Month: October 2019

Hands-Free Property Investing Explained

Here at Nichol Smith Investments, we offer hands-free investing for our clients. But what do we mean by hands-free? This article will talk you through exactly what we do as a property investment company.

Firstly we’ll source a property for you that matches your investment criteria, for example, a two to three-bed property with an estimated value of £130,000 to £160,000. We aim to find you a property at below market value. This ensures our clients make money when they buy.

Next, we’ll carry out any necessary works to the property ensuring a high standard of finish and optimise the rental value of the property. We manage this process on your behalf meaning no hassle for you or time commitment required. This means we have added value to our client’s property. We often recommend refinancing the property after a set period of time, normally 6 months, to the higher valuation, allowing clients to pull out some of the money they initially invested in the property.

We then hand the property over to a trusted letting agent to manage the property thereafter. They will ensure a tenant is vetted before the tenancy starts and will take care of any maintenance issues with the property on an on-going basis.

We provide a first-class service to ensure our clients reinvest with us year after year. Although we offer a portfolio building service for our clients, we also offer another property service. If clients don’t want to own property themselves but do want to invest their money in property, we can offer a fixed return on their investment annually. 

If you’re interested in investing in property but would like to discuss your situation further, click the button below to book a call with me. 

Property Staging: Everything You Need to Know

Property Staging is a relatively new concept in the UK, but our counterparts over the pond have been staging homes for years. This article aims to highlight some of the benefits of staging your home for sale or let.

Home staging, also known as property styling or property presentation, is preparing a home to looks its best. Usually, the aim of making a property look top-notch is to help it sell fast and for the best possible price. Sometimes homes that look great on the outside can sit on the market for months on end with little interest, but staging can go a long way in getting a lot of bang for your buck.

According to UK property analysts, mouseprice.com, homes that have been staged before selling can fetch up to 10-15% more than the competition. That doesn’t always mean investing more money on your home before putting it on the market; it can be as simple as decluttering and being smart about your choice of decor – if you have the time and ability something is always better than nothing.

If you don’t have the budget, you can still spend some time and effort making your home look its best. Clearing any clutter will allow the buyer to easily envision themselves living there. Try and tidy all non-essential items away into storage, whether that be an attic, garage or storage unit. Ensure any minor DIY repairs take place before viewers come round, like fixing any leaky taps or repairing any dents/scuffs in walls. This limits the number of jobs a buyer will feel they need to do when they move in. Give your home a deep clean if you can to ensure buyers attention is not drawn away from your beautiful home. In terms of decor, do your best to lighten your home for viewings. A few strategic lamps can help make your home feel bright and homely. Last but by no means least the area outside your home. Tidy this as best as you can, and if possible, make sure windows are cleaned, freshen up or replace any potted plants, and grab yourself a new doormat. First impressions are vital!

If this sounds like too much work, call in the professionals. We have used professional property stagers in the past for properties we were putting on the market, and they are worth their weight in gold. Not only will they save you a massive amount of hassle, but they will also make your home look fantastic. Property staging companies will discuss your needs, for example, requirements for furniture, and will often visit your home before providing a quote for their service.

Property stagers will bring everything from beds to lamps, to throws, to pictures to make your home look dreamy. Stagers tend to be qualified interior design experts, but they also rent you furniture and home accessories perfect for your home. You’ll not own any of the items they bring to your home; you will just rent them for a specified period of time. Often stagers will leave their furnishings with you for as long as you need them, typically 8-12 weeks. Some can provide you with furnishings for your professional photos only; therefore a top tip is to check the rental period with them when discussing your quote. 

In terms of cost, this will vary hugely depending on your individual needs. The number of rooms, soft furnishings required, and pieces of furniture needed will all affect the cost of the service. Also, the timeframe may come in to play. Deciding how long you need to rent the furnishings for and how soon you require their services will also play a part in cost.

Do we think it’s value for money? We would always recommend thinking about the cost of staging your property versus the risk of not staging your home. If you know it will help your home sell quicker, it should be factored in as an essential cost of moving home. In terms of achieving a higher sale price, we personally do not think anyone could ever be certain exactly how much value it could add to your home during the sale process. You will definitely attract more buyers to come and view your home, and that’s always a good thing when you’re looking to sell. 

Click the button below to book a call and find out how we can help you on your property journey.

Investing in Property: Why is Now the Best Time?

We get asked this question often. Why do we still invest in property? Why should we invest in property? 

We always answer these questions with the same answer. Look at some of the richest individuals in the world, and they’ll have made their money through property or invested in property as their investment vehicle of choice. And it’s the same reason we invest in property personally. We see property as a safe place to invest our wealth long term in comparison to other investment methods.

Many individuals ask why now? Why is now a good time to invest in property? We are going to summarise why we think now is an excellent time to get into property.

The population is growing. More people means more homes are required. Demand for property has never been higher.

We have seen a shift to renting long term. The younger generation favours renting; whether that’s to allow them the freedom to follow their career or to go travelling. Many young professionals cannot afford to buy a property.

Leverage. When you buy a property, you only need to put down a deposit; therefore for every £1 you put in, you can borrow 3 times this from the bank. This is important when we look at capital growth over time, as you benefit capital growth on the total property price rather than just growth of the equity you hold in the property.

Make money when you buy. If you can secure a property below market value, you are technically making money when you buy the property.

Timing: no matter what the market is doing, so long as you buy smart, you should get into property now. There will always be political issues, crashes in the market etc. So long as you are prepared to hold property long term, you will grow your wealth regardless of when you get into the market.

Tax changes (Section 24). The Government brought in a new law last year, that meant that anyone with rental properties would no longer be able to claim their mortgage payments as a tax-deductible expense. Many landlords are realising their rental properties are costing them money, and are keen to sell them quickly and for a low price.

Pensions. Many people are starting to realise their pensions are not going to allow them to live the life they’ve dreamed of, let alone cover their current costs of living. Property can be used to create passive income for retirement, and many of our clients are in property specifically for retirement income. If you are self-employed or have a limited company, you could use your pension fund (via a SSAS pension type) to build your property portfolio. We have a video on our youtube channel explaining the benefits of SSAS pensions in property and I’ll link to it at the end of this video.

Finally, savings accounts. We’ve had so many clients reaching out to us to start their property journey with £50K+ in their savings accounts. These savings accounts might make them 2% annually. Imagine if you could get a 4% net yield year on year, not to mention capital growth over time. It’s really a no-brainer – get your money to work harder for you!

We hope this article has been useful in highlighting why now is the best time to invest in property. The benefits are life-changing.

Click the link below to book a call and find out how we can help you on your property journey.

Repairs: What Can Make or Break a Deal?

Knowing when to walk away from a potential investment property because of unforeseen problems can be a tough pill to swallow. A property may be in the perfect location to add to your portfolio, but if an expensive repair comes along, we need to decide whether it will make or break the deal. 

When looking for an investment property, crunching the numbers is vital to making a property profitable or not. Everything comes down to cost. If we make an offer on a property before costing up a specialist repair, we could end up out of pocket rather than cash flowing.

When looking to buy a property for our clients, we have to be very aware of certain repairs which may make or break a deal, for example, damp, asbestos, roof damage or structural issues. If we suspect any of the problems previously mentioned, we call in an expert for advice. Some specialist repairs can be surprisingly low on cost and inconvenience when compared to others. 

This can separate us from the average investor, who may run a mile when something like dry rot is mentioned. We always instruct a trusted professional to come in and quote for a job before making an offer on a property – that way; we have peace of mind that no stone has been left unturned.

Having a quote to rectify a specific problem can be used during the negotiation process. For example, if a property has dry rot, we would make an offer on the property minus the cost and time delay to complete the necessary work. That way the seller knows exactly why an offer has come in slightly lower than anticipated (or previously discussed) and we have a quote for the necessary work from a trusted professional. 

Sometimes the defect isn’t nearly as costly as first feared. According to figures from the Building Cost Information Service and the Royal Institution of Chartered Surveyors, the cost of eliminating damp from one wall of a terraced house can be as little as £204.

There is, however, a big difference between dampness in one wall of a house and rising damp that affects the whole house. This can cost tens of thousands of pounds. And dampness is often not the highest cost repair. Japanese knotweed can be extremely costly, and from our experience, would tend to be a deal-breaker as you cannot eliminate the infestation (you can only control it). 

Asbestos can be a costly house repair that many fear being found in their property. Asbestos presents a health hazard to all occupants, but only if it is disturbed. The safest course of action is to hire a licensed contractor to remove it. Asbestos can be found throughout the home and can be found in insulation, fire retardants, ceiling and floor tiles. 

Once a specialist repair has been quoted for, we can start the negotiation process. For many individuals, this process will involve speaking with the seller’s estate agent or solicitor. We always try and talk to the seller themselves, to allow for transparency with an offer on their property and reasoning behind the offer made. We find this is the best way to work, but it may not be possible. This is where we need to remove emotion from the property buying process. If the seller is not happy with an offer, and we cannot secure the property for a price that works with our budget, a deal is not made.

If you’re interested in investing in property but don’t have the time, knowledge or know-how, click the link below to book a call with me.