Unemployed - Become A Property Investor

Property Investment On A Shoestring

The unemployment figures published in the press at time of writing do not make good reading. Record high unemployment figures of 5.5% are set to increase even further.

Estimations for recovery look bleak with experts predicting 2 million people will be unemployed by 2009.

The Office of National Statistics (ONS) say the number of people claiming job seeker allowance has risen from 32,000 to 900,00 since July. Nearly 30,000 people are applying for job seekers allowance a day.

What Has This Got To Do With Property Investment

In times of economic troubles all forms of investment seem at first glance a very risky proposition. The stock market certainly is a gamble in the present climate. But what of property.

The UK has one big advantage where property and a potential investor is concerned - the UK is an island and so demand will always outstrip supply. There are not enough houses built or being built to meet the demand.

This may seem total nonsense after what you are no doubting reading and listen via the media. Any kind of investment opportunity in the housing market may appear foolhardy. This is a wrong perception.

Currently, property can be purchased at well below market value - this is an ideal scenario for a potential investor. The problem lies with borrowing from a lender - it has been much discussed that UK mortgage companies and lenders are tightening the criteria and cutting back on mortgage products.

The buy to let market is fairly unaffected - with a majority of mortgage lenders approving buy to let mortgages over and above the typical mortgage for the individual or family to buy to live in. The reason for this is the the buy to let mortgage is considered less of a risk. In times such as the one we are currently experiencing will always fuel the need for tenants.

How To Buy Property For Practically Nothing

If you are currently unemployed what better way to join the workforce again than by employing yourself - as a property investor.

Property investment is not complicated and does not require huge some of money to start. Property investment is not property development

The chances are you probably did not realise that it is possible to acquire a property with a No Money Down Deal - you could recieve a 100% loan from a bank or lender that requires no deposit. All that is needed is a tenant or proof that a potential tenant can cover the cost of the monthly repayments.

Property Investment is not just for the cash rich but does require training and knowledge - if you would like to find out more about property investment on a shoestring - click here

Property Investment Vs Property Development

Property Development Or Property Investment

Property development and property investment could be classed as one and the same in some quarters - but in reality they are a quite far removed.

Property development is best hightlighted by the televison programs that frequent our screens such as Property Ladder and How To Be A  Property Developer. A residential property is acquired below the market value due its state of disrepair and then developed into something that can be offered for resale or to the Buy to Let or rental market.

Profit is made (or lost) by the developer but time has to be factored into the equation as development is very much hands on and linear. Many individuals that are property developers can only concentrate on one project at a time.

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Property Investment on the other hand is all about the rental market and is completely scalable.

Why Property Investment Is More Profitable That Development

The ideal starting point for a would be or potential property investor would be to research properties in your area - visit local estate agents and ask to be put on their mailing list. Ideally pick a dozen or so properties that will not take up too much of time firstly, to initially view - and secondly to visit should the need arise.

The type of properties to avoid are flats or apartments where you may need to factor in the cost of ground rent or communal maintenance - this monthly cost will come out of your profit.

It is important  to remember that your profit is not based on the potential of your equity rising in years to come but a solid monthly profit from the rental.

Once you have found the formula for success it can repeated over and over again.

Property Investment is by a better option and by far a better use of you time and capital.

Best Mortgage For Buy To Let

Buy To Let Mortgages

If you just starting out in the property investment market and completely bemused as to which type of mortgage to choose for your buy to let property, there are specific mortgages for Property Investment - i.e. to rent out rather than live in - you will need a buy-to-let (BTL) mortgage.

Buy to Let mortgages are unique and quite different from the mainstream mortgages as, instead of assessing the amount you can borrow from a lender, based on your income, loans are calculated on the rent you could get for the property.

In the past mortgage lenders required a rental coverage that was above that of the mortgage amount, for example 120 % of the monthly repayments. But lately the rules have become more relaxed and you can get a mortgage with rental coverage of 100 per cent in some cases. The credit crunch is seeming to work in favour of the property investor compared to the standard residential mortgage.

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However, it is still usual practice to have to raise a deposit of 10% or more, but more recently the number of No Money Down deals have populated the market.  Traditionally only a small number of specialist lenders offered BTL mortgages but more recently we have seen high street banks start to lend to landlords.

BTL mortgages can normally be either repayment or interest-only loans. Interest-only mortgages mean cheaper monthly payments but the property will not be yours at the end of the term – you will still need to repay the capital amount or sell the property. Repayment mortgages ensure that you repay a bit of the capital and a bit of the interest each month and at the end of the term the debt is fully paid off.

If you have have ambitions in the Property Investment martet and would like to find out more information about Buy-to-Let mortgage option you can register for a Free property Investment Workshop in your area.

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How To Be A Successful Landlord

Advice For For Landlords

A decade ago anyone with the slightest entrepreneurial spark would have been highly advised to get involved in the property development or property investment market.

The life of landlord was an easy one - the life of a new start up landlord was made easier by mortgage lenders ready to throw money at the mere mention of  Buy to Let.

A decade on and the life of landlord is still relatively easy - despite the doom mongerers, landlords in many UK regions have only suffered a slight drop in the price of their property assets. Many landlords consider their equity to be a long term investment with the monthly rentals their earnings or wages.

In fact, many landlords have enjoyed a higher monthly rental income from their Buy to Let properties as the current housing market has dictated that renting rather buying makes economical sense to the first time buyer or those at the bottom end of the property ladder.

So How Do New Landlords Start And Survive

Recently the NLA - National Landlords Association offered advice to its industry and gave tips on how to survive the credit crunch.

The tips for landlords are based on the assumption that the landlord has a property and is about to offer it into the property rental market.

1. Get Advice - a little knowledge is a dangerous thing especially where money is concerned. A good investment can turn bad if you don’t plan for as many eventualities as possible. Joining associations such as the NLA should be a prerequisite - The NLA has over 13,000 throughout the UK and has the new start landlord and the experienced among its members. Visit The NLA Website

2. Understand Your Legal Obligations - another reason to join and an association such as the NLA. The private rented sector is now governed by over 50 Acts of Parliament. With this increasingly heavy regulatory burden, it is now more important than ever that you, the landlord understand your legal responsibilities.

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3. Make The Most Of Your Mortgage - its may appear obvious but some landlords struggle with their current mortgage repayment without investigating other avenues. If you are at the end of a current term and the repayment plan doesn’t look as attractive - try commercial finance opportunities.

4. Choose Your Tenants Carefully - it is essential that as a landlord you don’t rely on gut feeling. Check out prospective tenants thoroughly. Perform a credit check and and search for previous tenancy information.

5. Talk To Your Tenant - all relationships work better with communication. Don’t just contact your tenant about rental matters, he or she is your customer and so treat them like one.

6. Students Make Great Tenants - don’t shy away from letting your property to students. Provided you have employed the services of letting agency it makes economical sense to let to 3 students rather than a family of three.

7. Put Money Aside For Repairs - rental income is not pure profit. just as in any residential property things will need replacing or repair such as a new boiler, carpet or window. If finances allow put aside 10% of rental income for miscellaneous repairs.

8. Get Insurance - get adequate cover for every eventuality. Standard household insurance policies may not cover a buy to let or rental property. Specific industries requite specific insurance cover. Property investment insurance companies such as ForLandLords have been set up with the Landlord in mind. Visit  ForLandLords website.

9. Listen To Advice - television programs such Property Ladder are built for TV granted but they do highlight that even after advice has been given it is often ignored. Remember if you are new to the whole landlord scene - there are others that aren’t.

Property training companies such Property Mentor offer Free property training courses and seminars. Visit  Property Mentor website

10. All Of The Above - the 9 above points are of equal importance. Putting money aside for repairs is of little consequence if you as a landlord are not properly insured.

Rent Your Home to Solve Housing Worries

Want to move, but trapped by the credit crunch?

Renting out your home may be an interesting solution to investigate, if you want to keep moving up the property ladder. And it’s not a crazy as it might sound at first…

Currently we’ve got a property market with low property sales, but high rental prices. Which make a good combination for shrewd investors. This could be a perfect way of side-stepping the market log-jam and moving on - rent out your current home; let the tenants cover the mortage; and buy again.

If you bought your property more than 4 or 5 years ago, it’s likely that the rent you could earn on your home could more than cover your monthly mortgage costs, because rents are currently high. At the same time, property prices are dropping, so it makes no sense to sell your property at the moment. Unless you’re willing to risk the capital appreciation that might have accrued up till late last year.

A recent letting report from RICS shows new instructions at letting agents are at an all-time high; and estate agents noting an increase in new landlords letting their own homes.

How to Capitalise on the Rental Market

Here are a few things to consider before you become a landlord:

Firstly, you need to understand your market. If you’ve got a three-bedroom house, well-maintained and well-located for schools, you’re in a good postion for a family or corporate let. If, on the other hand, it needs some tidying up and it’s not to such a high standard, then you’re better offering it to a younger family or flat-sharing.

Speak to local estate agents, who would know your area , and know what kind of rental prices your property could realistically achieve.

Don’t go out and buy furniture for tenants. It’s likely they have their own. But if someone does come along who wants to rent it furnished, then be prepared for a small outlay. Be flexible in other ways – if you don’t have a power-shower, but a prospective tenant says he’ll commit for a year if you install one, consider it might be worth spending the £300 to secure them.

If a tenant is willing to commit, but at a slightly lower rate than you’ve set, again consider if it makes sense to let your property out at the lower price, rather than run the risk of going a full month without any income. If you’ve got several prospective tenants, this won’t be an issue.

A few more things to consider before renting out your property.

You’ll probably need to convert your existing residential mortgage into a buy-to-let mortgage. At the very least, check the terms of your mortgage, and place a call to your mortgage company to let them know your intentions to rent out your property.

You’ll probably need at least a 10% deposit saved up to place as a deposit on your new property since it’s hard, if not impossible, to find 100% or even 95% mortgages any more.

What’s the Downside?

You’ll need a legally binding contract drawn up. Although a bit of searching on the web will turn up numerous law firms who specialise in downloadable legal documents - including short-term assured tenancy agreements.

Recognise or find out your legal responsibilities - in terms of the safety of your home. Particularly things like gas appliances that require annual inspections and certification by a Corgi-approved technician. If you do let your property out furnished, or partially-furnished, the furniture must meet or exceed any current fire regulations; and any electrical appliances must be checked for safety.

In your calculations, you need to factor in any costs you might have to cover when the tenants leave - from a little bit of re-decorating, to repairing fixtures and fittings, to replacing carpets.

Understand thaere is a lot of uncertainty in the market. There seems to be a glut in tenants right now; with rental prices very high. As teh property market stabilises, this could change, meaning a drop in possible rental incomes, or less tenants looking to rent your property. So you need to consider your possibilites and ability to cover tow mortages for a few months if need be.

What’s your first step?

Talk to someone who has done this. Or someone who can really help and guide you through all the different things you need to consider. After all, it’s a bit more than just decorating your house in a neutral shade throughout.

There are a number of property investment seminars that are held throughout the UK, which you could attend to hear more about becoming a landlord, and to ask questions - to see if this could be a viable way for you to move up the property ladder.

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5 Reasons Why Houses Prices Are Falling

Why Are House Prices Falling

The housing market in the UK is in freefall currently, in stark contrast to the buoyant property market scene of just a few years ago. But why are house prices falling and are you concerned about the negative equity that your home presents you with.

Throughout the nineties and midway through the 21st century the UK property market enjoyed its biggest ever boom. Our homes it would seem were our biggest asset. This though was a false sense of economy as most would never realise the equity in our homes as to move would negate the profit gained.

1. House Prices Are Unaffordable To First Time Buyers - First time buyers are finding it increasingly difficult to get onto the first step of the property ladder as the average house price to earning ratio are now poles apart.
2. Mortgage Lenders Are Not Approving Finance - The phrase Credit Crunch applies to the mortgage industry more than any other. Applications for mortgages are fewer and more mortgage applications are being rejected.
3. Interest Rates Increasing - Interest rates are increasing with velocity, the average monthy mortgage repayment has risen by 30%. This effects first buyers and low wage earners who are now in danger of repossession.
4. Unstable Economy - Any rumour of an unstable economy and one of first industries to be hit is residential property market.
5. What Goes Up Must Come Down - the last decade of phenomenal growth had to slowdown sometime, an initial slowdown is viewed as a negative - the knock on effect is panic, reduction in consumer spend and eventually a credit crunch situtaion.

Is Now A Good Time To Invest In Property

If you intend to move house or buy a property for the first time for the sole purpose to live in it may be wise decision to not do anything yet. House prices will probably continue to fall for the forseeable future - then recovery is expected.

For the property investor now is the perfect time to invest in property both residential and commercial. The Buy To Let market will increase dramatically as tenants will outnumber available property.

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Solving the Property Investment Puzzle

Fitting Together the Pieces of the Property Puzzle

With all the different opinions on property investment, house prices, inflation, recession, and what’s going to happen with the property market, it makes it difficult to work out a viable strategy to profit from property investment.

Even though house prices may be falling in most regions, the rise in rents since April has kept many landlords in the game - and in profit - particularly since the rise in rents has helped increase their gross yields.

RICS spokesperson James Scott-Lee said:

“The lettings market is booming with many vendors opting to rent their property while sales in the housing market continue to dry up… Becoming a landlord is now an increasingly profitable option with rising rents and yields offering good returns.”

It seems that established and savvy investors have been reaping the benefits of the housing downturn for some time now, and will probably continue to do so.

But there are still quite a few hurdles to cross, before you can be certain of turning a profit in these uncertain times. Many people may be reluctant to enter the market right now, which could be a blessing for those with the foresight to profit from property, buying low and either renting or simply waiting for the markets to turn once again.

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Students Still a Good Bet?

There are certain areas that tend to remain buoyant, despite other market forces at work. These are cities where a lot of re-generation is taking place, and top student and university towns. As far as property investment from rentals, it seems that places such as Nottingham, Durham, Bangor, Manchester & Hull remain well above average, with yields far better than other areas of the country.

Although many investors may think that this is a weak property market at the moment, research is showing rental yields are on the up, and buy-to-let investors have an interesting opportunity to take advantage of the increasing demand for student accommodation, whilst capitalising on the lower house prices.

As Nick Clark, Managing Director of the Property Investor Show said recently:

“There will always be a sustained demand for properties which will produce a far greater annual rental yield than the average buy-to let property. In fact, it could be as much as six to seven per cent more.”

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Buy To Let On The Increase

Buy To Let Property Is A Good Investment

As housing prices continue to tumble the buy to let or lettings market is sharply on the increase - this is according to the Royal Institution of Chartered Surveyors (RICS)

As mortgage lenders are becoming more choosy as to who they grant mortgages to - the buy to let market is benefitting from the current market conditions.

Would be borrowers who are struggling to obtain a mortgage, are now forced into the property rental market - a real boon for anyone who has bought property to play in the property investment game.

Demand in the rental or buy to let market is outstripping demand in all areas of the UK - massively.

Buy To Let Markets Biggest Increase In 10 Years

The buy to let market has enjoyed its biggest and fastest growth rate in 10 years with no sign of a slow down over the coming month. If you are thing of buying a property as an investment - now is the time do it

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London is traditionally the busiest and most successful of the UK regions for the buy to let market but quite remarkably it is the North that has enjoyed the highest and fastest growth rate.

Scotland has experienced the slowest growth rate and the most stable market conditions.

House Prices Fall, Rental Prices Rise

Despite the media negativity towards the housing and property market in general, it’s the residential property market that’s suffering the most; and in particular the residential property owner who’s sole purpose is to live in his or her property.

The state of the buy-to-let market means that landlords can now charge more for their rent and so balance out the fall they’ve experienced in the equity of their investment.

All in all the landlord is not suffering. The wise property investor is buying more properties or preparing to invest, as house prices will soon reach a low point where there the next fluctuation will be generally up.

Have you got ambition to get into the property investment market? The property investment market is a very profitable one provided you invest wisely.

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Is Buy To Let Still A Good Investment

Buy To Let Investments In The UK

With interest rates rising, inflation going through the roof and mortgage lenders becomming fussier by the day is buying to let still a good investment?

The UK property market is under pressure and the media tells us our are homes are under threat throughout this latest period of economic doom - the Credit Crunch is truly taking a hold.

So what of the entrepreneurial spirited who either has one or more buy to let properties and one or more buy to let mortgages is it time to press the panic button and bale out - if they can.

Most of the buy to let ‘ers we have spoken to remain relatively calm it is not as if they have lost the lot on one spin of the roulette wheel.

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Any invetsor will tell you the high’s and low’s are part and parcel of the property investment game. “It would have been good to sell some properties at the start of the decline but hindsight is a luxury we do not have.” says David Forster a home based property investor. “I got into the property investmarket at the beginning at 2003 when mortgage lenders where literally throwing money at investors - times have changed now but experts predict the good times will be back. It is just a case a riding the strom. While house prices are in decline, now is good time to buy again”

The Future Of The Buy To Let Property Market

At the time of writing the buy to let market is becomming one where only the strongest or smartest will survive.

Mortgage lenders are removing buy to let products at an alarming rate - it is estimated that only 25% of buy to let products are still available in comparison with this mid 2007 many mortgage companies have now withrawn products and lenders are asking for much higher deposits.

The one man band type property investor working alone will suffer with the experienced multi property owners will still able to keep thier heads above water - but only just.

With house prices expected to hit rock bottom sometime soon the only way is up. The smart investors are ready to pounce.