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How To Search For The Best Property Locations

 

If you were to look at 100 properties, you may end up buying one good deal! Property is very much a numbers game. The more you look at, the more familiar you’ll become with your market and the chances of you finding an absolutely amazing deal are greatly enhanced.

As a serious property investor, you should be looking at property every day – if not physically, you should be analysing deals in the local property paper or online. Using the latter method, you will be able to literally analyse hundreds of deals in one sitting. If you’re not already familiar with several locations you might want to invest in, I would recommend you start doing some research.

Call several agents in your area, visit local property websites and check the local paper to help you to familiarise with the market.

Prior to investing even 1 penny of your hard earned cash, you need to verify that there is market for your property for your preferred tenant class. There is little value in buying a property and then deciding whether you can let it out or not.

The best locations for your property will depend on your target tenant. If you want to rent to students then you will need to source a property close to a large University or College. Alternatively, if you want to rent to professional tenants then you will need to provide a house close to a large employer or within easy reach via good transport links.

As a rough rule of thumb, you should always try to purchase properties in ‘up and coming’ areas with good transport links to the local employers. The properties tend to be cheaper here, and with the added benefit of HUGE growth potential. Furthermore, tenants don’t mind living in these areas for slightly lower rents than they would otherwise be charged in more prestigious locations.

When looking for these ‘hot spots’, you should firstly look at locations adjacent to ‘nicer’ areas. Scour the high street of these areas looking for new shops that are opening up, for example Marks and Spencer’s or ‘trendy’ coffee bars.

Place ‘ghost’ adverts in the local paper advertising for a property that you do not yet currently own. If you only receive one phone call for a 4 week slot, then you can safely say that the location is not a tenant hot spot. However, if you receive 20 phone calls a day for a week, you can probably risk a bit of money and buy in this location!

 

 

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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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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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Utilise Your Tenants

 

Every property investor will agree that without tenants you do not really have a property business.

Your tenants will pay the rent set by you. This rent will be used to pay for:

 Your mortgage repayments
 Recurring property maintenance
 Fixtures and furnishings in a furnished property

Any money left over will be used by the property investor for

 Advertising
 Finders fees for further property acquisitions
 Further acquisition financing costs
 Legal fees
 etc.

As you can see, there are numerous expenses here. To be successful, you need to treat property investing as a business and not just a hobby.

I know of a lot of people who have tried property investment only to find that their costs far exceed any income – this is certainly NOT the right way to run a successful business.

As with any business you need to look for ways to reduce costs or increase the income. Now the only way for you to increase the money coming in would be to increase the rent. This is not as easy as it may at first look.

If you were to increase the rent over and above the rent dictated by the market you may never be able to rent out your property. A tenant will only ever pay market rent unless your property is one of the best properties on the market and in an exclusive area where it is very difficult to find rented accommodation.

Unless your property meets the above two criteria, I would forget about increasing the rent. You must therefore focus on reducing costs.

One way to reduce costs is by making the best use of your tenants.

For example, you could ask your tenants to do a lot of the simple upgrading tasks on your property for you. I’ve often asked tenants to paint my properties for me! If I supply the paint in a colour that is agreeable to both myself and the tenant I find that they are only too happy to paint the house for me.

By painting the house, the tenants feel more involved in their property and also house proud; hence they often stay longer resulting in fewer voids.

I also make it clear to tenants that I am looking for other properties in their area. If they know of any vendors that may be looking to sell, please let me know. This is another way to find that elusive deal. I am happy to pay the tenant a finder’s fee for this service.

Finally, when a tenant decides to move on, I ask him/her if they know of anyone that might want to rent the same property. I normally ask them to put a notice up at their place of work or local pub.

Again, I will offer the tenant a small financial incentive if they are successful in finding me someone.

This financial incentive is far less than it would cost me to advertise the property, hence I’m saving money straightaway.

I’m sure you can probably think of a few more ways your tenants can help you run your business. The bottom line is that you must treat your tenants as an asset and help them help you grow your business.

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Where To Buy Your First Investment Property!

 

“Location Location Location”

The location of your buy to let property is one of the most important variables you need to consider when looking for your first investment property.

Getting the location right will mean a steady flow of good rent paying tenants.

However, if you make a mistake with the location you could be faced with long voids, damaged properties, and disruptive and possibly even dangerous tenants.

One of the first things you need to do before buying your property is to gauge whether there is a market for your choice of property in your location. NEVER buy in an area where there is little or no perceived demand.

Whether you are investing in HMOs (Houses in Multiple Occupation) or single family properties, I find that if your location is good, you will always exceed your expectations when it comes to finding good reliable tenants.

In the past 10 years, I have found that the market for sharers has increased significantly especially in sought-after cities with good work opportunities and transport links.

I find the following types of people wishing to share with others:

• 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.

I get several calls a day from the above types of potential tenant looking for individual rooms to let in a property. The same is true for young families who cannot yet afford to buy their first home and are looking to rent smaller 2 to 3 bedroom houses.

So how can you guarantee that you will easily let your property once you have completed on the purchase?

Advertise

If I am unfamiliar with the location of my anticipated purchase, I will normally place an advert in the local paper advertising for my particular tenant type. For example, if I am looking for professional sharers, I will state so. Conversely, if I am looking for a family, I will indicate this in my advert.

I normally place adverts for a minimum of 4 weeks. If I receive just a couple of calls in the 4 weeks, I will most likely not invest in that area. However, if I receive 10s of calls for my proposed property, there is a greater chance of me buying in that location.

When answering calls from tenants, I will always ask them questions to help me complete my market research. For example, I will ask them specifically what they are looking for. Which particular areas and streets are they interested in and why? What size of house would they prefer to live in? In the case of sharers, how many people are they happy to share with etc?

Getting these types of questions answered by my potential tenants is valuable in my search for the ideal property in the ideal location.

If I am looking specifically for a student tenant, I will visit the local university and not rely purely on advertising.

I will:

• Visit the University Accommodation Office and ask them what the best locations for student properties are. Always buy in these locations even if they are more expensive than others further down the road.

The university is very knowledgeable on their local areas and if they don’t like any particular location, be sure that every single student on campus will know about it!

• Try not to buy my student property in a location greater than a 20 minute walk from campus.

Students have become lazier and more demanding over the years. They prefer to hop out of bed at 8.55am for a 9am lecture.

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