Tags
Latest Articles
2010 Articles
Are you looking to build a pension pot for your future?
'The wealth management world is more unsettled than ever, where when and how should clients money be invested. However amidst the uncertainty is 'real opportunity'. The various investments that clients can invest in has never been so varied. These range from the very 'safe' to the outrageously risky'. The answer to what clients invest in depends on what they wish to achieve. Experience shows that a broad and extensive porfolio stands you in good stead. The aim is to not only position clients tax efficently but allow them access to investment monies as and when required.
Property investment has gone through turbulent times. Is there more to come? I would suspect so. However with the right assistance and expertise the once 'taboo' investments should now be welcomed back in the fold. Certain areas and properties have escaped the wrath of the recession. Going forward by selecting the 'right' property real returns are for the taking.
The reality of looking after clients money is not to be overly concerned with labels, i.e pensions, investments, property but the single objective of creating wealth. Wealth creation naturally leads to choices and flexibilty, thus allowing clients to enjoy their monies in the way they see fit.
Property should definitely be one of the asset classes in any portfolio.'
Wealth managment expert.
Tara says '
Although prices have fallen in some locations over the past couple of years, what matters is not just the potential for capital growth but the amount of rental income a buy-to-let property produces. Rental yield (income) is very important, especially in an uncertain market as it enables the investor to hold for long-term capital growth.
Tags: Property(1) Pensions(1)Calling all professional prospective tenants.....
Thinking of letting your property?
If you think that letting your property might be the answer to your problems, then make sure you know your market!
It might seem like the ideal solution if you’re having trouble selling your property, but prospective tenants are fussier than they used to be, and if the house or flat isn’t up to the standards they are looking for, you could be left with an empty property and no potential income from it.
What are Potential Tenants looking for?
The main factors that will influence whether your property is suitable for being let is its location, the type of property it is, and the physical condition it’s in.
If you’re lucky enough to own a large house with several bedrooms, close to transport links and local universities/colleges, you could have a ready-made income from the student market. What are the selling points of the property – how close is it to local shops and leisure facilities?
You might find that in your area family homes are really sought after – or commuter-friendly one bedroom flats could be at a premium. So it is a good idea to speak with a couple of agents who specialise in the area your property is in. They will tell you firsthand what the demand is.
Is your property in the centre of busy commuter village easily accessible to the city? If so the chances are this will be an area which is popular with professionals, and there will be lots of similar properties on the market. Your property therefore has to be a very good standard suitable for this market.
What is the condition of your property?
People won’t settle for badly kept properties any more – there’s too much competition in the rental market. Tenants are usually looking for a property with, at the very least, a clean modern bathroom and a fitted kitchen.
When it comes to the fixtures and the decor, don’t cut corners. Try and get higher quality appliances, and bathroom fitting, and make sure that the property looks good when you show people around. Redecorate in neutral colours and replace any tatty carpets or curtains.
These little details may seem insignificant but they will make the world of difference to a potential tenant. Remember that it’s not like selling a house where people can see the potential to ‘do up’ a property – as tenants rather than owners they will have to live with those carpets or that wallpaper and if they hate it, they will pass.
Prospective tenant like to see the finished article, they don't want to imagine what the property will be like when it's finished! You will miss out on many opportunities to let your property if it isn’t ready!
Is it suitable for the student market?
Letting out your house to students has long been seen as a good but-to-let investment idea, and it’s always going to be a popular way of making money from rental. If you live in a town or city with a thriving student population (Manchester for example), it could be a way to make some significant money from your property.
To be able to let your house to students you’ll need to be in an area that’s popular with the student population, the areas that attract them are usually close to the universities and colleges themselves, and within easy reach of all the local amenities (and pubs).
City centres are also very popular with students, with purpose built university apartments now being offered with en suite facilities, and now much more affordable. With this in mind, if your property is a traditional property and not a new-build, then these in particular have to be of a very good standard. Students expect a lot more these days, any property which is in disrepair or shabby will not let! You have to go make sure it is appealing with up to date appliances, WIFI connections and even SKY TV packages.
There is also a huge amount of legislation covering the student property market, and if your property is over 4 beds then it must adhere to HMO legislation. RM can is expert in this field and can advise you in depth.
Tags: Landlords(8) Investment(10)How to choose a letting agent?
When I started investing in the late 1990's, I was lucky enough to be working in a letting agency, where I had all the expertise and knowledge to hand. During this time I saw many Landlords turn to us once the novelty of managing their property had worn off; in particular after the first instance of their tenants calling in the middle of the night!
It is still true today that the majority of new Landlords whether it is an accidental or a planned investment strategy, choose to manage the first property themselves. They think they would rather save themselves the fee, believing that agents don't work hard enough for their money. This may be true of some agents, but the good ones work very hard indeed! With all the possible pitfalls, and new legislation to keep abreast of, it makes financial sense to hand the job to professionals.
Here are some pointers to guide you when looking for a good agent, and some things to consider....
1. Do you have a recommendation? Do you know someone who has had a positive experience to report, and then a recommendation is an excellent way of beginning the search.
2. Is the letting agent proactive? The best of letting agents will always be proactive in everything they do, from advertising to inspection. How to tell if they are proactive? Put them on the spot; ask them to outline how they ensure that your property is being looked after by the tenants. Do they check on the property at regular intervals, as this is very important! Tenants, who know that they will be checked upon, will make an effort to look after the property. Does the agent keep in touch with the tenant (not just when the rent is overdue!). Tenants, who don't clean their property, have problems bringing it up to the condition they took it when it is time to move out!)
3. Other points to take into consideration are, how much is the letting agent charging, and what for exactly? Do you think you are going to get value for money and the best possible service? Do you think you will be able to get on with the agent? Good relations with your agent are important. What level of service are they offering you?
4. Ask the agent to provide contact names and telephone numbers of their current clients; the agent will need to get permission, but if they have a good working relationship with the client this will not be a problem. Current clients will be more than happy to give the full story behind the service they receive.
Questions to ask the client: a. How many void periods have you experienced? b. Do you receive your rent pay out in a timely fashion on a set day each month? c. Is the cost of your repairs good value?
5. Does the agent appear to be a stickler for the Law? All properties require an EPC (energy efficiency certificate) prior to being advertised. They must also have a current Gas Safety certificate and a PAT test (Electrical Appliance Test). Is your furniture fire safe?
6. Is your agent associated with one of the professional lettings bodies for example 'The Property Ombudsman'? www.tpos.co.uk
7. Does the agent have Professional Indemnity Insurance? This is important you need to know that this is in place in case of any recourse.
8. Finally, do you need to go with a high street agent? No not necessarily, exceptional service does not start with a shop front. As long as the agent uses the majority of the large advertising property portals, and has a proven track record of letting your type of property, with happy clients; then these are the important factors.
You will also find that non high street agents have fewer overheads and will pass these savings on to you! You may also find that you receive a more tailored service, and smaller agents will be far more committed to their clients.
Railton-Meeks are of course biased, but we have been servicing very happy Landlords for many years. Our clients feel they receive the best service out there. One very important point – when our clients want to see us, we pay them a house visit, no more parking problems on the high street!!
Tags: Landlords(8) Letting Agents(1) Property Mangement(1) Landlords(8)Global House Prices Report 2010
North America – snail’s pace recovery, declining home sales
US house prices fell 3.31% over the year to Q2 2010 (FHFA figures), but rose in the last quarter by 0.42% (seasonally and inflation-adjusted)—the first quarterly increase since Q2 2009, and the highest since 2007.
However, the American housing market is braced for a possible fall next quarter. Existing home sales slumped to 3.83 million units in July 2010...
To read more click the link below:
http://www.thepublishinggroup.co.uk/Global_house_price_report.pdf
Tags: Global House Prices 2010(1)There are definite signs to look out for to help identify an improving market.
There is nothing new about recessions – they have been with us since time immemorial. They form part of what is termed the ‘economic cycle’ – periods of growth and decline which have happened throughout history. These have an effect on all markets and industries including property.
A successful property investing strategy involves buying at the bottom of the cycle, and therefore maximising the financial return. But how does an investor identify this critical moment which determines success or failure for the property investor?
Most economists agree that the economic cycle consists of five distinct stages, each of which flows into the next. These are defined as the peak, contraction, recession, recovery and prosperity. At the peak of a boom property is considered to be overvalued. Credit providers are heavily burdened with debt. As the contraction stage starts, sources of credit dry up, and property sales grind inevitably to a halt. The price of property and shares is at a low ebb and credit is difficult, if not impossible, to obtain. Recovery commences when credit facilities again become available. At this point institutional investors become involved in the market, moving rapidly to purchase undervalued property and shares. The next stage is prosperity. Prices rise once more, the workforce’s salaries rise and credit providers become more amenable to risk.
So when was the last time we experienced this economic cycle? The last significant correction in the UK housing market occurred in 1991. At that time, banks and other lenders frequently offered 100% mortgages – yes, I know it’s hard to believe but it really did happen. This more-than-generous financing fed the strong desire to own property which inevitably led to the peak of the housing ‘bubble’. But as the economy slowed a total of 75,540 repossessions followed, partly due to the burden of sub-prime debt – does that sound familiar? This represented the highest recorded in any one year (so far) and spelt obvious heartbreak and misery to those concerned. The market did not seriously begin to recover until 1994. At that time the UK economy was registering 4.2% GDP growth, the highest level for six years. The sustained economic growth, combined with rising incomes, meant people could afford larger mortgages. Consequently, demand for housing rose.
Most people view property as essentially a stable asset, despite the peaks and troughs that occur at the various stages of the economic cycle. Unlike investment in shares, a property owner has a tangible asset of bricks and mortar. A constantly expanding population will always need somewhere to live, and therefore there will always be demand.
Knowledge of economic cycles and the property market means one can begin to predict the upswing in a market. The current financial crisis has strong parallels with that of the 1991 crash. The beginning can be traced to early 2007, when the total value of sub prime mortgages was estimated at US$1.3 trillion. Rising property values resulted in lenders taking more risks. The number of credit providers began to collapse under the weight of defaulted loans, with the most notable example being the once mighty Lehman Brothers. The scale of the problem was becoming horribly clear. As the flow of credit between banks dried up, the knock on effect included reduced lending to consumers and thus a slowdown in the housing market. Once interest rates are low enough, credit flow becomes liquid once again. At this point institutional investors enter the market, confidence returns and the upswing begins.
Usually upswings begin in the same place the downturn began. The US housing market is therefore key – as soon as it begins to pick up then it can be seen as a sign for the rest of the world. Standard & Poor, the ratings and analytical company who produce the US Case-Schiller housing index, stated in that in 2009 property would reach the bottom of the cycle.However it is clear that the US housing market has not started to recover in all of the US States. For example Florida houses prices are still going down 12 months after this statement was made.
The UK now has the Coalition goverment, Cameron and Osborne have announced the wide spread cuts to be made to the public sector; and there is certain to be increased localised unemployment. However if one is to listen to the media then we are heading back to a dip in house prices. Maybe.... however one thing is for sure, rents are rising, and if Cameron & Osborne can get the banks lending properly again, then give it 12 months and we could be on the recovery end of the sectrum once again.
Tags: Investment(10) Property Cycle(1)Gearing up and saving on tax.
'Gear up' & save tax
I was chatting to tax expert about various ways landlords can save paying tax on their buy-to-let properties.He highlighted one aspect that many landlords may not of considered. This technique is particularly useful for landlords who are earning considerable amounts of rental income and are also fortunate to receive a high personal income taking them into the top rate tax bracket.
To save money a landlord needs to 'gear up.'
This means borrowing money against their residential investment property and thereby instantly increasing the amount of expenses incurred on their rental property.
They then should invest in a tax free income generating investment. When interest rates rise significantly they can then use their funds to repay their new outstanding buy-to-let mortgages. What a landlord should ensure is that the buy-to-let mortgage they opt for has low set up fees and a competitive interest rate.
Low interest rates appear to be one of the lynch pins of the Coalitions economic policies meaning that many landlords will make considerable rental profits for several years to come.
Therefore landlords looking to minimise their tax burden should consider gearing up. There will probably be financial costs with setting up the initial loans but this could be small compared to the potential tax savings.
Tags: Gearing up(1) Tax(1) Buy-to-let(2)
Is this the end of the 'Interest-only mortgage...'?
MOVES to tackle reckless bank lending could shatter the home owning dreams of millions of Britons and trigger a slump in house prices.
That’s the damning verdict of industry body the Council of Mortgage Lenders in a scathing attack on City watchdog the Financial Services Authority yesterday.
The FSA sparked controversy by planning to scrap interest-only mortgages, slow the application process and effectively cap how much people can borrow from next year.
Michael Coogan, CML director general, accused the FSA of overstepping the mark, with implications for generations to come.
“The golden age of home ownership is over for the moment”, he said, with the credit crunch already leading to a sharp drop in lending.
And he warned this mortgage famine could become permanent under the FSA’s “fatally flawed” plans which would “stifle innovation and opportunity”.
Read more: http://www.mirror.co.uk/news/city-news/2010/09/23/mortgage-lenders-declare-golden-age-of-home-ownership-over-115875-22580876/#ixzz10IA9i5Aj
DO YOU OWN MORE THAN THREE INVESTMENT PROPERTIES........?
The largest lender in the buy-to-let market, the Lloyds Group which includes the brands Birmingham Midshires, Cheltenham & Gloucester, Halifax, Bank of Scotland & Lloyds has just announced from 24 September, next Friday, that they will be reducing the number of properties they will lend on from nine to three.
This means that if you have 3 or more mortgages within the Lloyds Group you will no longer be able to use them to purchase properties. Currently the Lloyd’s Group has the best buy-to-let interest rates which require a 25% deposit.
This is a massive change to the mortgage market and any investor looking to purchase this year with 3 or more properties within the Lloyds Group should consider purchasing NOW.
If you wish to expand your property portfolio, call Tara on 016 448 2154
Tags: Investment(10) Properties(2) Buy-to-let(2) Lloyds Group(1)
