Moving House To-Do List

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

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

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

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.


Hands-Free Property Investing Explained

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. 


Brexit and The Property Market

Brexit and The Property Market

 

With daily updates on Brexit and whether we are leaving the EU with or without a deal, many of our clients are asking what impact Brexit will have on the housing market.

I’m sure I’m not alone in feeling like we’ve heard about Brexit for a long time now, to the point where many of us have become desensitised to the impact on our lives. But with the deadline around the corner again, we thought it would be an opportune moment to discuss the impact on the property market.

Once schools are back in session after the summer break, the property market usually picks up before the festive season, with many families looking to settle into their new homes before Christmas. This year (2019) has been slightly different, with many areas noticing a very slow increase in the market following the summer school holidays. Brexit is definitely to blame for the dampened activity in the property market.

There’s a lot of speculation in the media and in the financial sector that property prices are going to fall following Brexit. Percentages making the headlines are anywhere from 5 to 15% fall in house prices in the UK. While this sounds extreme, these figures will vary widely across the country. We also need to remember that the drop in house prices only has an effect on our finances if we’re looking to move home. So if we don’t need to move home, then we don’t need to be overly concerned about a potential drop in house prices.

Brexit can’t be all doom and gloom, can it? Depending on the outcome of Brexit, we’re likely to see a review of stamp duty, which could positively impact the housing market. The number of individuals who have put off moving due to the uncertainty caused by Brexit will be more likely to take action and move if a deal is reached, which could again put some life back into the property market. There have even been a few articles published that rave about the property market taking off following Brexit. While this sounds positive, only time will tell what exactly will happen with the UK housing market following Brexit.

With interest rates low and homes struggling to sell, it’s definitely a buyers market. There are deals to be found everywhere, and if you are keen to grow your portfolio and benefit from investing your wealth in property long term, it’s time to take action.

Nichol Smith Investments offers a hands-free investing service for our clients, meaning we manage the whole process from finding a property for our clients; managing the renovation or refurbishment of the property; to handing the property over to a letting agent. All hands-free and no time commitment required from our investors.

If you’d like to arrange a call with us to hear how we could help you with your property journey, click the button below. 


Property Staging: Everything You Need to Know

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?

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?

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. 


Property Type: Which Property Type is the Best Investment?

Property Type: Which Property Type is the Best Investment?

 

Most investors will have different opinions on the ‘house vs flats’ debate.

Often the group that prefers to invest in houses believe this as they don’t want to pay service charges and they feel they don’t have control negotiating maintenance costs. Additionally, they may not like the proximity of the other tenants in the building. 

Then you have the other side of the argument, the group that assumes flats are superior investments as they often offer higher profit margins due to lower sale prices and they have less upkeep to organise as a factor takes care of all external works.

Having invested in both types of properties, we have created the lists below to outline some of the pros and cons of each as investment opportunities. As ever, you will have your requirements to consider in addition to these. We have created this as a guide to help you get started.

Pros when investing in flats:

  • Traditionally flats have lower sale prices than comparable houses
  • Different lifestyle trends may show that renting flats is a popular option for younger people or people without children
  • Often they deliver higher cash returns and yields
  • Maintenance fees are split between all the tenants, and usually, the managing agent or factor will undertake organising the works
  • Quality flats can sometimes be secured for around two-thirds of the price of a house
  • As flats are often cheaper, you can buy more of them, and it can be quicker to increase your property portfolio
  • It is possible to spread your risk across more properties which will reduce the effect of a property being untenanted (if the rent is not guaranteed through a letting agent)
  • Buy in bulk, and you may receive higher discounts, and avoid stamp duty in Scotland (6 or more properties bought at one time)
  • Demand in urban areas can increase prices
  • Can easily add an extra bedroom if the flat has a separate kitchen by combining the kitchen and living room

Cons when investing in flats:

  • They could have high service charges
  • Sometimes they can have cramped living spaces
  • Difficult to qualify for financing on certain types of apartments and LTVs can make leaders see flats as higher risk
  • Fewer renovation opportunities – reduced ability to extend, convert the loft or add an extension
  • Flats in large blocks are very similar, and therefore there is less wow factor
  • Frequent tenant changes
  • Some maintenance costs may not be obvious, and this can result in unexpected costs cutting into your profits
  • High-rise buildings are often slower to return capital, and high-rise council buildings can sometimes be unmortgageable
  • It might not be possible to change the property to an HMO (which will help you avoid empty properties and can increase cashflow)

Pros when investing in houses for buy-to-let:

  • There are more options for development, conversion or even extensions which can add value for reselling or remortgaging
  • No additional costs for maintaining common areas
  • Buyers and tenants get a greater feeling of space and privacy
  • Tenants more likely to stay on a long term basis as families tend to commit to properties and will often maintain them
  • The potential for capital growth is much higher
  • There’s scope to convert a more substantial house into multiple flats which can be leased, remortgaged or sold
  • Houses have a broader target market as they attract property investors, developers, first-time buyers and families

 Cons when investing in houses for buy-to-let:

  • Initial costs are normally higher
  • Could have a garden area to maintain
  • Interest and stamp duty rates will be greater
  • Families with children can result in more damage to the property
  • Maintenance can be pricey given the extra size of such properties
  • Cash flow is more of a potential risk with the yield of the property being lower
  • Vandalism and theft are more likely with houses if left empty

The pros and cons of purchasing flats or houses are clear to see.

Which type of investment is right for you?

No answer is correct in this scenario. The question that investors should ask themselves is “What return on investment am I trying to achieve and which property type will help me to do this?”. So long as they have a high yield, both flats and houses are reliable investment options, and neither should be ruled out when making the decision to invest.

If you would like to find out more about how Nichol Smith Investments could help you reach your property goals, click the button below to book a call with us.