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Property Investment In The UK

 

Ignoring the recent blip, property investment in the UK has witnessed massive growth over the last decade. A house bought 10 years ago, would be worth around 300% more today. If you were to look at house price growth over a longer period, you’d be amazed by the results. For example, if you had bought a house in 1952, today it would be worth around 90 times more!

At an average growth of 8% per year, a house bought today for £215,000 would be worth in excess of £1million in 20 years! 10 houses bought today for £215,000 each would be worth…….etc.

Even today, as the market shows some evidence of slowdown, there are pockets of above average growth in certain towns and villages across the country. It’s the job of the property investor to hunt out these areas and milk them for all they’re worth.

When looking for property to buy in the UK, it is always advisable to do some research before commencing any viewings. Recent statistics on house values in any one particular area, historical data and local trends can help you to build a clear picture of the suitability of any one location for investment purposes.

A common misconception among novice property investors is that you can only really make money in property when house prices are going up in value. In this scenario, you would buy a property for x amount and resell shortly after for x+growth amount, pocketing the difference in value. If the market was flat, your property would still be worth x several months later, i.e. exactly how much you bought it for. When house prices are going down, your property would be worth less several months later, e.g. x-growth.

However, any experienced investor will tell you that you can make money from property investment regardless of whether house prices are increasing, decreasing or whether the market is flat. By buying well below market value, you would safeguard your investment from any short term economic trends that would normally affect your property’s value. You would also gain immediate equity in your property investment.

When deciding to embark on a career in property investment, as with anything else, you need to educate yourself. You can do this by attending seminars, attending courses and meeting others in the same field. Talk to real estate agents, brokers and lenders to gain a good basic understanding of current and future trends in property investments. Furthermore, take advantage of free online courses and material to learn the ins and outs of property investment.

Property investment is not rocket science. By learning and applying just a handful of basic principles, there’s no reason why anyone can’t benefit from the UK property investment market.

 

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Advertise To Source Below Market Value Property

 

One of the best methods to find below market value property is through advertising. Placing classified adverts in your local paper should be part of your overall game plan to locate motivated sellers.

A motivated seller is basically someone who needs to sell his/her property very quickly due to circumstances beyond his/her control.

These circumstances could have arisen through for example divorce, death or debt.

When anyone experiences any one of the above, they may be ‘forced’ to sell their house and more often than not will need to sell very quickly. It’s this speed of sale that is more important to the seller than the final price achieved. This is why a sale via an estate agent may not be the best option for the vendor of the property.

These motivated sellers often turn to adverts in local newspapers to look for prospective purchasers of their property. If you’re not advertising in that paper, you could be missing out.

If you are financially constrained, don’t buy a half page colour advert! Try a small black and white advert first. I’ve known simple monochrome adverts to work just as well as their colour equivalents.

Test the market by changing your headline every week until you find one that works best for you.

When first deciding on the wording of your adverts, it is best to look at what your competition is doing. Try and find adverts that appear every week and emulate their style. These adverts obviously work otherwise they wouldn’t be used over and over again.

One thing to try would be to literally ‘copy’ a successful advert that appears every week. All you need to do is change the contact number at the bottom of the advert. Done effectively, you will ‘legally steal’ half of the original advertisers market!

When it comes to advertising in the paper, please be aware that success will not come overnight. You need to be persistent in your efforts, and continually test your strategies.

Also, an advert that may work very well in one paper may be a dud in another. You can avoid making expensive mistakes by continually trying different variants of your advert. I can’t stress this enough.

Once you have a successful advertising strategy, you will find that you are dealing primarily with motivated sellers. This will enable you to grow your property business very quickly and with very little of your own money.

 

 

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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.

 

 

 

HMO Property Riches Book Javaid KiyaniClaim your FREE Property Course here:

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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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