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and a more favourable rental return when compared to the South African alternative .
The final lesson to consider is the flexibility offered by UK banks when it comes to property financing . UK banks often provide mortgage options that include an interest-only portion for a duration of 5 to 7 years within the overall 25-year mortgage term . This feature can be advantageous for property investors as it allows them to maximize the returns for buy to let properties .
Using the interest-only option for your UK property investment can change the financial picture significantly . Instead of a monthly shortfall of R504 , you would have a positive return of R6,200 per month . This interest-only
approach is highly recommended in the UK , especially for buy-tolet property investments . It allows you to optimize your cash flow , particularly if you plan to hold the investment for a shorter period to realize capital growth .
Another noteworthy benefit is that UK banks do not discriminate based on age when considering mortgage applications . Instead , they primarily assess the merits of the property being purchased rather than solely relying on an individual ' s personal financial situation . This means that you can potentially secure a mortgage in the UK even later in life if the property investment itself is deemed financially sound . Such flexibility can be a valuable factor to consider when exploring property
133 SEPT / OCT 2023 SA Real Estate Investor Magazine