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HMOs: What Does the Future Hold?

Many of you will be thinking HMOs, what’s interesting about student accommodation? Today’s blog will take a look at why HMOs are becoming more popular in the market place, and why property investors maybe adding them to their portfolios.

For those of you who may not know, HMO stands for House of Multiple Occupancy (or Occupation) and is a term used to describe when three or more unrelated individuals live together in a home with shared facilities such as kitchen, living space and sometimes bathrooms. They’re most commonly used for students, and often get bad reputations for being lower quality accommodation and troublesome for neighbours due to student antics. Each local Council will have policies relating to the regulation of HMOs within neighbourhoods, and for your property to be used as an HMO, you will need to apply for a license from your local Council and ensure particular safety standards are met. Because of the specific requirements needed to set up an HMO, the setup cost can be far higher than a traditional single let.

So, why would you want to set up an HMO? 

Typically properties that are let out to multiple occupants tend to attract a higher rent than if the property was let out to a couple or a family (a single let). Here’s an example: a property may rent out for say £800 per month as a three-bedroom family home, but you might be able to charge say £500 per room (one tenant per room) totalling £1,500 per month. As you can see, you almost double the rent you collect each month. 

Another advantage of using a property as an HMO over a single-let is minimising risk. The risk to your income comes from void periods. With a standard single let property when a tenant moves out, you risk of the property sitting empty and therefore not bringing in any income. On the flip side, when you own a property with multiple occupants, even if one tenant moves out and you struggle to replace them, you’ll still receive rent from the remaining tenants. Risk also comes into play with non-payment of rent. If you rent your property to one tenant (whether it’s to an individual, a family or a couple) and they stop paying rent for whatever reason, you lose the full rental amount. On the flip side, if one of your HMO tenants stops paying rent, you only lose a smaller portion of your total rent. Both reducing void periods and risk of non-payment ultimately reduce the risk to your income as a landlord.

HMO’s are an attractive way for landlords to make profits from their properties, but is now a good time to look at setting up new HMOs?

The answer to this is yes. We’ve all read about the shortage of housing in the UK, and HMOs can help relieve a small amount of this burden. HMOs effectively maximise the living space in rental properties, therefore helping with some of the need for more housing, particularly in cities. HMOs are becoming more popular with demographics other than students, such as young professionals or individuals on lower incomes. In many cities, renting an apartment alone or as a flatshare with one other person is still way beyond what the average young professional can afford. With the average age of first-time buyers creeping up in the UK, HMOs can be an affordable place for professionals to live while saving for a deposit for their first home. 

If you decide to consider setting up an HMO for professionals, the best place to start is looking at competition in your local area. HMOs that cater to young professionals are usually of an excellent standard, often with higher spec kitchens and luxurious bathrooms (or possibly even all en-suite rooms). There’s definitely a market for this sort of living, so it’s perhaps a great time to look into HMOs in your local area. Please ensure you check with your local Council for restrictions and regulations in your specific neighbourhood before you get going.

There are some negatives to owning properties as HMOs. I won’t go into the full details, but some of the issues can include: higher turnover of occupants, larger management fees if you use a letting agent to manage the property, more wear and tear on the property, bigger initial set up costs and cost to furnish (and renew/replace furniture) the property. Obtaining a license for an HMO from your local Council also comes at a price.

Interested in Investing in Property?

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Download our investor brochure by clicking the button below.

Maximise Profits from your Property Portfolio

With many news articles like ‘the buy-to-let market is dead’ hitting the headlines over the past few years, we think it’s important to discuss ways to maximise the profitability of your property portfolio. Changes to legislation, such as Section 24, have hit landlords hard. But all is not lost. If you’re one of many landlords that have held on to your portfolio, this article is for you. 

Renovate

Could your properties do with an update? Most rental properties could do with a lick of paint or even updated kitchens or bathrooms. Spending a little on bringing your property up to a good standard can go along way to boosting the rental income you’ll receive every month.

Have a look at property portals like RightMove or Zoopla for other properties in the same area as your rental property to ensure your property is in similar condition (or ideally better than) the competition.  

Change the use

Would your property make you higher returns if it was used for an alternative purpose than buy-to-let?  For example Serviced Accommodation (also referred to as Airbnb.

Serviced Accommodation has become ever more popular with property owners due to the higher returns achieved. Something to bear in mind with this strategy is consulting your lender to ensure your mortgage product is still suitable for serviced accommodation, and finding a good Airbnb management company to manage your property is highly recommended. 

If your property has three bedrooms or more, would you consider changing the use to an 

HMO (House of Multiple Occupancy)? HMOs are popular for students and are becoming popular for young professionals. Quite often, property owners can make significantly higher returns when using their property as an HMO rather than a single-let property. Consult your local planning department for guidance on restrictions and necessary safety alterations.

Review your lending

It seems very obvious, but check out your mortgage product (if you have one) and ensure you’re on a low-interest rate. You’d be amazed at the number of landlords who leave their properties on the same mortgage for years on end when switching could save them hundreds of pounds every year. Interest rates are at an all-time low, and with some mortgage providers offering a ten-year fixed-rate mortgage, now could be the time to switch lenders. Give your mortgage lender a call to see what’s available, and if there are no savings to be made with them, look into switching lenders.

Increase your rent

When did you last increase your rent? Many landlords shy away from raising the rent on their properties, particularly if they’ve had tenants in their property for some time. I’m not recommending charging in and doubling your tenants’ rent, but it may be worth reviewing other similar properties nearby to get a feel for a fair rental price. If the rent your charging is behind other similar properties, it’s time to increase your rent. On average, the amount you charge for rent should go up by roughly 3-5% per year to account for inflation and increased costs. This will help increase the profitability of your portfolio.

Still not making the yields you feel you should be? If you review the above methods to maximise profitability from your portfolio and are still wondering why your portfolio yield is lower than expected, it could be time to sell. Sometimes it’s worth cutting your loss and selling any properties that are performing poorly. We like to think of it as removing the driftwood. If you sell properties that perform poorly, the cash pot you gain could be used to buy properties with higher yields. 

Interested in Investing in Property?

We make property investing simple for people who want to benefit from high-quality property investments without investing their own time or resources. Our investors can benefit from a passive income on a fixed term, backed by a brick and mortar asset and a team of experienced property investment professionals.

Download our investor brochure by clicking the button below.

Buy, Renovate and Refinance

Some of you may be familiar with the concept of buy, renovate and refinance. Today’s blog is going to walk you through the concept and give you some example figures.

The idea of buying a property and renovating it isn’t a new concept. When considering refinancing following a renovation, there can be a real light bulb moment for individuals who have not come across this before.

When a property is purchased that requires a lot of work; the property purchase price tends to reflect this. In comparison to other properties in the local area, you should definitely feel like you’ve picked up the property for a great price. 

Now, this is when your number-crunching becomes essential. You should have a good idea exactly how much your renovation work is going to cost, plus all other associated fees with buying a property such as legal fees and stamp duty. We also put around 10% of renovation costs aside for an additional safety net, as renovation costs often creep up. Many property investors will put down a small deposit and take out a mortgage to pay for the rest of the property, say a 25% deposit and 75% mortgage (75% loan to value). 

When you initially bought the property, you’ll have spent some time looking at other properties on the same street or same area to get an estimated end market value, i.e. what the property will be worth once renovated. From here we have an idea of:

• All fees included with buying the property 
• Renovation costs
• End market value once renovated

If you’ve spent time crunching the numbers before diving in and purchasing the property, you should have a good margin between all the money spent purchasing and renovating the property, and what it will be valued at once renovated. This is your profit.

Where experienced investors can use their skills and make their money work harder for them, is when they buy a property, renovate it, and refinance the property at the higher value once the renovation is complete. If a property is purchased at a very low price, for example, if the property is in extremely poor condition, or where there can be a huge uplift in value by, for example converting the loft or extending sideways/into the garden, when the property is refinanced the investor can occasionally pull out all the capital that was initially invested.

Here’s an example:

A 2 bedroom bungalow purchased for £175,000.

Fees, stamp duty and renovation add up to £75,000.

Initial 25% deposit put down – £43,750 (therefore borrowing £131,250 from the lender)

Total money invested from our pocket into the deal: deposit plus fees plus renovation costs: £43,750+£75,000 = £118,750

Once renovated, the bungalow has three bedrooms and a large living room/kitchen extension. 

It is now valued at £375,000.

Property is refinanced at the higher valuation of £375,000…

So borrowing 75% of £375,000 is £281,250.

The mortgage provider will, therefore, increase your borrowings to £281,250 for the renovated property. 

New mortgage – old mortgage: £281,250-£131,250 = £150,000 of additional capital borrowed from the bank.

With this additional £150,000 of borrowed money from the bank, we can pay-off our initial investment costs of £118,750, and walk away with a small profit.

This example deal hopefully highlights the power of buying properties in need of significant renovation works or properties where ‘value’ can be added (extensions, loft conversions, etc.). If the difference between purchase price plus all costs associated, and the estimated end value are high enough, if we decide to refinance a property once the renovation work is completed, we can potentially pull all of our initial costs out of the property. Now that’s what I call making your money work hard for you.

We always need to bear in mind that not all lenders will allow you to refinance a property following renovations, and while it may seem financially smart to look for these sorts of projects, they come with additional risks. Before undertaking a project of this scale, we would recommend speaking to your local estate agent, local tradespeople, and your financial advisor to ensure you are knowledgeable and financially safe to complete this sort of undertaking.

Interested in Investing in Property?

We make property investing simple for people who want to benefit from high-quality property investments without investing their own time or resources. Our investors can benefit from a passive income on a fixed term, backed by a brick and mortar asset and a team of experienced property investment professionals.

Download our investor brochure by clicking the button below.

Are Your Savings a Thing of the Past?

From a young age, most of us are taught by our parents or teachers to save part of our earnings. Save for a rainy day, a deposit for a house, a special occasion, or an emergency. Saving our money is ingrained in us. 

But is saving money in the bank a smart thing to do, both now and for future generations?

Putting money into a savings account is a smart thing to do for a percentage of your wealth, to ensure you have money set aside in case of emergency. But for many parts of Europe, individuals are being charged to do this.

The European Central Bank lowered its interest rates below zero during 2019. Negative interest rates mean it costs you money to keep your savings in the bank and was introduced as a last resort to stimulate growth in the economy in Europe. The plan was to lower interest rates below zero to encourage banks with significant cash holdings to get capital out to work.

We’ve all heard the phrases “the rich are getting richer” and “it takes money to make money” but many of us would assume this relates to the rich earning high salaries and accumulating savings in the bank. When we think about our savings account, for example in an ISA, you’d be lucky to make 1% of interest per year on your savings. Considering it costs you money to have your savings in the bank in Europe, this begs the question; how do the rich grow their wealth if their savings are not growing in the bank.

Many individuals who are growing their wealth faster than the average individual are doing so by investing their capital in assets. We can accumulate wealth by the rising value of assets, such as property and shares. The wealthier have more assets and more capital gains. These are banked, not consumed, explaining why the so-called rich get richer. Property, in particular, has been very profitable for investors in the UK since the 1990s.

Could it be time to challenge our beliefs of putting a portion of your salary every month into savings? I’d say it’s time to reassess what part of earned income is saved, and increase the portion that’s invested in assets. The start of a new decade could be the perfect time for you to assess your current wealth and consider investing a portion of your savings in assets. 

If you’d like to get into property investing but don’t have the time or knowledge, book a call with me using the button below to discuss how I could help you on your journey.

Serviced Accommodation: Should You Get Involved?

Many of us will have heard of serviced accommodation, but today’s blog will take a more in-depth look into it and whether it could be a strategy for you to get involved in.

Traditional buy-to-let properties are a familiar concept for many of us, where you rent out an apartment or house to a tenant on a long term basis. Serviced accommodation is a little different from this, as you rent your apartment or house on a short term basis. In effect, the property you rent out is effectively a small hotel, as guests can stay anywhere from one to two nights for months at a time. 

Serviced accommodation has become a topic of debate in recent years, with lots of media attention surrounding AirBnB. AirBnB is a business that advertises serviced accommodation but has become the go-to company when looking for holiday accommodation. Other companies advertise serviced accommodation, such as Booking.com, Hotels.com, Spotahome etc. but we often hear AirBnB being discussed.

Serviced accommodation has many benefits for individuals travelling for work or pleasure. Benefits for the end-user are:

• A home-from-home setting
• Hotel standard services but more homely than a hotel room 
• Space: more space to enjoy, e.g. bedroom, living room etc
• Convenient: guests can prepare food (properties have kitchen facilities)
• Often apartments will have laundry facilities (washing machines and dryers)

Serviced accommodation is becoming ever more popular for business travellers as it gives them more for their money than staying in a hotel. Companies tend to favour serviced accommodation for their workers as it is often cheaper to stay in serviced accommodation than hotels, mainly if the length of stay is weeks to months. Business users will be more likely to do their laundry, cook their meals, and generally expense less when staying in serviced accommodation in comparison to staying in a hotel.

You’re probably wondering what’s in it for me?

With serviced accommodation becoming more popular, the prices charged per night are comparable to guest houses and hotels nearby. When you compare the income generated through a typical buy-to-let where your property is rented out to one tenant long term for, say £800 per month in comparison to renting your property per night for £60 a night in low season to £120 a night in high season, you can see why many investors are leaning towards serviced accommodation. It doesn’t take many nights of renting your property out per night to overtake the traditional buy-to-let rent. 

So why doesn’t every landlord switch to serviced accommodation?

There are some considerations when looking into serviced accommodation. As we mentioned earlier in the article, you are technically running your rental property as a mini-hotel.

Bookings: You will need to advertise your property on multiple different websites to ensure it can be booked by a range of guests from holiday goers to corporate business clients. You need to create a listing and upload photos and reply to any questions or enquiries you receive through the various platforms.

Changeovers: You are running your rental property as a hotel; therefore, you will need to get the property changed over between guests. Linen will need changing, the whole place will need to be cleaned from top to toe, and you’ll need to replace consumables (toilet rolls, toiletries etc), take bins out, and check for damage or repairs.

Check-ins: Guests will arrive when it’s convenient for them; therefore, you need to make arrangements to let them into the property, or use a key safe. Remember, no matter how simple you make instructions, there will be the odd guest who struggles to enter your property. Imagine a late-night call from a guest who has been for dinner and a glass or two of wine asking you to help them enter your property at midnight (or later).

Furnishing: While you could technically buy a rental property and put in any old furniture, the price you can charge per night for guests to stay will be higher if your property is kitted with higher quality furniture. Pick a few statement pieces of furniture to give your property a luxurious feel and make your property stand out from other similar properties, which will attract attention to your property and likely increase your bookings. High-quality fixtures and fittings will withstand the test of time too, so spending money on quality furnishings upfront is a double win.

Location: Location location location. It’s something that all potential investors or current landlords must consider when researching property to buy for serviced accommodation. If a property you’re looking to purchase or currently own is located in a rural location, it can be more complicated to manage as serviced accommodation. One particular sticking point for managing properties in rural areas is the availability of laundry services for all the bed linen you’ll need if your property turns over every night. 

As you can see, there’s a lot to organise with serviced accommodation. For many landlords, this would be too big of a time commitment. It’s pretty much the same as running a bed and breakfast, without cooking breakfast! So you’ll now be wondering how anyone manages to have serviced accommodation without being full-time in property. This is where serviced accommodation management companies can be worth their weight in gold. 

Many AirBnB management companies can manage your AirBnB for you, but be warned, do your research as they’re not all as good as each other. These companies take care of all the bookings, all the cleaning and bed linen, and can be around 24 hours per day to deal with any guest issues. This service, of course, comes at a price but for many AirBnB landlords, this is an essential cost for running the property as serviced accommodation. Most AirBnB management companies will charge you a percentage of a night’s stay to run your AirBnB for you, anywhere between 12.5% and 20%. This is where number crunching comes in, as the numbers need to stack up to ensure running an AirBnB will make sense financially if you decide to take on an AirBnB management company. 

Serviced accommodation can be a fantastic property strategy if it’s executed correctly. If you’re considering purchasing a property or converting an existing property into serviced accommodation, ensure you have crunched the numbers and have thought about the logistics, as there are a lot of moving parts. You need to ensure that if you have a mortgage on the property, it allows for short term lets and that your insurance covers the short term letting of your property. Be mindful of local council legislation and whether you need to apply for a change of use of the property to allow short term lets. 

The Importance of a Property Exit Strategy

We’re all aware of what’s going on in the news at the moment. With a general election coming up quickly, Brexit and other financial industry uncertainties, many of us have thought about how this will impact the property market.

This blog discusses property exit strategies if the housing market shifts after purchasing a property. An exit strategy is about the financial plan for a property and will be specific to the property and your financial situation.

There are many factors in property investing that are within our control for example where to purchase, type of property, negotiating the purchase price, managing the process from conveyancing to the refurb, but not everything is within our control. If the property market changes, we need to make sure we have thought of exit strategies.

We need to be smart with our numbers when thinking about investing in property. All wealthy property investors will tell you that you make money when you buy. Therefore when you are looking for a property to invest in, start with the numbers, and make sure you don’t pay over the odds for a property. Cost up all renovation work, legal fees, stamp duty etc. to get a figure for total costs involved in buying a specific property. We research the current market in the area we are looking to buy in to estimate our end value. Look for properties for sale, under offer and sold within the past 12 months to get a feel for the end market value. We always err on the side of caution with our end value and keep it on the lower side of recently sold properties. With the end value in mind, we take away our profit margin and all costs associated with purchasing and renovating the property from the estimated end value, to calculate our maximum purchase price. 

The calculation above helps decide a fair price to offer if you’re considering flipping a property. That might be the initial plan, but we like to dive a little deeper. We always ask ourselves: if for some reason the property market dropped or the property didn’t sell, could we sacrifice some of our profits and still sell the property without making a loss, or could we hold onto the property? Spending some time researching the area you are looking to invest in will go a long way when it comes to the second strategy. If you needed to hold on to the property while the market comes back up to the level you bought at, how much could you achieve in rent and what is the rental demand in the area? We ideally like to work out the yield of the property, which is the total annual rent divided by the purchase price (or estimated end value if we’ve completed renovation works), to ensure the deal still stacks up. This will give us two more exit strategies: hold on to the property and pay down the mortgage with money from rent, or rent the property until the market picks up and sell once we know we’re profitable.

Deciding on an exit strategy is important when considering buying a property as an investment. We always make sure if we’re planning to flip a property, do the numbers still work if we needed to hold the property and rent it out. Other property strategies that could be considered are HMOs or serviced accommodation (AirBnB). We wouldn’t normally crunch the numbers for either of these strategies unless our first couple of options were not feasible. Normally if a property is suitable for an HMO or AirBnB it would be the main strategy and the property would’ve been bought with this in mind. Both of these strategies can be very lucrative but require experience, and a bigger time and monetary investment.

Moving House To-Do List

Moving House is classed as one of the most stressful experiences in life. So why would anyone do it? Many of us buy our first home and eventually outgrow it. For whatever the reason for moving, it can still be incredibly stressful. We have moved home many times, and we have found that being organised can make the process much less stressful. We’ve compiled a summary of big and small tasks to remember when moving home.

Starting packing early

If you haven’t moved home for many years, you will have likely forgotten what a big task this is. Packing your home can take weeks, if not months. So start the process as soon as possible, including a good clear out of any items you no longer need. The bigger the clear out you do before you move, the easier the unpacking will be at the other end. Like us, if you hate packing, book a company as soon as you can to pack and move your belongings for you. It comes at a cost, but we factor this into our budget when moving home as an essential fee.

Redirect your mail

When you move home, don’t forget to redirect your mail. Organise this before you move to ensure your mail will be forwarded to the correct address while you notify everyone that you’ve moved. The Post Office offers a mail redirect service at a small cost for six months (or longer) while you get yourself organised.

For any drivers

Make sure to update your drivers’ license with your new address. It’s an offence not to update your drivers’ license, so make sure to tick it off your list once you’ve moved. Your car insurance will need to be updated to your current address as it may be invalid if the provider has your old home address. Any motor vehicles will need to be registered to your new address too.

Utilities 

On the day you move out, take meter readings for gas and electricity. This will allow you to settle up your account(s) on the property and ensure the buyer of your home will pay the bill thereafter. 

Internet

Many of us can’t live without WiFi, and depending on your phone network signal in the area; WiFi could be vital at your new property. It’s worth contacting your current provider early on to see if they can move your existing account to your new address. This will save time and hassle. If you need to change supplier, it can take a few weeks, so getting this organised early avoids any disappointment.

Multimedia

For many of us moving home will also mean organising your TV licence and Netflix Sky etc. Similar to moving your broadband, call your current media provider to see if they can directly switch it to your new property. Although sometimes forgotten about, make sure to change your TV licence to your new property too.

Council Tax

Notifying your local Council that you’re moving is highly important. Some Council’s allow you to do this online, which can be more time-efficient than handling this over the phone. If can also let them know where you’re moving to and if it’s within the same Council you can inform them of your new address. 

Insurance Policies

You’ll undoubtedly need to spend a bit of time sorting out various forms of insurance. The insurance you have on your current home may be suitable for your new property, but remember we need to ensure both building and contents. These are sometimes with the same provider or in the same policy, but if you live in a building that’s shared, you may need to discuss communal buildings insurance with the provider or buildings factor (if applicable).

Your health is your wealth

If you’re moving more than a few streets away from where you currently live, you may need to inform your local GP surgery and Dental Practice in case you fall out with their catchment area. Once you’ve moved, you’ll need to register with new practices. 

Vote

Last but by no means least, ensure you register to vote at your new address. This is something that’s often missed during the home moving process but can be incredibly frustrating if an election comes round and you aren’t registered to vote. Don’t miss out and get registered.

We hope you’ve found this article helpful in listing many of the important things to consider when moving house. We are currently in the process of moving ourselves, so it seemed sensible to detail the process for individuals who haven’t moved in some time.

If you’d like to get into property investing but don’t have the time or knowledge, book a call with me using the button below to discuss how I could help you on your journey.

Buy to Flip: Top Considerations

We’re all guilty of doing it. Browsing through Rightmove or Zoopla and finding a home in a good area for what seems like a bargain price…where’s the catch? The old ‘property could do with a degree of modernisation’ from the estate agent’s description gives us a clue. Then you take a look at the pictures and realise the property needs a lot of work. But if you still find yourself interested, then let’s think about whether this could be a suitable property for you to buy and renovate (and possibly sell for profit).

Here are some of our top considerations before considering renovating a property.

Number crunching: 

We are all familiar with what we can borrow from the bank to purchase a home, but when considering a property that needs a degree of renovation, this cost will need to come from your savings (after your house deposit is paid). However, you may save a little on stamp duty due to the reduced purchase price. 

And while we can estimate costs such as kitchens, bathrooms, flooring etc we need to remember that unexpected expenses arise too. Expensive repairs can include damp work, roof repairs and windows need replacing. You might also need to rewire the electrics or replace the heating system, but this shouldn’t be an unexpected cost. Some renovation experts in the industry advise calculating all your expected costs and adding as much as 20% extra for unforeseen expenses.

Costs that can be anticipated are for fees involved with individual professionals needed during the renovation works, such as additional surveys or advice from an architect. 

It’s important to mention that borrowing money from a lender isn’t guaranteed for all properties. Occasionally properties are classed as unsuitable for lending, which would mean any purchaser would need to pay for the property outright in cash, and may struggle to get borrowing in the future. Often if a property is not suitable for lending, it will specify this in the estate agents description, or may state only suitable for cash buyers. 

Time to view the property:

You may want to view the property yourself initially before thinking about taking an expert round with you. If you are considering a big renovation project, it would be wise to take along a local builder and/or building surveyor to a viewing to help you get a sense of the renovation costs, and whether there are any costs you may not have identified. Surveyors will likely charge you for this ‘walk round’, but the advice can be invaluable if they identify something you’ve missed. 

Another key professional to discuss your next project with is your estate agent. You can discuss exactly what you plan to do to the property, for example, renovate and extend to get a feel for the end market value. From this end market value, you can work backwards to ensure your renovation costs and purchase price seem sensible, ensuring you are making a profit on top of all expenses. A wise estate agent once said to us ‘you don’t want to be the most expensive house on the street’ and we have stuck by this rule. If your renovation work will add massive value to your property but also make it hugely expensive in comparison to other homes on the street, you may want to reconsider your project.

Getting your purchase price spot on: 

Once you’ve factored in all costs and decided you’re in the financial position to go ahead with your project, surely it’s time to take the plunge? Think about the following points before proceeding: 

1. Are you going into this project with your eyes wide open? Projects don’t often run on time, so are you willing to potentially live in a building site for months or years. Have you thought about weeks or months with no bathroom or kitchen?
2. The costs for your project will undoubtedly run over, have you factored in extra funds to cover this? And will you still be financially safe if your calculations are a little bit off?
3. Is it your dream home, or are you financially driven? Sometimes we can get caught up with the figures and see only the profits. If the house could be your dream home, you might be happier with the decision than if it’s purely financial.

Don’t forget planning and regulations: 

If you’re planning on extending and significantly remodelling, it’s vital to get an Architect on board early to guide you through planning and any regulations. Your local Council website can give initial guidance on whether you will need planning permission for your building works, but moving forward, you will need an Architect to draw up plans and submit these for planning. Something incredibly important when it comes to planning is whether your new home is a Listed Building and whether it’s in a conservation area. Both of these designations can dictate what, if any, alterations or buildings work you can do to your new home. 

We hope you’ve found this article helpful when considering taking on a renovation project. We’ve completed a few renovation projects ourselves over the years, and each one has been a totally different learning experience. 

If you’d like to get into property investing but don’t have the time or knowledge, book a call with me using the button below to discuss how I could help you on your journey.

Fundamentals for Successful Property Investing

Many individuals starting on their property journey quite rightly begin by doing some research online. Some even buy property publications or books, and some attend local property events. On the other end of the scale, some individuals dive into the deep end and snap up their first investment property without too much research. Our journey has been shaped by a bit of both! We started our property journey by purchasing our first buy-to-let and luckily didn’t go too wrong. From there, we have learnt from on the ground experience, but also meeting with individuals in the industry who have beaten the path before us. We’re going to share some of the fundamentals that all successful property investors have in common.

1.Make a plan and stick to it!

One of the foundations of success in property investment is to have a plan. Firstly think about the end goal, and where you would like your property journey to take you in terms of cash flow or growth of equity. From the end goal, work backwards to create achievable shorter-term goals. Creating a business plan of sorts will help keep you on track to your goals and reduce the risk of you losing traction. Ultimately a plan can help you reflect on your journey and appreciate success along the way.

2.Build a good reputation

Being a new property investor in a local area will help you build a network of other local professionals within the region. Building a network of trustworthy people is worth its weight in gold, and growing this network will pivot around whether you are an honest and ethical investor. If you make a wrong move or let someone down in the industry, your reputation will be tainted quickly. Just remember the phrase about Karma being a … . 

3. Knowledge is power

When you’re first starting out as a property investor, make sure you spend time developing your level of knowledge of the industry. This can include knowledge of your local area and the market, mortgage rates, tax regulations, government regulations and building rules. This will help you make wise decisions when it comes to investing and will save you money, so prioritise building your knowledge. 

4. Get your ducks in a row

We advise you to find a good accountant and pay for their services from the outset. As a new property investor money in vs money out can make or break your new venture, therefore make sure you pay to get the best advice. An accountant will be invaluable for you moving forward as they have extensive knowledge of tax laws and acceptable expenses, and they’ll pay for themselves many times over in the tax you’ll save you. 

5. Teamwork makes the dream work

A successful property investor never claims to be an expert in all aspects of property. All property investors need to lean on experts in the industry, for example, conveyancing solicitors, tradespeople, estate agents, letting agents to name a few. A carefully selected group of professionals who can advise on any given project will make or break your success. So remember the phrase: teamwork makes the dream work. Start building your team of experts in the industry early on. 

6. Risk vs Reward

While many investors look at property as a way to make big bucks, we need to always remember property can also come with risks. Think big wins, and big loses. Property is known as a method to grow wealth over time, so keep this in mind when starting out. Invest wisely: buy right and ensure you have a team of experts around you to support you on your journey. Complacency can be a killer, so be fully equipped with knowledge of all the risks involved.

By following the fundamentals we have discussed above, you’ll give yourself the best chance of long term success in property investment. If you’d like to get into property investing but don’t have the time or knowledge, book a call with me using the button below to discuss how I could help you on your journey.

Building Passive Income

Many of us have heard about passive income but are guilty of not knowing exactly what it means, or how we can build passive income. This article aims to cover different types of income and dive a little deeper into passive income through property.

First of all, we need to address what passive income actually means. Passive income is income earned through an asset that requires minimal input. Think of the concept of earning money while you sleep. The asset will produce an income for you whether you spend time on it or not. Passive income can come from one asset or many assets, with wealthy individuals normally having multiple streams of passive income.

There are many different ways to create passive income. I have compiled a short list of examples of passive income-producing assets:

• Network marketing – products sold through word of mouth
• Stock investment or trading – short term or long term income-producing asset through the stock market
• Software – creating software, for example, an app that produces you income when it is bought or used on-going
• Education – creating income through publishing a book, producing online courses etc
• Affiliate marketing – creating income through promoting other peoples products that are sold by you
• Franchising – payment of royalties or passive income by allowing an individual or party to operate their own business using your branding, systems and proven business model
• Drop-shipping – generating income through advertising and selling a product that you don’t stock. You act as a middle person between the manufacturer and the purchaser and do not hold any stock or complete the shipping. 

Last, but by no means least, is property. Property is one of the oldest methods to generate passive income. Income can be gained passively through property when the rental income from the property covers all the bills and costs associated with renting the property and leaves you with money left over.

An example of monthly income from a typical property deal would include:

(Property purchase price £130,000 – a mortgage of 25% loan to value and interest rate of 4%)

Rent £800

Less expenses: Mortgage payment £325, Letting agent fee £80, Insurance £30

NET RETURN: per calendar month £365 

We can see from this example property deal how passive income can be built through property. Per year, the example above would equate to £4,380 in passive income. We always encourage our clients to think about what passive income could do for them, to build towards a target passive income figure. Whether it’s for holidays, expensive hobbies, or to tuck away for a rainy day fund, property is an excellent investment vehicle.

Whether you have thought about getting into property but haven’t taken action, or have a couple of properties already but would like to continue to grow your portfolio, we would love to hear from you. We can take all the hassle away from property investing, managing the entire process on your behalf.

Click the button below to book a call with me, to see how we can help you build passive income through property.