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New Year - New Me
Posted by Ed on 4 January 2018
First news article of 2018! And I’m sure you will read many posts on social media about making this year better than the last and how everyone is starting the new diet, joining a gym and all those other repeat promises that come around every January since time began. The good point about the new year is that everyone takes a look back and reviews themselves and has a look at where they could make improvements and become better, healthier people so that’s only a good thing right? Well what about if we take a look back at our year and try to become better, wealthier people as well!

As well as reviewing your diet and exercise regime, shouldn’t we also be reviewing the performance of our property portfolio? With the banks offering little in the way of a return on any savings, share buying being an unpredictable market place and gambling a sure way to end up with no money the saying “safe as houses” couldn’t be more true providing you do your research or use a company like Haus to help guide you in the right direction. Here are my 4 tips for better property investment this year for both existing buy to let investors and new speculative investors too;

Existing Investor

1. SHORT TERM RETURNS - Review your existing portfolio and find out how much you have spent and compare to the gross income received to find out what kind of return you are receiving. With the poor return property (normally any property with a gross return of 6% or less) – without knowing how the portfolio/property is performing we don’t know where to start improving it. Many seasoned investors won’t consider any investment under 8% gross yield.

2. LONG TERM RETURNS - Is it likely – and be realistic here, that there will be a good chance of any increase in its property value over the next 5-10 years? Get an independent sales valuation too as you are under no obligation to sell. If the property has a poor short term return as in step one above AND it is unlikely to increase in value in the longer term then this should be a property you look to offload when the time is right for you.

3. SELF EVALUATE - Be very honest now and look at your property as a renter with unbiased eyes and not as a property you own…could the property be improved to increase the income and therefore improve the short term return? Would some re-investment of the money made so far help also improve its saleability and increase its chances of being more successful in the long term return too?

4. MAXIMISE - While the rental market value continues to increase in Liverpool there are many tenants who have been in situ for a long time where landlords feel obliged to maintain the rent to that which was agreed 3, 4 and sometime I’ve heard of 5 years ago!! As much as retaining a good tenant is important it’s also more important that the investment is a good one for you and maybe a quick change over of tenants and a higher rental income is what makes this investment turn from an ok one to a really good one. This in turn can make it more attractive when selling on as an investment too.

Newbie Investor

1. LOCATION – Chose an area that either you know well or that you have done a good amount of research on. Would you know what a good sale price is? Is it in a good rental demand area? If it’s a house you are buying it is likely to be a family so they will need amenities such as schools, parks, a local shop or supermarket. If it is an apartment then it’s likely to be a professional couple who generally want parking, good transport links and even a good phone signal (yes people do check this on viewings now, nobody likes a deadspot)

2. FREEHOLD or LEASEHOLD – Know the difference and expect that any leasehold property is likely to have a monthly, quarterly or annual charge for ground and service maintenance costs which you have to pay. It is not the tenants responsibility to pay it. This additional cost will factor in on the return on your investment as a cost but also remember that apartments can be good for capital growth in the right areas. Also make enquiries as to what’s included for this service and enquire as to the annual increase on these costs as if they go up 5% per year, then doesn’t your rent need to as well to cover your additional costs?

3. COMPARABLES – Once you have found an area and some property, have a look for comparable property that’s already rented using major sites like Rightmove and Zoopla, how much have they rented for, how long have they been advertised for? Anything that has been advertised for longer than a month and is still available is either a sign it is priced too high or the condition of the property isn’t up to standard. Also look at active live listings, do a drive around the area and count the number of boards within a quarter mile radius as a lot of letting boards normally indicates lots of competition and high turnover of tenants which affects you income and therefore return.

4. AGENT OPINION – Contact Haus Liverpool to discuss the potential lettings income for your investment BEFORE you make an offer and we can give your opinion on the location, the rental demand, the rent income and let you know of you obligation as a landlord so things are done right!

CALL US TODAY ON (0151) 559 1111 for a no obligation chat about your property investment!
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