Buy-to-let back in business?

That's the claim from one CEO of a property marketing company. He urges investors to take advantage of lower house prices and increasing rental prices.

As prices in the UK's residential property market appear to be bottoming out, James Davis, founder and CEO of Upad.co.uk, the UK's marketplace for property rental, believes the time is ripe for would-be buy-to-let landlords. He comments:

“The recession's detrimental effect on the housing market has resulted in people losing their faith in property as an investment. In contrast, the readjustment of prices makes this a good time to put money into residential lets.

“There are also signs that rental prices are on the increase – which means that investing in property makes sense both from the perspective of ongoing income and also long-term capital growth.


Davis also refers to those people finding it harder than ever to get onto the property ladder. He adds: “For every one percent increase in incomes, there is an even greater increase in house prices, so more and more people are struggling to buy their first property. Rental demand therefore has the potential to increase at an exponential rate.” But, he also issues a word of warning:

“Those looking to become a landlord shouldn’t be complacent. They need to approach and treat this like a business. That means having a business plan, setting budgets, and not seeing it as a 'get rich quick' scheme. They also need to make sure that the 'product' they are offering is fit for purpose – today’s tenants are demanding higher standards in properties than ever before.”

Davis also advises potential landlords to take into account the effect of the banking industry's pessimism. Mortgage lenders are asking for 20-30% deposits on rental properties, double the 10-15% typically required a year ago. Valuers are also likely to err on the side of caution, so people hoping to buy-to-let will help their case if they research how much similar properties in the area have sold for recently. Being armed with data will also help argue the case with lenders, and illustrate that this is a serious business proposition.

When it comes to selecting a property Davis says: “Potential landlords should make sure they select the right properties in the right areas – it is too easy to let personal taste influence choice, and then find that it is difficult to rent out because it won’t meet rental demand.

“Having bought the right property, it is important to avoid void periods by ensuring that it is marketed properly. And once it is rented to suitable tenants, the best policy is often to work with them to make it appealing, and to increase the length of their tenancy.”

Upad.co.uk launched in October 2008, enabling landlords to advertise each property for a one-off cost of £59. The service then became available to the 1.5 million landlords across the UK in May 2009.

A little cost – a lot of value!

The experts at Belvoir explore the benefits of using a property management agent...

Anyone who’s been a landlord knows that letting out your property can be a maze of legal pitfalls and time-consuming challenges - but a good property management agent can help steer you in the right direction!

Even though the level of service offered by each property management agency can differ, if you opt for an agent to take on your property on a full-management basis they are likely to be able to save you time and money, as well as help protect your asset and overcome problematic tenancies too.

Craig Walker, Proprietor of Belvoir Camberley, explains the financial benefits of using a property management agent. “Placing your property with a good letting agent will mean that higher rental rates may be achieved, rent arrears will be dealt with quickly and efficiently and there is likely to be fewer void periods between tenancies,” he says. “Plus, a property management agent will usually have access to specialist insurances.”

During the tenancy, some agents may even be able to help you make further savings by negotiating favourable maintenance contracts or lower call outs charges on any maintenance work or emergency repairs that are needed...

Wayne Mearns, Proprietor of Belvoir Southend-on-Sea says, “When it comes to repairs it takes time and money for a landlord to find a contractor they can trust and there’s also a cost associated with the work done. Good agents should have tried and tested contractors that charge reasonable fees for good work.”

And, if the tenant has any questions or problems during the tenancy, a property management agent will try and solve them on your behalf. Some agents offer a 24/7 service for tenants while others have their own arrangements… but, the vital point is that you, as a landlord, won’t be getting the call.

“Landlords should also consider the costs of their time,” explains Wayne Mearns. “There are work costs, social costs and also telephone costs to contractors and tenants to consider. In fact, the demand from tenants can be huge with some calls from tenants asking for things such as light bulbs to be replaced - the agent can soak up calls like this allowing the landlord to relax and not worry about anything.”

Craig Walker agrees that an agent can deal with many of the issues a private landlord would have to do themselves and adds, “Agents will deal with problems such as rent arrears, maintenance issues, contract issues and emergency plumbing issues on your behalf.”

As well as helping you save money and time, a good property management agent will also be a valuable source of information throughout the tenancy. A good agent will keep up-to-date with changing legislation and should be able to advise you about which properties to invest in, organise your lease agreement and deal with tenants’ deposits on your behalf.

And, if the worst happens and a good tenancy turns bad it’s invaluable to have an expert on hand...

“The number of late and unpaid rents is on the rise leading to defaults and increased evictions,” warns Rick Flay, Proprietor of Belvoir Sheffield and Chesterfield. “Landlords should use an agent to credit and reference check all tenants before signing as it can reduce the risk of a getting a bad tenant and save them thousands in lost rent and eviction costs.”

Wayne Mearns, adds, “The know-how from a specialist is key to dispatch problem tenants from a property as the agent knows the procedure and what it takes to recover the property or solve the problem. The stress on the landlord is immense so why risk doing things the cheap way when it may cost more in the long run.”

Saving you money... saving you time...
A good property management agent, who has taken on your property on a full-management basis, is likely to do many of the following on your behalf…

√ Finding tenants
√ Marketing the property
√ Arranging viewings
√ Organising specialist insurances
√ Advising on which properties to invest in
√ Taking inventories
√ Negotiating the best rental rates
√ Organising repairs
√ Chasing rent arrears
√ Helping to evict ‘bad’ tenants, if necessary
√ Taking promotional photographs
√ Organising a lease agreement
√ Dealing with tenants’ deposits and the administration needed if retention is required due to damages
√ Dealing with legalities and regulations
√ Keeping you up-to-date with changes in legislation
√ Performing credit checks and handling references

• Belvoir Lettings now have more than 140 offices nationwide. To find your nearest Belvoir office, visit their website at http://www.belvoirlettings.com/

Free property management software, Free tenancy agreements

Belvoir rental index shows significant rise

Figures released by Belvoir, one of the UK’s largest independent specialist lettings agencies, reveal a rise in rental figures for the first time this year.

“Belvoir has over 140 franchises nationwide and the Belvoir rental index figures for August 2009 show there has been a small but significant upturn in rental figures,” says Mike Goddard, CEO of Belvoir. “There was a 0.8% rise on a month by month basis, which equates to a 10% annual increase. After months of slow decline in rents, totalling about 6%, the trend now appears to have reversed and we are cautiously optimistic that this signifies the end of the ‘reluctant landlord’ and a return to normality in the rental market.”

Free property management software, Free tenancy agreements

How to avoid property tax

How to Avoid Property Tax

by Carl Bayley

This guide is essential annual reading for ALL property investors and landlords. If you are making healthy rental profits it is vital to claim every tax deduction you can. How to Avoid Property Tax will help you pay much less income tax, capital gains tax and other taxes.

Landlord insurance - CHEAPEST RATES - professional service

Subjects covered include:

* All the changes from the April 2009 Budget.
* How couples can save an extra £10,000 income tax this year
* ...and over £22,000 every year from 2010/11.
* How to delay paying tax on rental income by up to 2 years.
* The new tax rules for UK and overseas holiday lets.
* How to get the taxman to pay your travel costs (flights, hotels,restaurants).
* How to get a tax refund of £40,000 when you buy commercial property.
* How to write off new kitchens and bathrooms as repairs and get the taxman to pay 40%.
* Motoring costs you can claim if you are a property investor.
* How to make the mortgage on your home tax deductible by borrowing against your buy-to-let properties to pay it off.
* How to claim tax relief for mortgage interest even if the money is used for personal reasons.
* How re-mortgaging property can save you thousands in tax.
* How to transfer property and avoid capital gains tax.
* How to use a trust to get extra tax-free capital growth on residential property.
* How couples can pay capital gains tax at just 10% on £2 million of capital gains.
* Ways to avoid capital gains tax even if a property is not your main residence.
* How to use your spouse or children to save £1,000s in capital gains tax.
* ...Plus lots and lots more.

Free property management software, Free tenancy agreements

BTL MORTGAGE PRODUCT PICK

A recap of the best 75% deals at the moment we have:
BM Solutions
Interest rate: 4.35%
LTV: 75%
Product Detail: 1 year tracker
Arrangement Fee: 3%
Early Redemption Penalties: 3% in first year.
Our thoughts: The lowest rental cover for 75% loan to value mortgages but watch the reversionary rate after the first year
Platform
Interest rate: 5.79%
LTV: 60%
Product Detail: Fixed until 01/12/2012
Arrangement Fee: £1495
Early Redemption Penalties: 5% until 01/12/2012
Our thoughts: For high value properties the set arrangement fee makes it very competitive.
Lender spotlight Natwest
There are some interesting niches to Natwests buy to let mortgage products which we would like to share with you:

75% LTV

No Minimum income required

Second residential assessment if rental doesnt fit. (One property only)

This means that if you have a property where the rental is short OR because of the state of the property means rent is restricted, then they can use your income to cover the shortfall.

BTL rental calc 6.75% @ 125%

First Time Buyers accepted (Subject to affordability. Proof of income will be required)

Student Lets as long as they are on one AST, they will accept up to 5 students.

Developer landlord - bags a brace at Highbury

Landlords who may have read my recent blog about investing in a bit of football heritage may be interested about the word on the street is that a big institutional buyer is buying 146 units at a 27% discount to their individual market price.

Landlord Insurance - professional rates - discounted

London & Stamford has bought the block in the former North stand from Highbury Holdings for £41.4m equivalent to £400/sq ft. The market value of the units is thought to be nearer £550/sq ft.

At the purchase price the investment is thought to give a gross yield of about 7% - pretty good for central London.

The company founded by legendary property men Raymond Mould and Patrick Vaughan are known throughout the industry for picking up bargains and selling out at the top of the market.

I'm hoping this proves the case as I've got a small holding of London & Stamford AIM listed shares in my pension.

The purchase by London & Stamford adds weight to those that think residential prices may have bottomed and also indicates that for bulk purchases its still possible to negotiate big discounts.

Free property management software, Free tenancy agreements