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As a property investor, you could use your inheritance money to expand your portfolio. This is also a great way to start a property investment journey for those looking to get a foot on the property ladder.

Why invest in property?

Knowing what to do with the money can be challenging if you have come into an inheritance. If you haven’t already, one option would be to consider expanding your portfolio. Deemed a worthy long-term investment by many, there are still some factors to consider fully before taking your first steps.


Property as a long-term investment

It’s typically recognised that property should be regarded as a mid to long-term investment, partly due to the initial costs associated with buying a property. With property values tending to (in the majority of cases) increase at a relatively slow and steady pace, you should view seeing profit gains as a three to five-year plan as a minimum.

The exception to this would be a refurbishment project, where you acquire a property that requires work, renovate it and then sell it on to make a profit.


Can inheritance money be used as a deposit for property?

Yes! Lenders will do due diligence to check where the money came from, but inheritance is an accepted and common deposit source for buy to let property.


What is your appetite for risk?

Property has historically been regarded as a safe option for investing money. Recent data (as of December 2023) revealed that the average property price is now £284,691, and the trajectory for the market is that prices are expected to slow in growth, but not fall. As with any investment, house prices can go up and down, so returns are not guaranteed.

If you are thinking about becoming a landlord, it’s also worth considering how you will cover the costs of running a buy to let, for example, repairs and maintenance, void periods, etc. While the expectation is that rent will ultimately pay for the mortgage, it’s worth ensuring you have enough money set aside to cover any unexpected bills.


What to look out for

Choosing the right property is paramount, so it’s imperative that you do your research, especially if you’re new to the industry. You need to be sure that there is sufficient tenant demand in the area and that there is nothing which could adversely affect your property in the future – for example, a planned build for a pub next door.

You will also need to calculate:

  • How much rent is the property likely to achieve?
  • Is this getting you the return you need?
  • How much tax will you pay?
  • Will your expenses be covered?


Will you need a mortgage?

You may have enough inheritance to buy a property outright, which is a fantastic situation to be in. However, if the sums add up, you may want to consider splitting your money across one or two properties to increase your returns. If you do need to take a mortgage to help fund your purchase, do get in contact with a specialist mortgage broker.

Get in touch

At MFB, we can advise you on all the possible finance options available to you to start your investment journey. We are always happy to run through numbers and calculate how much your mortgage costs will be, and see how they fit into your investment plan.

If you are looking to invest your inheritance into property, or generally looking for a mortgage, do get in touch to discuss your finance options. You can call us on 0345 345 6788

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