, you’ll rent out your property for a minimum of 12 months. There’s very little maintenance to do and you’ll need to visit the property on a quarterly basis to do inspections & other similar errands.

Airbtics is designed to showcase accurate data for simulating cash returns using the ultimate Airbnb Calculator. Choose to stand out among your competitors & try Airbtics!

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Guides

The Ultimate Guide to Buying an Investment Property in Spain

Post author By Robyn Peña
Post date July 6, 2022

Purchasing a property investment in Spain is a complex task and it requires a lot of analysis. In this article, we’ll feature the various kinds of mortgages in Spain, upfront & ongoing costs of investment property, taxes, and other fees that you should consider. Learn how you can strategize property investment in Spain & make an informed decision!

Variable-rate Mortgages

The benefits of variable interest rates include taking advantage of low rates and more Spanish mortgage options. The interest rate is adjusted with the Euro Interbank Offered Rate (Euribor), which has been in negative territory since 2015. The disadvantage is not knowing how much your monthly mortgage payments will be in the long term because interest rates can rise.

Fixed-rate Mortgages

This type of mortgage is less risky since you will know exactly how much your monthly repayments are for the entire duration of the mortgage. You are also protected from future interest rate increases because the rate is fixed. This mortgage product became more popular with Spanish homebuyers in 2020 because it offers more security in uncertain markets. On the other hand, you will pay more to borrow the money when interest rates are low.

Mixed-interest-rate Mortgages

As the name suggests, this type of mortgage uses both a fixed and a variable rate. Most of these mortgages fix the rate for five years and then automatically convert it into a variable mortgage. Spanish lenders rarely offer this option.

Interest-only mortgages

Interest-only mortgages are less popular than other types of mortgages in Spain. Only residents can take out this type of mortgage, which allows you to pay off just the interest for the first term of the mortgage. While you can save money on your monthly repayments with an interest-only mortgage, you will often pay more in the long run, as it takes a lot longer to pay off the entire amount.

Non-euro mortgages

It’s very unusual for a Spanish bank to provide a loan in a currency other than euros. Although it’s a way of saving costs on the exchange rate, the Spanish bank might charge you more for the benefit of paying in your home currency.

Spanish mortgages for seniors

If you are a Spanish resident over 65 and receive a pension, you can retire in Spain and apply for a Spanish mortgage to buy a home. One product that can benefit expats is a Lifetime Loan. It allows senior residents of Spain to release equity from their homes and convert it into cash. Through this, a mortgage against the property that doesn’t need to be repaid within the property owner’s lifetime.

How to apply for a Spanish mortgage?

Cajas or banks are often offered by Spanish mortgages and are sold directly by lenders or mortgage brokers. Here are some of the requirements that you will need:

1. Spanish tax ID number (for foreigners)
Primarily, you need to get a tax ID – also known as NIE (Número de Identificación de Extranjeros). This can be applied at your local Spanish consulate.

Some of the documents that you will need to get an NIE are:

A completed EX-15 form
Supporting document (s) to show why you need an NIE
Copy of passport & original passport
Two passport-sized photos
€9-12 fee to submit tax form 790

2. Proof of employment or income

3. A pre-agreement with the seller

4. Proof that the property tax is paid to date

5. Details of your current debts and mortgages

6. Copies of all your existing property deeds (in Spain and other places)

7. Records of your current assets

8. Any prenuptial agreements (if applicable)

How does Spanish mortgage work?

The average mortgage in Spain has an interest rate of 2.25% for variable-rate mortgages & 2.8% for fixed-rate mortgages.
You will need a minimum deposit of 30% of the property’s purchase price.
The maximum debt to income (DTI) ratio is around 35-40% including the mortgage payment.

In addition to this, you can easily calculate how much the approximate monthly payment for your mortgage is using an online mortgage calculator.

Costs of Investment Property

The average per m² in Spain is €1,322 / m² (price per square meter). Here is a summary breakdown of the entire costs that you will need to consider in order to invest in Spain:

Average Property Prices in Spain
House	Prices
4 Rooms	€320,000
5 Rooms	€430,000
Flats	Prices
2 Bedrooms	€140,000
3 Bedrooms	€146,000

Source: Real Advisor Spain

UPFRONT COSTS:

1. Stamp Duty (Impuesto Sobre Actos Juridicos Documentados: AJD)

Refers to a tax on notarial acts implemented through different Autonomous Regions. Depending on the area, the amount can vary from 0.5% – 1.5%.

2. Notary’s Office (Tariffs)

Regulated by the Spanish government, tariffs are expenses that should be considered when buying a property – whether it is new or used. The prices vary depending on your preferred property but usually cost around €600 – €875.

3. Land Registry Fees

Once the documents have been notarized, it is important to take note that registering your deeds may depend on the property’s price. According to Spain’s 2022 tax research, it costs around €400 – €650.

4. Sales-related Taxes

As for expenses and taxes on the purchase of a new home, the most important tax is VAT – which amounts to 10% based on the property’s value. For instance, it would mean 10,000 euros in the case of a 100,000-euro home and 25,000 in a 250,000-euro home.
Taxes in the Canary Islands is at 6.5% (IGIC-Impuesto General Indirecto Canario).
For public housing, VAT can be up to 4%, but it varies depending on the Autonomous Community and the type of social housing in question.
A second tax must be added to VAT: the Documented Legal Acts (IAJD). This tax will be paid by the buyer and will depend on each autonomous community.
If you purchase a second-hand property, it is mandatory to pay for ITP (Transfer of Assets Tax in Spain), which costs between 4% – 10% depending on your autonomous community.

ONGOING COSTS:

1. Repayment mortgage is one of the ongoing costs that you have to consider. Usually in a series of monthly payments, this refers to paying both the capital that was lent and the interest accrued.

The maximum notification time a bank can require for repayment mortgage is one month.
It is important to know that simply paying off the debt is not the final step in canceling a Spanish mortgage. You must ask your bank to issue the notarial deed of cancellation (escritura de cancelación de hipoteca). Then, you should present this to the land registry yourself or have a lawyer (administration office) do it.

Here is a brief summary of mortgage costs in Spain:

Variable-rate mortgage fees:

0.25% in the first three years

0.15% in the first five years

Fixed-rate mortgage fees:

2% in the first ten years

1.5% after ten years

2. Agency fees vary based on your property’s percentage price. Although this is an optional expense, the approximate cost is €300.

TOTAL EXPENSES & TAXES

Let’s talk about the price comparisons for new & second-hand housing in Spain. It’s important to note that the exact figure will depend on the value of your preferred property & autonomous community.

For instance, if you are planning to purchase a property for €15,000 in Barcelona, here is the total expenses & taxes that you will need to consider:

EXPENSES \| FEES	NEW HOUSING	SECOND-HAND HOUSING
Notary Fees	€750	€750
Registration Fees	€365	€365
Management Expenses	€300	€300
VAT + IAJD	€17,250	(not applicable)
ITP	(not applicable)	€15,000
TOTAL:	€18,675	€16,425

What is a good cash return / net rental yield?

You can generate good cash flow from your residential investment property by either renting out long-term or short-term. On the other hand, some hosts who don’t want to purchase a property would opt for rental arbitrage in Spain.

Airbtics is designed to showcase accurate data for simulating cash returns using the ultimate Airbnb Calculator. Choose to stand out among your competitors & try Airbtics!

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Guides

The Ultimate Guide to Buying an Investment Property in United Kingdom

Post author By Robyn Peña
Post date June 30, 2022

Purchasing a property investment in the United Kingdom is a complex task and requires a lot of analysis. In this article, we’ll feature the various kinds of mortgages in the United Kingdom, the timeline of purchase, upfront & ongoing costs of investment property, taxes, and other legal fees that you should consider. Learn how you can strategize property investment in the UK & make an informed decision!

Repayment mortgages

This type of mortgage means that you pay back a small part of both the loan and the interest each month until it is paid off at the end of the mortgage term. You will need to set the amount of money that you want to borrow and the number of years that you want to borrow it for (the term of the mortgage).

Interest only mortgages

With an interest only mortgage, you only pay the interest on the loan monthly and then pay the remaining lump sum at the end of the mortgage term. Compared to a repayment mortgage, your monthly mortgage payments will be lower however it’s important to know that since the actual loan size is not shrinking over time (you’re only paying the interest), in the long run you will end up paying more.

Fixed rate mortgages

With a fixed rate mortgage, as the name suggests, you pay a fixed rate of interest for a set term, typically ranging from two to ten years, or sometimes even longer. This can provide valuable peace of mind, as your monthly mortgage payments will be the same every month, regardless of whether or not interest rates increase on the wider market. The downside is that if interest rates fall, you will be locked into your fixed rate deal.

Variable rate mortgages

If you have a variable rate mortgage, this means that your monthly payments can go up or down over time. Most lenders will have a Standard Variable Rate (SVR), which is the rate charged when any fixed, discounted or other type of mortgage deal comes to an end.

There are usually no Early Repayment Charges (ERCs) if you want to switch away from your lender’s SVR. Here are the following types of variable rate mortgage:

Tracker mortgages – move directly in line with another interest rate – normally the Bank of England’s base rate. This means that when the base rate goes up, your mortgage rate goes up by the same amount, and when it goes down, your mortgage rate goes down.
Discounted rate mortgages – This is a discount off the lender’s standard variable rate (SVR) and only applies for a certain length of time, typically two or three years. It’s worth noting that just because a lender is offering a big discount, it may not make their mortgage the best deal. SVRs differ between lenders, so there might be a better rate out there without a discount.
Capped rate mortgages – this means your rate moves in line with the lender’s SVR. They have an interest rate cap which means that the rate can’t rise above a certain level.

How does a first-time buyer mortgage work?

You have to deposit at least 5% of the property’s value
If it’s your first time to own a residential property in the UK, it’s worth considering what your Loan to Value (LTV) will be. Your LTV is the ratio between the amount of the loan you take out and the value of your property as a whole.
You can apply for a joint mortgage, however, both applicants must be first-time buyers.
For non-UK residents, you can apply and take a look at Residential and Buy-to-let rates.

Finally, the rates of first time buyer mortgage differ depending on your preferred bank. Here are some of the examples of banks that offer various interest rates:

Barclays’ first time buyer rates usually ask for 10% of the amount you want to borrow as a deposit – but some of our mortgages are designed to help if you’re struggling to save up that amount. You could also apply for a mortgage with a minimum 5% deposit using the mortgage guarantee scheme.
HSBC’s first time buyer rates have indicated various rates. On the other hand, the lowest interest rate is 3.19% fixed for a 2-year fixed standard mortgage rate.

Relatively, you can also check and compare the first time buyer mortgages in the UK according to your preferred buyer type:

How does Buy to let mortgage work?

You’ll need a minimum 25% deposit for a buy-to-let mortgage, although it can vary between 20-40%.
A buy-to-let mortgage is a mortgage loan specifically designed for the purpose of purchasing a property to rent it out.
The majority of Buy to Let mortgages are interest only. This means that the monthly repayments will only pay off the interest, not the amount owed on the mortgage (known as capital).

In addition to this, you can easily calculate how much you can borrow using a buy to let mortgage calculator based on your expected rental income.

Cost of Investment Property

Once you have familiarized yourself with the kinds of mortgages, the next step is to learn more about the costs of investment! Here is a summary breakdown of the entire costs that you will need to consider in order to invest in the UK:

UPFRONT COSTS:

1. Stamp Duty – is a mandatory tax that has to be paid if you purchase a residential property and usually costs more than £125,000. You can also use a stamp duty calculator for a more accurate answer. Let’s take a look at the stamp duty rates:

Stamp Duty Rates
Minimum property purchase price	Maximum property purchase price	Stamp Duty Rate
£0	£125,000	0%
£125,001	£250,000	2%
£250,001	£925,000	5%
£925,001	£1.5 million	10%
Over £1.5 million		12%

It’s necessary to file a Stamp Duty Land Tax (SDLT) return and pay the due for 14 days to avoid penalties. However, this varies accordingly:

• Stamp Duty Relief for first-time buyers

A stamp duty is NOT necessary to pay for on properties worth £300,000. You will only have to pay stamp duty at the relevant rate of 5% on the remaining amount for up to £200,000.

However, if the property that you’re planning to purchase is worth over £500,000, then you will need to pay the stand rates of stamp duty and will no longer be qualified as a first-time buyer.

• Stamp Duty for Non-Residents
The rates are usually + 2% higher in comparison to UK residents. Different rates of Stamp Duty Land Tax (SDLT) are also applicable to those who purchase a residential property in England & Northern Ireland.

• Stamp Duty on Second Homes

If you are planning to purchase another property, you have to pay an extra 3% in stamp duty on top of the standard rates. This excludes mobile homes & caravans.

2. Cost of the Property – depending on your preferred property type, the cost of your target property should be estimated using an Airbnb calculator

Average Property Prices in the UK
Property Types	Detached	Semi-Detached	Terraced	Flats
Average Price	£391,747	£245,218	£207,267	£218,829

Source: RW Invest UK

Average Property Prices in the London
Property Types	Detached	Semi-Detached	Terraced	Flats
Average Price	£1,088,765	£682,453	£574,983	£443,216

Source: UK Government

Average Property Prices in the Wales
Property Types	Detached	Semi-Detached	Terraced	Flats
Average Price	£326,907	£205,379	£164,838	£133,082

Source: UK Government

3. Legal Fees – with the help of a professional solicitor, legal paperworks can easily be handled which may cost around £1,000 – £2,000.

4. Land Registry Fees – properties in the UK with the price range of £100,001 – £200,000 will cost a £200 land registry fee. On the other hand, properties ranging from £200,001 – £500,000 will cost around £300.

5. Cash Buffer – refers to the number of days wherein your business may have surprise costs. You can prepare at least £2,000 as a cash reserve for any unplanned expenses that may come your way.

ONGOING COSTS:

1. Repayment mortgage is one of the ongoing costs that you have to consider. Usually, in a series of monthly payments, this refers to paying both the capital that was lent and the interest accrued.

Here are some of the most recommended mortgage repayment calculators online that are free:

Money Facts UK
Money Helper UK
Money Supermarket
Agency fees vary based on the percentage of the price your property. It can go anywhere from 0.75% to 3% VAT, depending on the type of contract that you have signed with your estate agent.

For instance, if a property is listed for £250,000, then a traditional estate agent fee could be £3,750.

LEGAL FEES:

1. Licensed conveyancer fees indicates any professional service to your solicitor or licenced conveyancer for completing legal work such as handling contracts, local council searches, and the like. You can also ask for conveyancing quotations which are usually fixed rates & fully inclusive.

The fees vary according to the type of property, location, and how complex the transaction would be. For instance, in London, a solicitor usually charges £850 – £1,500 with a VAT of 20%.

2. Mortgage fees in the UK usually include the following:

Booking fee = £99 – £250
Arrangement fee = £2,000
Mortgage valuation fee = £150 above

Timeline to Purchase a Property in the UK

So let’s talk about how long does it usually take to buy a property in the UK. While it’s a long process that should be properly strategized, it’s important to know how the typical timeline looks like. Here’s a detailed end-to-end timeline to prepare your expectations:

1. Getting a mortgage Agreement in Principle (AIP) – 24 hours

First and foremost, getting a mortgage in principle agreement should be the first thing you have to do to understand the price bracket of properties. When you approach a lender, it usually takes 24 hours – a few days to get an AIP.

2. Searching for the Right Property– 4 weeks to 8 months

This stage depends on what kind of property you are looking for. For instance, if you want a newly built property in an area with housing developments, then it won’t take a long time. You can also conduct an online research using estate agent sites to speed up the process!

3. Submitting & Approval– 1 day to 2 weeks

Once you have found the perfect property, the next step is to put in your offer. However, once your offer has been accepted, you can’t legally purchase the property yet until the exchange of contracts.

This is why you’ll need an estate agent’s help to make sure that your target property is settled & can’t be replaced by other offers!

4. Setting up your Mortgage– 2 to 8 weeks

By looking at various mortgage deals online, you can easily compare the costs & other factors to find the best deal. However, if you don’t have much time to do so, then seeking advice from mortgage experts in the UK would make your life easier!

5. Conveyancing – 4 to 12 weeks

This includes environmental searches, planning permission & other important documents that a conveyancing firm has to perform on your behalf. More often than not, a mortgage lender or broker is connected to a conveyancer so it’s best to ask for their recommendations.

6. Exchanging of contracts– 2 to 3 weeks

In this stage, the house purchase agreement is legally binding between the buyer & seller. Since most banks have a limited amount to transfer money, it’s best to check with them to make sure that your account isn’t over the limit.

7. Completion date– 2 weeks

Congratulations! Once your conveyancer has successfully facilitated the transfer of ffunds, you will need to consider other errands including paying stamp duty, registering, obtaining the title deeds, and the like.

• In summary, the maximum timeline for purchasing a property would be around 31 weeks or 7 months in general. Although this depends on your preferred property & other legal considerations, it’s always recommended to ask for advice from estate experts in the UK.

Where to find properties for sale?

Not sure where to find properties for sale in the UK? Make an informed decision by looking at the following list of options:

• Drive around your preferred area

If you need more convincing before you finalize your decision to purchase, then it’s highly recommended to visit or drive around your preferred area and look at the properties for sale!

• Reach out to UK-based estate agents

If you simply don’t have the time to look thoroughly for properties, then a lending hand from an estate agent is definitely the best option. By looking at the best UK estate agents & estate agents directory, you can definitely choose the best fit for your desired property.

• Look at the best property websites

There’s no denying that your pool of options can seem a little too overwhelming, so here are some of the best property websites in the UK that you can look into:

I. Rightmove

II. Zoopla

III. Savills

IV. On the Market

What is a good cash return / net rental yield?

You can generate good cashflow from your residential investment prroeprty by either renting out long-term or short-term. For the long-term rental, you’ll rent out your property for minimum 12 months. There’s very little maintenance to do and you’ll need to visit the property on a quarterly basis to do inspections & other similar errands.

Airbtics is designed to showcase accurate data for simulating cash returns using the ultimate Airbnb Calculator. Choose to stand out among your competitors & try Airbtics!

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Guides

The Ultimate Airbnb Investment Guide

Post author By Robyn Peña
Post date June 21, 2022

If you’ve always wanted to start investing in Aribnb but don’t know how – this article is for you! Learn about the process of Airbnb investment, the necessary steps you need to take, legal considerations, key metrics for successful Airbnb hosting, and so much more.

Frequently Asked Questions about Airbnb Investment:

1. How do you start an Airbnb investment?

If you already own the property, the first step is to take note of your overall costs and learn how much money you’re expecting to make using a precise Airbnb calculator. Since the property is yours, you only need to consider a few expenses & can even learn how to start Airbnb with no money!

On the other hand, if you are planning to purchase a property – you have to select the best location to attract the right target market and avoid bankruptcy in the rental business industry. You also have to create an Airbnb Investment Analysis to consider how much a property can make in a certain neighborhood or city, get acquainted with the Airbnb regulations, add the best Airbnb amenities, review the area’s tourism data, and anticipate other extra costs in the long run.

2. What are the requirements, taxes, and other legal considerations?

Once you have selected a target location for your Airbnb investment, it’s important to be aware of the laws in your target area in order to be on the right track.

Some of the legal considerations include business licenses, special permits, taxes, landlord-tenant laws, and other agreements.

Learn more about the Airbnb regulations by city here.

3. Where is Airbnb most profitable?

We conducted an in-depth research to identify the Airbnb occupancy rates by city and the data revealed that Miami Beach is the most profitable city, with the highest annual revenue of $63,072.

4. What are the Airbnb investment key metrics?

The key metrics of Airbnb are essential for hosts & managers to keep track of their overall finances and anticipate future expenses. These include the following:

– Occupancy Rate – the total number of days that a property is booked by guests. This is calculated by dividing the number of booked nights over the number of available nights.

– Net Operating Income – refers to the total revenue earned by a property after subtracting the operating expenses. This can be calculated by deducting the gross income with operating expenses.

– Average Daily Rate (ADR) – this represents the daily revenue that a rented property can make. It can be calculated by dividing the total bookings revenue over the total number of nights booked.

– Revenue per Available Room (RevPAR) – refers to the total amount of revenue a single room can make in your property. RevPAR is an essential metric that allows you to have an overview of your property’s performance and anticipate revenue increase.

You can calculate RevPAR by multiplying your average daily rate with occupancy rate.

– Average Length of Stay (ALOS) – this metric refers to the average number of nights that have been booked by an individual guest. This can be calculated by diving the number of nights booked with the total number of individual guest bookings.

– Relatively, if you have more than 1 property to manage, you can also calculate how much profit you can make in the next years by adding all the total costs that your guests paid for each of your rental properties.

5. How much money does it take to invest in an Airbnb?

If you already own the property, some of the financial considerations include:

1. Furnishing costs ($4,000 / two-bedroom)

If you are furnishing the property from scratch and are on a limited budget, you can look for second-hand furniture (dining table, 2-seater sofa, wooden bedframe, and lamps) online which may cost around $3,000 per unit.

You can also invest in multiple linens, high-quality mattress, and other bedroom essentials for as low as $1,000 per unit. Learn more about Airbnb startup costs in order to anticipate other basic expenses.

2. Cleaning services (Average fee: $65-105)

Cleaning costs may vary according to the type of listing that you offer & the size of your property. DIY cleaning is also an option if you have the time! You can also consider pricing correctly by looking at the average Airbnb cleaning prices:

– One room in a shared home: $25

– One bedroom: $40

– Two bedroom: $75

– Three bedroom: $110

– Four bedroom: $140

Relatively, if you don’t know how to find the Airbnb cleaning service that’s suitable for your property,here are some of the trusted sites that you can look into:

AIRTASKER | HOMEADVISOR | THUMBTACK | TURNOVERBNB

3. Legal consultation fees ($199 – $400)

It’s also important to have a real estate lawyer who can readily provide legal guidance to your Airbnb business in case you will face legal issues with the landlord or guests and help in damage claims & insurance. Here are some of the recommended Airbnb consulation services:

BUILDYOURBNB | RENTINGYOURPLACE | ALLBELONG

6. What are the pros and cons of long term rental vs short term rental?

If you’re still deciding whether you can invest in a long-term or short-term rental, here are some of the pros and cons for each to help you make an informative decision:

– Long-term rentals (occupied by a tenant for a 12-month period)

PROS: Highly predictable rental income, lower tenant turnover, and ease of financing.

CONS: Difficulty in routine maintenance and limitations to raise the rent price.

– Short-term rentals (rented on a daily, weekly, or monthly basis)

PROS: Higher potential gross rental income, better maintenance & flexibility.

CONS: Limited by local laws, lack of consistent rental income & higher operating costs.

7. How do you price an Airbnb rental?

If you are worried about pricing either too high or low, you have the option to select an Airbnb Dynamic Pricing to help you set the right price or spy on your competitor’s current pricing strategies.

8. How much do Airbnb hosts earn annually?

Based on our conducted research about average occupancy rates in various cities across the globe, here are the list of cities and their annual revenue:

View more cities and learn more about Airbnb Data 2022!

9. How do I discover new emerging markets?

You can discover and compare new emerging markets in the Airbnb industry with the help of an accurate data analytics tool to provide sound investment data & ranks.

Here are the different types of short-term rental analytics to guide you through!

10. How do I identify high-return homes?

You can easily identify high-return homes in the Airbnb industry by conducting either of the following techniques:

– Research for positive economic & demographic trends – by looking at the local economy’s GDP and employment growth rate, you can determine the highest return on real estate investments.

– Look out for the average performance of rental properties – checking the average performance on rentals can give you a concrete way to determine a high-return market.

– Use an Airbnb analytics heatmap – with the help of an Airbnb analytics tool, you can just sit back and relax while looking at accurate properties that are performing excellently!

The heatmap will allow you to filter results in your chosen location and display essential numbers such as cash on cash return, net rental yield, and profit before tax.

Best Tips & Guidelines for Airbnb Investment

Step-by-step Guide for Airbnb Beginners

If you have decided to start investing on Airbnb, there are a few major considerations that you have to think of. This includes the following:

Choose the right location – identifying the right location will allow you to foresee if your target market will have a high demand for your Airbnb property.
Local regulations & laws – no matter how you try to strive in the Airbnb business industry, you will only end up closing if you ignore the local laws. Make sure to do a thorough research before investing in your preferred area.
Make an informed decision based on numbers – once you have chosen the right location & considered the local regulations and laws, the next step is to create an informed decision by basing your analysis on numbers:

How much $ will you spend & how much $ will you profit?

Fortunately, the advanced technology in the digital era has enabled hosts like you to save some precious time and help increase profitability with the help of Airbnb analytics tools! Here are your options for the best Airbnb dynamic pricing tool to help you figure out how you can price accordingly.

5 Tips for a Successful Airbnb Business

1. Run The Numbers

– The biggest investment question: Is it worth the money?

By anticipating the costs and calculating your potential revenue, you can expect that your Airbnb business is on the road to success.

For instance, if you can already forecast your annual expenses, you can easily determine how much your annual revenue is. Here’s an example of Airbnb ROI simulation from Airbtics:

2. Furnish with Affordable yet High-quality Amenities

– The majority of guests that are deciding to book on Airbnb are usually looking at a property’s amenities, so make sure to give your best shot!

By investing in the best Airbnb amenities, you can exceed your guest’s expectations without losing so much money!

3. Promote your Listings Consistently

– You can ask any successful Airbnb hosts that you know and they’d tell you that promoting Airbnb listings is truly essential.

To do this, you can consider taking aesthetic photos of your property and highlight your edge among the competitors, coordinate with your local tourism council, and prioritize booking channels to become more responsive to inquiries!

4. Maintain Cleanliness

– Now more than ever, guests are definitely looking for more than just fancy stuff that they can find on your property. Amidst the pandemic, maintaining cleanliness on your property is truly one of the things that a successful host consistently checks on.

5. 5-star Reviews

– If you have just recently started with Airbnb, don’t worry! As soon as your property gets bookings, make the effort to send the best Airbnb message template to your guests & remind them to leave feedback about their experience.

Here’s the challenge: Aim for a 5-star review!

How to Invest in Airbnb without Owning Property

Do you have to own a property in order to start investing in Airbnb? Absolutely not!

Here are some of the finest options if you want to invest in Airbnb without owning a property:

1. Airbnb Rental Arbitrage

– How to get started with Airbnb Rental Arbitrage?

Airbnb rental arbitrage is a technique that some hosts are trying out because they can keep the money for themselves without much commitment.

You can get started by looking for your preferred property and put it up for rent with the main purpose of subletting it on vacation rental sites to generate revenue.

PROS: An expensive capital is not necessary when purchasing your own property. Plus, you can definitely have all the total income for yourself!

CONS: There are only a few selected landlords who will allow you to sublet their property on Airbnb. This is because of the local laws & regulations against subletting.

– How much can you earn on Airbnb rental arbitrage?

Depending on the location and size of your property, you can determine accurate revenue numbers by looking at the Airbnb rental arbitrage guide.

For instance, you can calculate your revenue by multiplying the year-round occupancy rate and average daily rate. If you charge $150 per night and achieve a 70% occupancy rate, you will make around $38,325 excluding other expenses and taxes.

2. Become a certified STR property manager (courses available online)

– Since there is a rapid demand in the vacation rental industry, becoming an STR property manager might also be the path for you!

Some of the key responsibilities include managing the needs of property owners, marketing tasks, confirming bookings, supervising the check-in process, and the like.

While some cities do not require licensing to be an STR manager, the best technique is to become a certified STR property manager by enrolling in property management courses online and receiving a specialized certification.

Some of the most recommended STR courses include:

VACATION RENTAL UNIVERSITY | CALIFORNIA ASSOCIATION OF REALTORS | ALTERSCHOOL

3. Co-hosting to an Airbnb host (10-20% per booking)

If you want to learn more about the Airbnb process, co-hosting might be the best recommendation for you!

Similar to a short-term rental manager’s duties, being a co-host will include tasks such as confirming bookings, property inspections, communicating with guests, and the like.

– Airbnb Investment Analysis

Before you decide to invest your hard-earned money in Airbnb, it’s important to create an Airbnb investment analysis. Here are your two options to do this:

1. You can either conduct an Airbnb investment analysis manually which takes a lot of time and effort;

2. Or utilize an accurate Airbnb analytics tool like Airbtics.

Guides

The Airbnb Academy- A quick guide

Post author By Yukta Debnath
Post date January 28, 2022

Table of Contents

Add a header to begin generating the table of contents

What is the Airbnb Academy?

Our vision is a world in which everyone can access and enjoy the power of technology and tourism. The Airbnb Academy is a tourism development programme built by Airbnb, focused on giving underrepresented and under-resourced communities the tools and resources to take part in tourism through the Airbnb platform. Programme features an immersive training curriculum focused on what it takes to succeed on the Airbnb platform. The Academy has four phases built from Airbnb’s first-hand knowledge and insights, they include: participant recruitment, training, post-training support, and community building.

The curriculum introduces tourism as a business opportunity, builds familiarity with the Airbnb online marketplace, supports participants in publishing a Home or Experience listing and builds meaningful connections between participants.

Upon completion of the Academy, participants are:

Confident using the Airbnb app and website;
Empowered to tell their personal story on a tech platform;
Published on the platform, with a Home or Experience listing that stands out;
Part of the Airbnb community and belong to a network of tourism entrepreneurs around the world.

Why the Airbnb Academy?

Post COVID-19, tourism recovery is likely to be uneven. Under-resourced communities were some of the first affected and may be the last to recover from the pandemic. Yet, the flexibility and accessibility of Airbnb’s platform make it easy for people across emerging markets to become tourism entrepreneurs and now more than ever, Airbnb will be a lifeline to many hosts and communities.

Unlike mass travel which bottles up the economics of tourism and takes money out of communities, Airbnb is a healthier form of tourism where hosts keep the vast majority – up to 97% – of the money paid by guests. Hosts set their own prices, and they benefit from reviews that help them create followings among the guest community.

What is the Airbnb Academy’s background?

In 2017, Airbnb Academy opened its doors in South Africa to offer hospitality and technology training to underserved towns and rural areas. As part of their USD $1 million commitment to inclusive tourism in Africa, Airbnb expanded the service to other neglected communities in South Africa and Kenya. The effort has recently expanded to include populations in countries other than Africa, such as Guyana and Argentina. Moving forward, we’re considering ways to expand the Academy to realise our vision of a world where everyone can enjoy the power of technology and tourism.

How can you collaborate with Airbnb Academy?

To deliver the Academy, we collaborate with grassroots organisations. They assess our partners using four essential criteria:

Proven track record

A track record of functioning in the community and generating outcomes.

Shared values

A community-first approach that is consistent with Airbnb’s values of belonging.

Strong training

An organisation with experience in skill development and training with a technological focus.

Tourist expertise

An organisation with competence in tourism development.

They find a cohort of motivated individuals in under-resourced or under-represented communities with significant tourist potential by collaborating with our partner organizations. They provide resources to individuals who need to create Homes and Experiences on Airbnb and become leading tourism entrepreneurs in their community.

Airbnb strives to meet the demand of 21st century travellers seeking more sustainable and impactful ways of travelling by opening up economic opportunities for individuals through Airbnb Academy.

What services does the Airbnb Academy provide to partners?

Community assessment tools

Recommendations for assessing your target community’s tourist requirements and prospects.

Curriculum for training and learning

Recommendations for arranging and facilitating digital skills and Academy training in your community.

Groups and discussions

A frequent online platform where partners can connect to share ideas and motivate one another.

Access to the Airbnb Academy team

Access to Airbnb staff who can answer queries and provide useful resources.

Feedback

An opportunity to share learnings with Airbnb and provide feedback that will help shape the programme.

What exactly is an Airbnb coach?

If you want to market your property but don’t know where to begin, an Airbnb coach can assist you! Whenever you have a question about the Airbnb hosting process, from making your listing to greeting your first guests, you can message them! They, too, had a million stupid questions when they first started their Airbnb, and they’d love to answer any of yours!

How Can an Airbnb Coach Assist You in Succeeding?

Airbnb coaches are like superhost friends that will guide you through the process of creating your listing. They’ll make sure you’re hitting all the right notes and telling a story that your guests will enjoy. Your coach can make changes to your listing before it goes public, look over your images, and offer suggestions. They will ensure that your listing is fully optimized and appealing to guests!

Conclusion

If you’ve ever considered renting out your home on Airbnb, you know how difficult it is to market your property. Overpricing your home will significantly reduce the number of bookings. The vast majority of your competitors will undercut your prices and steal all of your clients. So the cost is low, right? If you price it too low, you’ll be leaving money on the table, not generating enough sales to cover expenses, and eventually being unprofitable.
So, what should you do? There’s no need to worry since Airbtics provides historical, current, and anticipated rental data. You can also calculate your Airbnb revenue using the Airbnb investment calculator by multiplying your daily rate by the year-round occupancy rate.

Refrences| Airbnb.co

🎉 FREE WEBINAR - July 24th, 11am / 8pm CET - Learn Airbtics in 7 Minutes - Revenue and Market Analysis Tips and Best Practices!

Variable Rate Mortgages

Fixed Rate Mortgages

Capped Rate Mortgages

Interest Only Mortgages

How to apply for a mortgage in France?

1. Mortgage Application

2. Mortgage Agreement

3. Notary Procedure

How do mortgages work in France?

Costs of Investment Property

TOTAL EXPENSES & TAXES

What is a good cash return / net rental yield?

Fixed rate

Variable rate

Mixed rate

Constant variable rate installment

How to apply for a mortgage in Italy?

1. Mortgage Application

2. The Preliminary Feasibility opinion

How do Italian mortgages work?

Costs of Investment Property

UPFRONT COSTS:

1. Agency Fees

2. Notary Fees

3. IVA (Value Added Tax)

ONGOING COSTS:

1. IMU Municipal Property Tax (Imposta Municipale)

2. TASI Indivisible Services Tax (Tassa sui Servizi Indivisibili)

3. Home insurance

What is a good cash return/net rental yield?

Variable-rate Mortgages

Fixed-rate Mortgages

Mixed-interest-rate Mortgages

Interest-only mortgages

Non-euro mortgages

Spanish mortgages for seniors

How to apply for a Spanish mortgage?

How does Spanish mortgage work?

Costs of Investment Property

UPFRONT COSTS:

1. Stamp Duty (Impuesto Sobre Actos Juridicos Documentados: AJD)

2. Notary’s Office (Tariffs)

3. Land Registry Fees

4. Sales-related Taxes

ONGOING COSTS:

TOTAL EXPENSES & TAXES

What is a good cash return / net rental yield?

Repayment mortgages

Interest only mortgages

Fixed rate mortgages

Variable rate mortgages

How does a first-time buyer mortgage work?

How does Buy to let mortgage work?

Cost of Investment Property

UPFRONT COSTS:

ONGOING COSTS:

LEGAL FEES:

Timeline to Purchase a Property in the UK

1. Getting a mortgage Agreement in Principle (AIP) – 24 hours

2. Searching for the Right Property– 4 weeks to 8 months

3. Submitting & Approval– 1 day to 2 weeks

4. Setting up your Mortgage– 2 to 8 weeks

5. Conveyancing – 4 to 12 weeks

6. Exchanging of contracts– 2 to 3 weeks

7. Completion date– 2 weeks

Where to find properties for sale?

• Drive around your preferred area

• Reach out to UK-based estate agents

• Look at the best property websites

What is a good cash return / net rental yield?

Frequently Asked Questions about Airbnb Investment:

1. How do you start an Airbnb investment?

2. What are the requirements, taxes, and other legal considerations?

3. Where is Airbnb most profitable?

4. What are the Airbnb investment key metrics?

5. How much money does it take to invest in an Airbnb?

6. What are the pros and cons of long term rental vs short term rental?

7. How do you price an Airbnb rental?

8. How much do Airbnb hosts earn annually?