No one is born a property investment expert, so why is property investment made more intimidating than it should be with endless acronyms? This blog is a simple guide to debunking some of the jargon used in property investment.
Here are the most commonly used:
BTL = Buy to let
No, BTL is not a confused sandwich but the most commonly used abbreviation in property investment. It is often used in text rather than conversation. BTL stands for ‘buy to let’ which simply means buying a property with the intention to let it out.
LTV = Loan to Value
Loan to value relates to mortgages. In simple terms it’s the loan amount you take against the purchase price. For example if your property cost £100k and you took out a mortgage for £75k, the loan to value (LTV) would be 75%.
DIP = Decision in principle
This is also related to mortgages. When you initially apply for a mortgage, the mortgage company will carry out a fact find, this is to establish whether they are willing to lend to you. Although the DIP is not a mortgage offer it’s the next best thing as it shows the lender is willing to lend to you based on the information you have provided.
ROI = Return on investment
This is the best way to assess any property investment. Not only is Return on Investment a great way to compare property deals against each other it is also a great way to compare property against other types of investment.
GSOH = Good sense of humour
Always a bonus when investing in property and trait highly appreciated by our friendly team!