The cost-of-living crisis is still one of the biggest issues we are currently dealing with in the UK. There have been a lot of challenges for everyone when it comes to managing the rising costs. Alongside the ongoing rises in house prices, and the possible price drops (especially after the big rises), people within the property industry are trying to cope.
What Does This Mean for Landlords and Tenants?
Both landlords and tenants who are impacted in various ways are deeply concerned about the cost of living crisis. As a result, there is a feeling of uncertainty in the market. There are still not enough homes available to match the increasing demand for renters in the rental market. As a result, there is still a significant demand for rental property, but rising prices might easily result in renters not paying their rent. This means if you plan to raise rent prices as a landlord, you could put even more strain on the renters who are already struggling under the weight of rising food and fuel costs.
What Steps May a Landlord Take to Safeguard Their Position?
As the cost-of-living crisis looks like it is here to stay for the rest of the year, managing their rising costs now is key to helping landlords. Here are steps they should consider when dealing with this.
Planning and Budgeting
Thoroughly examine your income and expenses. This is so that you can understand the reality of your current condition. Being open and honest about your financial status is the proactive approach to business management. Therefore, start by updating your spreadsheet!
Look for Areas for Improvement
Watch for manoeuvrable areas. Could you obtain a better bargain if you have to buy-to-let mortgages with a fixed rate? This is a good time to negotiate a new fixed rate to prevent future increases in your mortgage payments.
Protect Your Investments by Making Wise Financial Decisions
Given the high cost of energy, it is wise to check your properties and make sure they are well-maintained. Future priority investments include things like new heating or glazing if you’re thinking about making improvements to meet rising EPC standards. Improved insulation will increase the value of your house while also assisting your tenants in lowering their energy costs.
Ensure the Landlord-Tenant Relationship is Protected
The best moment to speak with your tenants is right now. How are they doing, are they going to be in arrears on their rent, and is it possible to raise the rate? In the end, excellent, dependable tenants are a benefit, and you might discover that it is preferable to bargain with your “quality” tenant to find a workable solution rather than terminate the tenancy and fight to find better. After all, it is expensive to find new renters, and there is no income from a vacant home.
Use Care When Hiring
Always check references when seeking new tenants, and if necessary, ask for a reliable guarantor. You want tenants who will pose less of a risk to you and who will pay a reasonable—not necessarily the highest—rent for as long as possible or for as long as you require.
How Can We Help?
If you are looking to manage your cost during this time, do not let your property portfolio be affected. By hiring our team of skilled property managers, we will be able to handle all of your property needs as well as your tenants. Why not talk to our experienced team about how we can help you to manage your portfolio today on 0203 725 8399 or send us an email to info@robertmanning.co.uk.
Have you considered adding an HMO (House in Multiple Occupations) to your property portfolio? If you have a piece of property that you are having issues in finding tenants for, it might be a good idea in turning it into an HMO. HMOs have been becoming very popular in the housing market over the past year. But what are the benefits of turning your piece of property into an HMO? If you are unsure what they are, don’t worry. Here are some of the reasons why you should have HMOs in your rental portfolio today.
Potential for Higher Income
The main attraction of HMOs is that rental yields can be up to 20% higher than for a typical rental property. Each tenant brings in separate income. However, costs are also likely to be higher.
There are a few factors you should consider before looking into HMOs. These include whether you need an HMO licence, the price of carrying out work to make the property compliant and higher maintenance costs due to increased usage and tenant turnover.
These can have an impact on your overall income return, but by managing costs carefully and taking advice from a specialist HMO mortgage broker you’ll give yourself the best chance to maximise your return on investment.
Fewer Rental Income Gaps
Letting each room individually in an HMO property means there’ll be less of an impact on your rental income when a tenant moves out because you’ll still have other tenants renting.
Although there is generally more paperwork with HMOs, careful investigation at the start of each tenancy will mean you can benefit from longer-term occupancy and a steady income stream.
Less Likely to be in Arrears
Having multiple tenants within the same property means you will have multiple streams of income, as each tenant pays rent for their individual room. This is beneficial as you’ll be less exposed if one of the tenants falls behind with their rent.
More Attractive Tax Position
Unlike the majority of single-let properties, you can claim a tax deduction on qualifying items within the communal areas of HMOs.
A proportion of these costs are treated as an expense of the rental business. One advantage of making a capital allowances claim is that if this results in a ‘rental loss’, it can be offset against non-property income and potentially add up to a significant amount.
It’s important to take proper HMO advice from a professional tax specialist in relation to your individual circumstances.
Growing Demand for Flexible, Affordable Housing
The private rented sector accounts for one-fifth of all homes in Great Britain. It’s popular with students, young professionals and single people. It’s expected that the demand for room rentals will grow as people opt for the attractions of community living. HMOs are great for fulfilling needs for flexible, affordable living that reflects a modern way of life.
With rising costs of living and a growing population, more and more people are looking for more affordable ways to live so keeping rentals at an affordable level for your target audience is important if you want to attract longer-term tenants rather than a series of short-term lets.
How We Can Help
Robert Manning aims to be one of the best HMO management agencies in Greater London. We have experienced providers of HMO and multi-let properties within London. This means we are experts in giving support while you turn your individual property into an HMO. Get in contact with one of our property management specialists today at 0203 725 8399 or contact us now.
When you are first starting out within the property market, it is very easy to become unsure of what you actually need to know. Don’t worry – it is all-natural that this happens. Everyone who has first started out with their buy to let property has been in the shoes of a brand new landlord who knows nothing. To give everyone a helping hand, here is a guide of advice on everything you should know before you step out into the big world of owning a property.
Buy to Let Mortgages
It is important to establish interest rates before investing in a buy to let property. Even though lower interest rates may make borrowing money simpler at first, you should be certain that rental income from your property will cover the mortgage both now and in five years. This is because interest rates are likely to fluctuate over a period of time. A mortgage for a buy-to-let property is not the same as a mortgage for a primary residence. The amount you can borrow is determined largely by the expected rental earnings from the property.
However, in some cases, alternate sources of income are explored. Some lenders require that your rental income be 25% to 45% greater than your mortgage payment as a rule of thumb. Eligibility criteria may also differ depending on who you approach.
Do Your Research
A good recommendation is to consult with a buy-to-let mortgage broker who specialises in this area. They can walk you through the numerous options available to you. If you’re wondering whether you can afford to buy a rental property, determining your affordability will help. If you have a significant sum of money, you might consider buying two properties or making a higher down payment.
Choose the Location Wisely
It’s tempting to look for a reasonably priced two-bedroom apartment far from where you live. But proceed with caution. Being unfamiliar with the location can cause considerable difficulties and perhaps losses. It’s possible you’re unfamiliar with the local market. Because the local rental market may be poor or deteriorating, you may have difficulty finding renters and renting out your property.
If you decide to sell the residence, you may have to travel and may incur financial losses. Consider the prospective tenants in the area. Will there be a demand for young professionals, students, or families? This will also influence your choice of buy-to-let property.
Old or New Property?
This will be influenced by your choices, money, and the length of time available to finish the remodelling. Tenants favour newly built flats because they make renting more convenient. They are typically aesthetically pleasant to young professionals looking to rent. When searching for a buy-to-let property, remember that the owners of other new-build apartments will be competing for the same tenants as you.
Weigh Up The Cost
If you overspend on renovations, you will have to wait a long time to regain your capital. While the rental property may fill up with tenants quicker, renters may be able to find a suitable rental at a smaller cost. Specific standards must be met by your home. It is beneficial to ensure that everything is in functioning order and to have needs such as a refrigerator and washing machine.
Do I Need a Buy to Let License?
Landlords are obliged to have a licence in several parts of the UK. If your property is an HMO, you may need an HMO licence. HMO legislation and licencing requirements, however, differ by the council.
If you do require help in getting an HMO license or need more information about it, contact us as we are able to help you in regards to this.
Which is Better: Furnished or Unfurnished?
If you rent to students, you should supply furniture that is robust and can tolerate student life. Because tenants can personalise the area, vacant homes may be more appealing for longer leases. A third alternative is to rent a partially furnished house. If you’re ready to be flexible with the furniture you give, your buy-to-let property can appeal to a broader market.
You’ve got Your Buy to Let Property, Now What?
It is critical to have a tenant ready to move in as soon as possible. Once your tenants have moved in, your first obligation should be to collect rent on schedule. When it comes to collecting rent and other bills, many landlords are not concerned if these payments are collected on time. When you get behind on your payments, you could soon be pursuing unpaid invoices for six months. If you have a mortgage, this could lead to financial difficulties. Whenever tenants fail to pay their rent and ignore notices, the eviction process should begin as quickly as possible. If your tenants are constantly late with their payments, they must be dealt with by letting agents.
Create a Good Relationship with Your Tenants
Making a relationship early on can be very useful. If you want to inspect your property on a regular basis, you’ll need the approval of your tenants. To gain their trust and respect, perform a few simple activities such as providing them with a welcome gift prior to inspections and providing ample early warning.
How Can We Help
Here at Robert Manning, we take pride in all of the work we do for our landlords. That is why we have 3 specific services for any landlord who comes to us for help when it comes to their property. Our landlord services cover; let only service, let & rent collection service and fully managed service.
If you are interested in finding out more information on how we can help, contact us at 0203 725 8399 or email us directly now for a free quote.
It’s important to find good tenants for your rental property. In doing so you will have less trouble and stress. Having bad tenants can result in damaged property, financial losses and unnecessary stress. Tenant referencing and affordability checks will be able to tell you if your potential tenants are likely to pay their rent in full and on time.
But there’s a lot more you should be looking for when deciding if a tenant is right for your property. Here are some pointers to help you find the right people for your property.
They Should have Good Communication.
Good communication is needed between a landlord and a tenant. You can determine if a tenant has communication skills by asking yourself these questions:
Do they turn up on time for viewings or other appointments?
If they’re unable to attend, do they contact you in good time and look to reschedule?
If they are communicative during the enquiry phase they will more than likely continue to do this when they sign the lease. This is needed as it means they can:
Report problems quickly
Let you know if they are having a problem with their rent payments
Ask permission if they want to do something to your property outside of the tenancy agreement
Respond quickly when you contact them
Interested and Complimentary About Your Property and The Area
Good tenants will also be complimentary of your house and display an interest in the neighbourhood. Positive feedback regarding the appearance and finishing of the rental home shows that they are far more inclined to treat it as their own and take good care of it throughout their tenancy. Additionally, they can be indicating that they want to stay for a while by asking about the neighbourhood, attractions, and services.
Solid References and Credit History
It’s crucial that you check the potential tenant’s credit history. Seeing references from previous landlords can give you an insight into what the tenant will be like when living in your rental property. Performing credit checks allows you to see if the potential tenant will pay their rent on time and not go into arrears.
Get Your Marketing Right
Advertising your property on multiple platforms builds up awareness. The more people that see your listing the higher the chance of it reaching the right people. Knowing where to target is important. If you’re looking for young professionals you should target social media as well as online. The best way to ensure you reach as many potential tenants as possible is to rent your property through a letting agent.
Keep Your Property Looking Great
Having a property that stands out attracts the best potential tenants. A property that looks well-kept and decorated nicely is a must. Having it pristine will ensure that the tenant will keep it that way.
Meet Your Tenants Before Agreeing
Meeting your tenants in person helps you decide whether they are the right fit or not. It’s difficult to form an understanding of someone if you haven’t met them in person. You can get a clear idea of their communication skills and see if they’re right for your property.
Ask Good Questions
Asking questions of your own is important in understanding your potential tenant. Here are some things you should find out:
Why they’re moving
About their previous property
How they’ve found renting in the past or, if it’s their first time, how they feel about that
What their plans are for the future? Are they intending to buy or put down roots in the area?
About their jobs and how long they’ve been in them
What they like to do in their spare time
How We Can Help
Finding the perfect tenants for your property can be difficult, which is why here at Robert Manning we can help. Within our property management services, we offer a tenant reference and credit check service that offers the perfect tenants for your property. We do all of the leg work looking at the tenant’s references and credit checks, while also looking at ID checks, employments, address checks, avoiding CCJs and adverse histories. If this service sounds like something you require, get in touch with us now. Contact us on 0203 725 8399 or visit fill out our contact form now.
Since the 1970s, the value of real estate has steadily increased. From the current situation within the housing market, it will continue to do so unless something unexpected occurs. If you are planning to or if you are already in the property market, it is important for you to look after the property investment you have. When you first get into the property market, owning a property is regarded as a safe and dependable financial prospect. There are a few hazards to be aware of, and here are some of the things you need to watch out for.
Leveraging Your Property Investment
When you start investing in property your main goal is to receive the maximum return for as long as you own the property. However, this isn’t always as simple as it seems.
There is obvious annual growth when predating the future value of your investment. This growth varies for different reasons. These can be based on the location of the property, annual rental yield and the potential for renovations (e.g. extensions). The income is relatively easy to evaluate, however, there is a challenge that comes with the output required to support this.
All rental properties have aspects that need to be considered and managed. These aspects aren’t always visible, but they could become a hindrance to you over time if they aren’t managed correctly.
A big concern for landlords is finding people to occupy their property. A key factor is having a tenant that pays their rent consistently and that stays for as long as possible. Having a high turnover of tenants or non-paying tenants costs you, so finding quality long-term occupants is essential.
Property Management and Maintenance
Part of finding a reliable tenant is also making sure that the potential occupant treats your property with respect. Having someone who demands repairs and damages your property will cost you.
Leaseholds and Legislation
Tenants and Landlords are protected by legislation. This is designed to ensure the quality of living and fair play. However it can appear to lean on the side of the tenant, and Landlords can sometimes find themselves stuck in a loop with a difficult tenant. You will need to negotiate tenancies and navigate leases.
Building Enhancement
By adding building enhancements, it is an excellent idea to increase your return. Doing this will increase the quality which will increase the rental value.
Some enhancements that can be done for the property are kitchens and bathrooms. These usually require renewal every 10 – 20 years depending on the quality of the original. These areas are prime for wear and tear, which could determine the tenant’s decision.
Tax
Owning rental properties means that your tax is affected. The rules can be complicated for property owners especially if they own more than one buy-to-let property. Staying on top of taxation and accounting is vital to protect your investment. Record keeping needs to be accurate and up-to-date to avoid losing money.
Let Us Protect Your Property
Protecting your property can be a hassle. A lot of which is having to deal with tenants. If you need help with managing your property, Robert Manning can help. We have a wide range of landlord services that can be used for different types of property. We can help with property management, HMO property management or block property management. If you are interested in finding out more about what we can offer you, please call us on 0207 725 8399 or email us today. We will cover all the aspects of being a landlord so you can rest knowing your property is protected.
There are tons of stories out there about people’s successes when it comes to their property investment experience. From them, you have heard how it has granted them financial stability and lifestyle freedom. But did you know investing in property also comes with a degree of risk and responsibility? So if you are eager to join in on the fun, it is important to know what to expect before you invest in property for the first time.
This detailed blog post explains how to invest in property, the varied opportunities that are available to you and everything you’ll need to consider before you take the plunge!
Is Property Investment Worth the Money?
Even though we have had continuous economic uncertainty over the recent years, including the COVID pandemic, investing in property still remains solid and secure. Property prices in the UK have relentlessly skyrocketed since 2020, with the stamp duty ‘holiday’ fuelling buyer demand, with nationwide growth of 8.8% reported in Halifax’s June 2021 price index.
On the other side of the market, rental demand has also increased, as tenants look for bigger spaces. The demand for this has been down to more people opting-in to work from home.
How Much Capital Do You Need to Invest in the Property?
There are different factors that could determine how much money/income you will need to invest in the property you want. This will depend on:
On the strategy, you’re adopting
Your budget
Where you’re looking to buy
For buy-to-let properties and development homes, it is inevitably you will put more money in if you are looking for a property in the South West, especially in London. When it comes to the rental market, the high prices in the South West could be a positive financial gain for you in the long run. It’s important to weigh up your spending budget against the returns and yield you’re looking for. When you decide which property looks like the perfect one for you, you’ll need to factor in at least a 25% deposit. This does not include the other costs involved in buying a property.
How will you finance your property investment?
Great news, you have decided to purchase your first buy-to-let property. Now it’s time for you to consider how you are going to pay for it. If you’re planning for a buy-to-let mortgage, you’ll need a hefty deposit. The majority of buy-to-let mortgages require a 25% deposit. If the property you are looking at is £400,000, that means a £100,000 deposit is required. Because buy-to-let mortgages typically have higher interest rates, you must consider how well your potential rental income will cover your monthly mortgage payments and other costs.
Consider hidden costs
In addition to the purchase price of your buy-to-let property, you’ll need to account for additional expenses such as:
Survey costs
Solicitor’s fees
Insurance costs
Stamp duty (if applicable)
How you’ll manage your buy-to-let property
When you’re ready to purchase your first rental property, you’ll need to consider how you’ll manage it. You could also think about hiring someone to manage it for you. Maintaining beautiful properties is important, but staying legally compliant is the most important aspect of being a landlord.
While many landlords do this on their own, using a letting agent’s management services can help ensure that you:
Get great tenants in your property, who are well referenced
Remain compliant with more than 150 pieces of legislation, including gas and electrical safety
Fire, smoke and carbon monoxide safety
Deposit legislation
Right to Rent rules
A decent letting agent will also look after:
Tenancy agreements and renewals
Rent collection
Maintenance and emergency work
Inventories and property inspections
Types of property investment
There are three types of property investment opportunities in the United Kingdom: buy-to-let investments, property development, and new-build ‘flipping.’
Buy-to-let properties
You may have heard that the buy-to-let boom is coming to an end due to legislation. Although landlords face more compliance than ever before, buy-to-let remains a great investment. Getting on the property ladder is consistently difficult for younger people, so landlords who provide standout rental properties will see continued demand from tenants. If you’re looking for a long-term investment that will provide you with income as well as capital growth, buy-to-let properties may be the right choice for you.
Property development
Real estate development can be an excellent short-term investment strategy. In theory, by locating a property in need of renovation work, you can add value before profitably selling the renovated home.
However, the return on your investment is dependent on a number of factors, including:
The amount you paid for the property in the first place
Any costs accrued from renovation work and labour
How quickly any building work is completed
The current market conditions and demand from buyers
The more time you spend renovating, the more likely you are to be affected by market changes. Costs can also rise over time, all of which can eat into your profits. For example, fluctuations in inflation.
Where would you even purchase a buy-to-let property?
Auctions are a hidden treasure! Property can be purchased at a discount, and homes in need of repair frequently appear as ‘lots.’ Purchasing at an auction can sometimes indicate a lack of knowledge about a property, so always read the information pack and try to visit the property before bidding.
You’ll need to stay on top of your finances when developing property, too, and account for any unpleasant surprises that may cause your renovation work to be delayed or cost you more than you bargained for.
However, if you do property development well and buy low, renovate cost-effectively, and sell quickly, you can make a lot of money in a short period of time.
New-build property ‘flipping’
‘Flipping’ is one of those sound-too-good-to-be-true property investing ideas. It’s also a popular buzzword in 2022, with multiple TV series devoted to it! During the early stages of development, a buyer purchases a new-build property off-plan. The property is then sold at a higher price in an emerging market once the construction is completed.
In layman’s terms, ‘flipping’ is a method of profiting from a property with little work.
However, this is a dangerous method for various reasons:
In a crumbling market with low demand, you could be stuck with a property you can’t sell
The building process could be delayed, and the market could change in the meantime
New properties can drop in price if they’re sold quickly by their first owner as, technically, they’re no longer ‘new’
How can I invest in property without buying?
Real Estate Investment Trusts (REITs) allow you to invest in real estate without really owning it. Instead, you invest in a trust that acquires properties and rents them out in the same way that you would if you were a landlord. You are then paid dividends based on the performance of the trust’s properties.
REITs have certain tax implications because of the way returns are given to investors, so always contact an independent tax professional before investing.
How do I start investing in property?
There are numerous factors to consider if you want to begin investing in real estate.
Decide which property investment strategy you’re going to follow
The amount of capital you have to invest and if your goal is long or short-term will determine how you invest in real estate. And, maybe most crucially, how much work you wish to put in.
If you want to make money from property, you must have enough funds to invest. A buy-to-let property may be the ideal option if you plan to invest for the long term. Alternatively, if you have a lot of money to invest, you should think about property development. Several mortgage lenders will not grant you money if the property is not ‘habitable.’ Ultimately, if you want to take a break from your investment, try a REIT or ‘flipping.’
All property investments carry risks, so carefully analyse your options and always seek expert advice.
Do some detailed research
Investing in the appropriate property at the right price will decide much of your success as a property owner. Analyze your target market of tenants or buyers before looking for suitable sites. For example, if you want to attract young professionals, is it convenient to a railway station or bus stop? What are the area schools like if you want to sell to a young family?
Become familiar with the various mortgage types
Obtaining a decent mortgage arrangement might significantly impact your income. If you pursue the buy-to-let approach, your mortgage costs will eat into your rental revenue.
Additionally, if you want to buy a run-down property to renovate, you may not be able to secure a mortgage at all and will have to consider other financing or investing more of your own money. Before investing in any property, always consult with an independent broker or financial counsellor to examine your financing possibilities.
Make the right & smart offer
Whether you’re buying a buy-to-let, a property to develop, or an off-the-plan new-build to ‘flip,’ the price you pay is critical to your success. But it is even more significant for investors because it has a direct impact on their short and long-term profitability.
Choose the right solicitor or conveyance for your property investment
More research is required in this area. As an investor, it can be beneficial to seek out a solicitor who has completed investment transactions. For example, if you want to buy an HMO and rent it out room by room, a conveyancer that specialises in shared living homes can assist keep your acquisition on track. Remember that the faster you complete your purchase, the higher your profits will be.
Arrange a property investment survey
When purchasing a development site, it is typical to encounter unpleasant surprises that eat into your budget and lower your revenues. Complete a detailed structural survey if you’re seeking to buy a property that requires work. You’ll know exactly what you’re getting this way. A complete examination will investigate the structure of the house, highlighting any potentially costly issues such as subsidence, roof difficulties, or humidity.
Location Location Location!
Where you want to buy is one of the most essential decisions you’ll make as a property investor.
When it comes to buy-to-let houses, location is everything.
Consider the following:
Property prices in your investment area
Average rent prices in that area
Rental yields
Potential regeneration or investment in the area in future years
Transport links and employment in the region
How We Can Help
Robert Manning is all expertly and routinely serviced to ensure a good and efficient standard. We collaborate closely with our landlords to update and increase the efficiency of all of our properties. If you have recently acquired a new property and are looking for a property management service, contact us on 0203 725 8399 or email us to find out how you could benefit from our service today.
It can be difficult to figure out how to buy to let in the United Kingdom. You might not know where to begin if you’re a first-time investor. Even for seasoned landlords, this process can be daunting, as the rules and regulations governing property rental are always changing.
If you’re thinking of becoming a landlord there are a few things you’ll need to consider before starting your journey. From mortgages and deposits to figuring out your monthly rent and return on investment, we’ve got you covered. After reading this blog you will be able to take your first steps into the property management industry.
What is Buy to Let?
A buy-to-let property is a property that was bought specifically to be rented out. The majority of buy-to-let properties will require a specific buy-to-let mortgage – a mortgage specifically created for purchasing property to let.
Not every rental property is purchased as a buy-to-let. Some landlords inherit or purchase a home to live in, but later opted to rent it out. In this instance, the landlord must inform their mortgage lender and move to a buy-to-let mortgage.
What Is The Maximum Amount I Can Borrow for a Buy-to-Let Property?
Most mortgage lenders will ask that your rental income by at least 25% to 45% higher than your monthly mortgage payments. This is sometimes referred to as ‘rental cover,’ and it ensures that you have enough money to pay your mortgage during any blank periods.
Your ability to borrow money is also determined by your income, affordability, and credit history. Your eligible borrowing amount may be reduced if you have some outstanding debts.
The loan-to-value (LTV) ratio, or how much you want to borrow in relation to the property’s value, is something to think about. Mortgages with an LTV of more than 75% are hard to come by — and normally require a large down payment.
How Much Does a Deposit For a Buy-to-Let Property Cost?
Deposits for buy-to-let mortgages are typically higher than those for a regular residential mortgage. Most lenders want a minimum of 20% to 25% down, with some requiring up to 40%.
There are buy-to-let mortgages available with lower down payments, but the interest and fees will be significantly higher.
How We Can Help
Congratulations! You’re now ready to take your first steps into the landlord and letting business. If you need help with delegating your landlord needs contact us at 0203 991 6179.