After withdrawing from the market the Shepshed BS has made a welcomed return to the buy-to-let mortgage market with several new buy-to-let mortgage products including: a new 2 year tracker rate of 4.95% above based or 5.45% , a standard variable mortgage of 5.54% and a 2 year fixed rate of 5.95%.A recent news item stated that many landlords are experiencing difficulties with their tenants falling behind with their rent, so perhaps an item about raising rents, doesn't seem appropriate at this time., however;
REMEMBER: You are a landlord and letting property is your “business”. This means that you should be making a profitable income from your property both from a rental cash flow perspective and from a capital gain perspective.
Make sure that you are charging comparable market rents for your property and don’t be afraid to put up the rent, regardless of how good the tenant is. If a tenant has stuck with you then it is for a reason, the most probable one being that you are offering good value for money, or they can't or don't want to go anywhere else.
But make sure that you give your tenants plenty of notice before any rent increase is set and explain your reasons for increasing the rent.
Officially write to the tenant and tell them what the rental market value for this kind of property is, and give some comparisons in the area. Also, remind them of the high value service that you provide so that they see that they are getting exceptional value for their money even after the rent increase. And if you have carried out any refurbishment or repairs, remind them of what you did for them.
Whislt we're loosely on the subject of people struggling to pay bills, I'd just like to say a big thank you to any landlords who told their tenants about our offer of re-claiming bank charges. We had a tremendous response to that item and have got the ball rolling for several dozen people.. But we are still able to offer the service until the end of July, so if you'd like to a reminder of what we are offering, look at my previous blog on the subject or give me a ring on 0754 5764 983.
And one last thing, we have the new product ready for “Commercial Property Owners”. But I'll tell you more about it at the end of this week or early next.
In fact I'm going to tell you more about it later today....BUT it's only for Commercial Property Owners, so promise you won't read it!
Her response is that she thinks it's working well.
"Despite landlords' initial fears, there is overwhelming evidence that customers have responded extremely well to the responsibility of managing their rent payments. Evidence from the evaluation has shown that customers regard paying the rent as a matter of prime importance and that most would prioritise this above all other payments. 84 per cent. of tenants are successfully managing their own housing benefit. Of the remaining 16 per cent. only a third are having their housing benefit paid to the landlord because they have fallen into arrears of eight weeks or more. Two-thirds are having their benefit paid to the landlords because the local authority, working together with landlords, has identified that they might not be able manage their rent payments. "
What do landlords think, would you agree?
This 'twitter' on property prices is endless, listen to further deafening speculations.
I recently saw this article relating to the need to require planning permission for a tree house. This got me thinking. I'm always keen to sweat my property assets and maximise my income from my property. So could this be a new way for landlords to branch out.
Yields are hitting shockingly low levels on rental property, however they still exceed the returns on offer from the majority of alternative savings options. However it is still worrying times for landlords whose business model is based on getting 'x' in to pay 'y' to create the return of 'z'.
Maybe it would be more relaxing if the money was in the bank and not bricks and mortar?
Landlords with rental properties in prime central London have seen their return slip below 4 per cent for the first time in nearly two years, according to the latest data from Knight Frank, the estate agent. - Read the full article in the FT
The more people I speak to, the more I'm convinced that the majority of investors have not set up their existing life cover in the most efficient way.
In many cases it could mean GB walks away with 40% of it.
The answer is really simple - consider putting your life cover in trust.
1. Quicker payment of claims. If someone dies and their plan is not in a trust, their representatives will have to obtain Grant of Representation before they can deal with the plan. This can take several months.
2. The plan proceeds may be free of inheritance tax.
3. At the moment, inheritance tax is payable at 40% on any part of an estate valued over £325,000 (2009/2010). But you can use a trust to gift some (or all) of the benefits on the plan to other people. The gifted benefits would no longer be part of your client’s estate if they die, which means these benefits would not be subject to inheritance tax.
If you do have life cover remember this - every month a payment is coming out of your bank account - make sure you it counts!
01424 205 373 ref PropertyHawk for No Fees Special Deal
There has been one good news story this week for those looking for some more sunshine in their lives.Nationwide published figures that show the average price of property rose by a (seasonally adjusted) 0.9%. The three month trend is now positive for the first time since December 2007
In fact, one of our local estate agents said to me this morning that the “credit crunch” was over for him, but then again if you are looking for optimism then that’s the best place to start.
Here at Resident Broker we are still quite cautious - as we've said many times before, lending isn’t going to dramatically increase anytime soon - in fact, the next challenge will be how to deal with rising interest rates (and hence mortgage rates) and we believe expert advice will be ever more important.Here’s a couple of buy to let mortgages for you:
BM Solutions (still here) - Interest rate: 4.7% - LTV: 75%
Product Detail: 2 year tracker at 125% rental calculation (base rate + 4.2%)
Arrangement Fee: 3% - Early Redemption Penalties: 3% in first 2 years.
Our thoughts: The lowest rental cover for 75% loan to value mortgages therefore good for low rental properties, and BM are still the most efficient and quickest. Remember, you can only have a total of 9 properties within the Lloyds Group.
Please note: Not for the faint hearted – should Bank of England base rate significantly increase, then so will your rate.
National Counties - Interest rate: 5.89% - LTV: 60%
Product Detail: Fixed until 31/05/2014 - Arrangement Fee: £2495 - Early Redemption Penalties: 5% until 31/05/2010, 4% until 31/05/2011, 3%until 31/05/2012, 2% until 31/05/2013, 1% until 31/05/2014
Our thoughts: This is a great 5 year fixed rate remortgage deal. For higher value loans it also benefits from a set arrangement fee.
01424 205 373 ref PropertyHawk for No Fees Special Deal
We spoke last week about the discounts that Advantage were offering existing clients if they can move away. We have diligently been working with our investors over the last week on this and what I'm going to tell you now has already saved people thousands:
If you get an offer from Advantage call us first before accepting it.
In fact, dont take our word for it, have a look at what one of our clients says
http://propertytribes.ning.com/forum/topics/just-saved-myself-potentially
Give us a call, and we will explain how we can help Advantage and you come to a compromise agreement so you can remortgage.
01424 205 373 ref PropertyHawk for No Fees Special Deal
I was discussing a problem with one of my clients last week about finding the ideal tenant and we came up with this list.
We think in these turbulent times you need to look for tenants who have recession proof jobs. So who are these prized tenants? Surprise, surprise, they are all linked to the public sector!
1) Teachers
Don’t forget children still need to go to school during a recession and there will always be somebody there to teach them. In fact an increasing number of adults who have lost their jobs have returned to education until the economic climate improves.
2) Working in the NHS
An economic recession will not mean that less people will need treatment and therefore focusing on doctors, nurses and other medical staff should give you long-term tenants.
3) Public Transport Staff
The government is committed to trying to keep unemployment down and one area that we haven’t seen any redundancies is in the public sector. In fact this sector could grow as the government tries to create more jobs to reduce unemployment.
4) Public Sector Employees
In the past, whenever a recession has occurred the Government allocates more resources in to public sector transport projects. Don’t forget the money being spent on public transport comes from the Government, not the consumer, so again these tend to be safe jobs in a recession. (perhaps you could get some MP's to become your tenants or am I being flippant)
5) Police
Last, but not least we come to our police force! Once again they serve the public and we don’t hear of redundancies in this area!
Can you add to this list?
You may recall that I told you about a little-known tax loophole that you could exploit? Well, I should explain, this will only apply to you if you own COMMERCIAL PROPERTY, or know someone who does. It could be worth hundreds of thousands of £'s to the right person.
I'll let you know more next week, but if you are a commercial property owner/ landlord and would like a pre-publication sneak preview, get in touch by the end of today.
Confucious
Any landlords who wish to know what the government think the costs and benefits of the proposed landlord licence are going to be can see in hard facts and figures in this impact assessment prepared by departmental civil servants.
The Mirror Sport reveals that Eto'o will join mega-rich Manchester City in the next few days. The Cameroon striker has already lined up a £2.5 million pad to live in. Barcelona ace Eto'o is set to move into a Georgian style house in the plush village of Hale owned by cricket ace Flintoff, who is renting out the property for around £20,000-a-month - a fraction of Eto'o's £200,000-aweek wages.
This means it's unlikely that Eto will be needing a FREE tenancy agreement as provided by Property Hawk. This is because his tenancy will be over the £25,000 annual maximum rent allowed under the Assured Shorthold Tenancy regulations.
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