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Using An Estate Agent To Source Below Market Value Property

 

Below Market Value Property One of the most important jobs of a property investor is to source below market value property. A below market value property is a property that you have bought for less than its value if it was to sell on the open market.

For example if you were to purchase a £100,000 property for £80,000 you will have bought it at 20% below market value. This property will have £20,000 of equity which is yours to keep. Furthermore, since the property is below market value, there’s a strong likelihood that you will be able to buy it with no money down.

In other words, without requiring a deposit. Theoretically, you can buy as many properties as you desire without ever using any of your own money whatsoever! If you are able to do this repeatedly, your business will experience phenomenal growth.

In contrast, if you were to buy a market value property, the traditional routes of property purchase would demand a deposit of anything from 5-10%. As a Property Investor, if you were only to buy property at market value, you would soon run out of money and your business would come to a stand still.

This is why it is so important for a Property Investor to invest as much as possible in below market value properties.

So, how do I find below market value properties?

Regardless of what people say, I find estate agents to be a valuable resource when it comes to buying below market value property.

By being persistent, and proving to an estate agent that you are a serious investor, you will have them ringing your phone of the hook with potential deals. Initially, an estate agent may pass you deals that are not below market value.

If this was to happen, thank the agent for calling you and let him know that the margins don’t work for you. However, you are still looking to buy several properties that month and he should contact you again if he receives anything.

At all times, remain polite and check with the agent at least once a week. Over time, a relationship will develop with your estate agent and he will start passing on good property leads which meet your investment criteria.

Once you have completed on a couple of deals with your specified agent, you will find that he places you on his preferred list of contacts. This is where you need to be to receive the great deals.

Ideally, you should be a preferred contact for several agents in your area. This way, you will ensure that you will hear about any potential property deal first.

 

 

 

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What Are The Legal Requirements Of Landlords?

 

If you are an existing landlord, or intend to become one soon, you need to be aware of certain regulations.

The Property Business is like any other business where you need to comply with several regulations in order to operate in the business.

Fortunately, the requirements are not that onerous, and soon become second nature.

As a landlord, you have a duty to

• take safety measures including:

-ensuring means of escape are kept clear, maintained in good order and repair, clearly displayed and signposted to all occupants.

-ensuring fire fighting equipment is kept in good order and is well maintained.

-taking all measures reasonably required to protect the occupants from injury, for example, preventing access to unsafe areas, such as roofs.

• supply and maintain water supply and drainage, gas and electricity.

• maintain common parts and installations.

• maintain living accommodation including any furniture or appliance provided by you, the landlord.

• provide waste disposal facilities.

You also need to be aware of The Furniture and Furnishings Regulation 1988, Gas Safety and Electrical Requirements.

If you are unsure of any specific requirements, you could always contact your local authority and ask them for their advice. Alternatively, a quick 30 minute search on the internet could provide you with all the answers that you require.

When starting your property business, you must comply with these regulations as non-compliance could result in hefty fines or imprisonment in the most severe of cases.

However, once you’ve bought your first property and have ensured it meets all minimum requirements, all you need to do is to replicate the processes, thus any additional property will be much easier for you to prepare for letting.

 

 

 

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Is There A Market For Multi-Let HMO Properties?

 

HMO Property Building Since Houses in Multiple Occupation (HMOs) provide much needed affordable housing, particularly for younger people, there is a strong market for such accommodation. I can only see this market growing further.

As property prices increase, first time buyers are also getting older. 5 years ago, it was common for a sub-30 year old to purchase a property. However, because of the current house price/income ratio, it’s uncommon for anyone below the age of 30 to be able to afford a decent property without raising a huge deposit.

Therefore, people are ‘forced’ to rent. Those that can afford to, will rent out a single bedroom flat. Otherwise, it is more common for groups of friends to live together in 2+ bedroom houses and flats.

A tenant will often think to himself, why pay £700 per month on a mortgage when you can rent a single room from £200 per month depending on where you live. This has created a huge demand for HMO landlords who need to fill rooms in their multi-let properties.

The type of people that would want to live in such accommodation include, but are not limited to:

• Students
• Nurses
• Doctors
• IT contractors
• Shop workers
• Airport workers
• Newly qualified graduates
• Asylum Seekers
• Housing Benefit tenants
• Recently divorced tenants
• Foreign (non-uk) citizens
• Etc.

In fact anyone, who enjoys living with other people. I get several calls a day from the above types of potential tenant looking for individual rooms to let in a property.

So if you are looking to purchase an investment property to let out to sharers it may be worthwhile to determine where these sorts of people would like to live. Once you have shortlisted several such areas, you can focus your efforts accordingly.

 

 

 

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HMO Properties Are A Great Way to Get Extra Cashflow

 

HMO Property InvestingA House in Multiple Occupation (HMO) is a property that has been let out to sharers rather than a single family unit. These sharers can be anyone from students to professional employed people.

I am often asked by would be and established property investors, why I invest in HMOs.

My answer is simple: CASH. By letting your house to sharers you can receive up to 300% of the income that you would otherwise get. However, it is more common to achieve on average 100% additional cash flow.

With this additional cashflow, you can invest in further property acquisitions or go on that much needed holiday!

The reasons I love HMOs so much are because:

1. I get immediate and greater cashflow than I would not normally get from a single-let unit.

2. I still get the long term capital growth.

3. I do not need to fill all rooms to get a return on my investment!

In my opinion, the enhanced cashflow outweighs any disadvantages such as possibly higher maintenance costs. Once you have your system in place to deal with HMOs, the disadvantages will feel like nothing, and you’ll wonder why you never considered multi-lets before.

If you are still uncertain about HMO properties, I would suggest you sit down and do a quick calculation.

A 3 bedroom house with a downstairs lounge, that would normally rent to a family for £600 per month could bring in £1,040 pcm if you were to rent each of the 4 rooms out at £60 per week; that’s an additional £440 pcm, ie. an extra £5,280 per year!

You only need to do this a few times before you start seeing amazing returns on your investment.

So next time you’re looking for an investment property, you should definitely consider converting it to HMO use. Try doing it for just one property – make it work for you and then replicate your successes.

Once you have developed a system to manage your HMO properties, you will find it’s no more work than managing a portfolio of single-let properties.

 

HMO Property Riches Book Javaid Kiyani

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Grow Your Property Business By Outsourcing

 

When I first started in property I would do everything myself. For example, I would source the property, prepare the property for letting, look for tenants, reference them, arrange viewings and do a lot of the property maintenance myself.

This was a real drag on my time and I found myself working harder and for longer hours than I would have preferred to. However, due to a lack of focus, the business wasn’t growing.

I later learnt that this was not the best way to run a successful business. By doing everything myself, I was actually hurting the business. I was focusing on menial jobs and not the most important job of all – that of growing the business.

I then began to outsource and the business benefited significantly as I was spending my time as a business owner and not as an employee.

Some of the things a property investor can outsource are:

 Property maintenance – anything including painting the walls, changing washers and the gardening can be outsourced.

The cheapest way to handle property maintenance is by finding a good ‘odd job’ man. This is basically someone who has skills to complete most of the general maintenance tasks around the house.

For specialist jobs such as roofing and electrics, you can outsource to professional tradesmen.

 Finding tenants – this can be outsourced to a letting agent.

By outsourcing the tenant finding you will save yourself a lot of time as you will no longer need to organise property viewings, interview tenants, apply for references etc

 Handling calls and general administration

If you are not able to afford a full time assistant, you can hire someone part time to handle any business enquiries.
An alternative to using a traditional assistant is to hire a virtual assistant. This is a great cheap alternative as you only pay for the virtual assistant’s time on your jobs, rather than a fixed income per week.

A virtual assistant can not only handle your phone calls, but can also be used for general secretarial tasks including answering your emails.

You can find a Virtual Assistant by for example, doing a Google search and choosing a firm that you can work with.

The only job I would recommend you don’t fully outsource is that of property sourcing.

Finding your investment property at the right price is the primary role of a property investor. If you were to outsource this, you could be in danger of losing your business.

However, you can still use property finders to source properties – but this would be to supplement your activities in this area, not to replace them.

Your business will only grow if you focus on it on a daily basis. Leave the subsidiary tasks to the specialists as your time is certainly worth more than the £10 an hour you would pay a painter and decorator.

You should aim to develop your property business into a fully automated system. This way, you can remove yourself from the business and the business would still continue to run without you, on autopilot.

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Your Goals Make You Who You Are!

 

If you want to get anywhere in life or business, it’s vital to have self belief, i.e. you need to sincerely believe that you will achieve your goals and aspirations.

Without belief in yourself, there’s a high possibility of failure. The following article speaks for itself:

“An old Amerindian legend tells of a brave who found an eagle’s egg one day and put it in a prairie chicken’s nest. The eaglet hatched at the same time as a nest full of prairie chickens saw the light of day, and grew up alongside them.

All his life the young eagle did exactly what prairie chickens do. He pecked for insects and grubs in the earth. He clucked and cackled exactly like a prairie chicken. And when he flew, it was always in a cloud of feathers and only for a few yards at most.

After all, that’s how prairie chickens fly. The years passed and the eagle grew old.

One day he saw a magnificent bird gliding high in the cloudless sky. Gracefully the huge bird rode the air currents, hardly moving his great golden wings.

"What a beautiful bird!", exclaimed our eagle to his prairie chicken friends. "What is it?"

"That’s an eagle, the king of birds," clucked his neighbour. "But you better forget about it. You’ll never be an eagle."

And so the eagle forgot all about the magnificent bird and died, thinking he was a prairie chicken.

Most people live life as a prairie chicken because they believe they are something less than they actually are, or could be.

They slave hard at work, for little money, in a job that they think is secure, only to retire old on a pittance of a pension. They look at successful businessmen and entrepreneurs who’ve made if for themselves, but are constantly told:

“You better forget about it. You’ll never be a millionaire!”

This is not the way to live your life. If you want to be an eagle, you need to start thinking and acting like one NOW.

With the above in mind, you need to sit down and set yourself some clear goals. When setting your goals:

*Decide exactly what it is that you want. For example, if you are an aspiring property investor, one of your goals could be:

“Buy a £100,000 property with no money down, before 1st August 2007”.

*Write your goals down. Merely thinking up a goal and leaving it in your head is never a surefire way to success. To guarantee certain success, you MUST write it down.

*Create a deadline for your goal

Having a deadline will help your goal become more realistic.

For example,

“Buy a £100,000 property with no money down” has no sense of urgency and hence has a high chance of failure.

*Create an action plan to achieving that goal.

For example,

1. research my local areas for properties up to £100,000
2. visit local estate agents to arrange viewings
3. develop my marketing plan to bring in possible deals
4. set up my finances
5. organise my legal team to handle the purchase
etc.

An action plan will greatly enhance your chances of success as it helps break a larger goal into easily digestible chunks.

Once you get into the habit of actively setting your goals and truly believing that you can achieve them, you will find to your amazement that you consistently meet your targets and reach the dizzy heights you previously thought you were incapable of.

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