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Thinking of letting your property?

November 1st, 2010

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.

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Global House Prices Report 2010

November 1st, 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

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Gearing up and saving on tax.

October 8th, 2010

‘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.§

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Is this the end of the ‘Interest-only mortgage…’?

September 22nd, 2010

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

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DO YOU OWN MORE THAN THREE INVESTMENT PROPERTIES……..?

September 20th, 2010

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

tmeeks@railtonmeeks.co.uk

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