Blog

Archive for May, 2009

Writing Property Rental Listings Successfully

May 29, 2009

These days more and more tenants are on the look out for rental houses and the rental listing sites are flooded with rental property. In such a situation, you must make some extra efforts in order to distinguish your rental property from dozens of others; some similar houses on rent may just be in your very own neighborhood. If you go through the current rental listings on websites, you will not find it hard to observe that they all contain a traditional stereotype pattern. In order to ensure that your rental listings successfully pull tenants, make a few changes to make your listings unique and tempting.

Pick a Catchy Listing title

It is essential that you should start attracting the tenants from the very beginning. Rather then going with the conventional listing titles like $850 – 1 bd/1, make your title count and use catchy words. The importance of the title must not be underestimated; unless it appeals to the tenant, he/ she will not bother viewing the rest of the details.

It is beyond doubt that you must keep the title short, but still you have the margin to play with tempting words that impart vital data to tenants. You may desire to mention the number of bed rooms in your house, but mentioning a unique feature of your house will give your rental listing a cutting edge over the rest. Some important features that deserve a place in a good title include on-site washer and drier, car parking facilities, a good location, a nice view, superior décor or any other facilities which you desire to put across to your tenant. You can also enhance the distinctness of your property by mentioning places like gardens, conservatories, bar etc.

Keep Your Listing Specific and Make the Right Use of Adjectives

While writing your buy to let listing you should go all out and give complete information about your house with all its advantages and merits. Use of adjectives in description of your house also counts a lot. Rather than using common adjectives like “nice” or “amazing”, you need to use adjectives like “bright”, “classic” or “modern” which help the reader imagine those features in his/ her mind.

Tenants are more attracted to listings which give a clearer and unique description of the house, and you can achieve this goal by making the right use of adjectives.

Mention All the Details

It is definitely worth mentioning all the necessary information and distinctive features of your house and the surroundings to tenants. Although only these unique features will not guarantee seemingly trivial facts like a house on a quiet street or close to shopping centre may also tempt tenants. As your listing will play a defining role in convincing the tenant, it is important to take time while finding words for it. It is sometimes possible, that we fail to find the best features of things which we love the most, and you must make sure the same does not happen in case of your rental property.

‘Seeing is believing’

The famous proverb ‘Seeing Is Believing’ is not all that incorrect and giving nice pictures of the interior and exterior of your house will force the tenants to contact you. This is important, especially in case of gumtree as it provides an instant snap shot of your property.

It is advisable that you always keep some nice and presentable pictures of your house so that you can use them in future. The last thing you want is to be taking pictures of an untidy property when an existing tenant leaves and be using those pictures to try to attract tenants. This can be a major set back to your campaign to find a new tenant; therefore, ensure that you have a clean set of pictures handy that you can use to advertise while you clean up any mess behind a leaving tenant

  • Share/Save/Bookmark

Importance of tenants for property landlords

May 28, 2009

I have mentioned in another article how easy it is to be successful in property. If we break it all down, it boils down to 2 main factors; 1.  knowledge and 2. having the drive to be able to put the knowledge into practice to achieve the rewards. We are not talking rocket science here, but just the application of the right knowledge correctly with determination and drive. If you can do that, then the system of property investment becomes pretty straight forward.

In the case of buy to let property investment, a straight forward system in a nutshell means buying the right property at the right price and renting it to the right tenant. Here I want to mention the importance of looking after your tenants, as the tenant who occupies your property is the single most important relationship that you will have to develop a successful buy to let property investment system. It is the tenant who forms the cogs of the wheel.

When you go and buy an investment property, you can borrow hundreds of thousands of pounds to acquire a deal and it is our tenant who is actually going to pay that money back, not you, not your mortgage broker, not your solicitor or any one else for that matter. You tenant is the one person who will give you money, no one else will. Your tenants are your clients and they are ones who deserve the most respect out of anyone else you deal with. The rental properties that you buy are their homes. Tenants are great people who give you money month after month so you can keep the bank happy by repaying your buy to let mortgage. Aren’t they good? Yes indeed so give them respect for what they do for you. If they are not there, then your buy to let system isn’t going to work. It is your tenants responsible for your success so respect them as much as you can.

  • Share/Save/Bookmark

Should you upgrade investment property?

May 27, 2009

You have done your first ever deal on an investment property, got the keys and ready to either move in it or rent it. This is usually the most exciting part of the purchase and many new investors like to think about the possibility of upgrading the property to their taste so they can cherish the purchase a bit more. But, if the property is in good order and is perfectly habitable, is an upgrade really essential? The quick answer to the question is No! Especially of the property is a pure investment

 

If you purchase a property with the intention of living in without any consideration of ever selling then you can be forgiven to upgrade the house in exactly the way you want it, after all you are going to be living in it for a while so you may as well decorate and design it to your taste. However, if the property that you purchase is an interim step towards your dream house or a property that you are planning to let or planning to flip it for quick profit then the last thing you want to start doing is to start adding your designer touches. Forget about adding the new luxury kitchen, bathroom, a new conservatory or patios, taking such action when not needed simply means losing a large chunk of your profit in the upgrades.

 

You have to treat every property purchase as a business purchase and not to purchase to fall in love with the property. You goal is to fall with the investment DEAL not the actual property itself. Remember that you have a buy to let mortgage to take care of.

 

You should only spend money on aspects of the property that will help you realize a bigger profit. If that doesn’t happen then you are wasting your hard earned profit. And as good as you getting your cash and burning it before your eyes. By all means make the property more presentable by doing some new painting and other tidy ups, but forget the granite work tops and the designer touches, let the new owner who wants the luxuries to add them themselves. Bottom line you are in business to make money, not to take on properties to do up as in the fancy staged TV programs. These programs are “made up” and are not right for investors who have better things to do, which is buy more property and hence more profit! We are not here for fantasy and design, we are here to take on the mundane deal making tasks to constantly generate profit.

  • Share/Save/Bookmark

Anyone Can Profit from Property

May 11, 2009

Most of the people who hit the rich lists usually have one thing in common; they have used property investment to increase their wealth to greater heights. Property investment is used by the elite as a vehicle for making money and you would think to do the same you have to be ultra smart to reach these heights. But the question is do you need to be ultra smart? The answer is no! The great thing about property investment is that you don’t need to be super intelligent to make big profits; it is all about having the right knowledge and the drive to succeed. The idea behind successful property investing is pretty simple; do your research and just go out and buy.

If you look at the property price trends of the previous 10, 15 or 20 years in any area, you can see the significant price rises. If you had bought a property say 10 years ago, you would now be sitting on a handsome profit. You didn’t need to be a great negotiator, or a super intelligent to realize massive profits. We are not talking below market value property, we are talking big profits from property that you could have bought at FULL price! Buying virtually any property 10 years ago and realizing a profit now would make you seem like genius, but did you really have to be a genius to make the profit? Not quite!

In the current market we are being presented with a huge opportunity to capitalize on buying low priced property for profiting in the coming years. This is an opportunity that doesn’t require a genius to work that there is huge potential for profit. History shows that the property prices will rise on the long term and the normal thinking person in you will tell you that prices will be much higher a few years from now. Whether we reach the bottom of the declines this year, next year or whenever, a normal thinking person will know that the prices will eventually rise. So researching deals today and buying below market value property based on today’s valuations presents an excellent opportunity for massive long term profits. There are huge opportunities for an informed investor to go out into the market place and present sellers offers based on today’s prices. Do you think the rich people out there are sitting back scared of the current market declines or buying? The answer is that the richer who want to get richer are buying and buying regularly. They are making the most of the buy to let opportunities. You wouldn’t call them geniuses as this is a pretty obvious course of action to take; BUY LOW SELL HIGH!

To match the rich thinker, just do what they do, buy low and sell high! Do this a multiple number of times and as long as you don’t use your properties as a way to fund your lifestyle, you can also be sitting pretty in a few years time. Isn’t that simple or do you think there is more to it than that? Obviously you need to have knowledge to find and purchase the deals correctly but isn’t the principle easy enough? Keep it simple!

This is not something everyone will do. Why not? Because the average person will always have a reason not to work hard to find the deals and take action to go out there and grab the opportunities that are there to be taken.

  • Share/Save/Bookmark

Why buy investment property locally

May 10, 2009

If you have been dealing in property investment, or even starting out then you will know that having knowledge is power. But just having knowledge is not enough; the actual implementation of knowledge is what matters. You need to know as much as you can about your deals, especially in the property market when there are hundreds of pounds involved in each deal. You need to be sure of what property deal you are looking at and all the facts and figures to be able to make an informed decision to go ahead on an investment deal.

One way to ensure that you have as much knowledge as possible about the investment deals you do is to focus on buying property in your local area, or in an area that you know really well. If you deal in a wider geographical area then you will admit that it is impossible to fully know the investment potential of a property deal in every area. However, if you concentrate on a specific area, the chances of you having more knowledge and facts about the property are much greater.

Choosing to invest in a specific area allows you to become an expert about the values in that area and helps spotting property bargains much easier. Studying the local market trends and regularly conducting property due diligence on investment deals will eventually make you an expert in your area and becoming an expert will give you a big competitive advantage to ensure that you end up buying the best buy to let deals available. If you do regular studying and research about an area, you will eventually find that you will eventually get a good feel for the local market and ultimately help you make good informed decisions.

The key is to study and research in your chosen area to determine the regular trends and the sales values.  Regular analysis will help you become an expert valuer in your local market and it will help you spot a bargain instantly and help you negotiate the best prices.  You will develop an expertise of the local niche and being an expert of an area of even up to 200,000 people can help you pick up enough good deals to help you profit well and build a solid buy to let property portfolio.

  • Share/Save/Bookmark

Credit Information

May 9, 2009

TOPICS OF THE ARTICLE

• Establishing Credit
• Secured Cards
• Choosing a Card
• Use Credit - Have More Cash
• Balances: Pay More - Pay Less
• Consolidating & Refinancing
• Credit Reports

Credit is a strange animal. It’s good to have it, of course - but using it can get you in trouble if you’re not careful, and it’s not good to have too much of it. On the other hand, if you use your credit wisely, you can actually get more for your money and also build a credit history to help you get a morgage easier without having to apply for a bad credit mortgage.

ESTABLISHING CREDIT

Getting credit is more or less a catch-22: if you have good credit, people will offer you more credit, and if you don’t, they won’t. So aside from the occasional table in a university student center featuring cards with low credit limits and high interest rates, you shouldn’t expect to get many offers of credit until you’ve bought something on credit.

The good news is that buying something on credit does not necessarily mean buying something with a credit card. If you purchase something on an installment or rent to own plan, you will be subjected to a credit check, typically confirming your income and ability to make payments. If you make all the payments and purchase the item, you’ll be on your way to a favorable credit rating.

CHOOSING A CARD

Sooner or later, you will - at least I hope you will - get to the point where your credit’s good enough that people start sending you offers for cards. Obviously, not all cards are created equal. A few points to consider:
1. Are there any fees simply for having the card? How high are they?
2. What’s the interest rate? If there’s an introductory rate, how long does it last, and afterward, what does the rate become?
3. Does the card offer any cash back on purchases?
4. Does the card offer any special security features, like your photo on the front?
5. Does the card offer special benefits? Most platinum cards offer travel insurance, and using some “affinity” cards will earn you frequent flier miles, or discounts on auto purchases.

Various sites offer comparisons of credit cards, and the range of features and rates is well worth reading about.

USE CREDIT - HAVE A BIT MORE CASH

If you use a credit card carefully, you’ll end up with more money. Let me elaborate on that. If you pay cash for various purchases over the course of a month, you gradually deplete the amount of cash you have (which I hope is sitting in the bank earning you interest). On the other hand, if you use a credit card, the cash can sit there and earn interest until the check you send the card issuer clears. Naturally, this presumes that you’re paying off the card in full every month.

BALANCES: PAY MORE - PAY LESS

If you’re not paying off your balance every month - and I know how that feels! - you’ll still want to keep some cash in the bank for rainy days and emergencies, but you’ll save money by throwing as much as you can afford at the card issuers.

Yes, I said that. The more you pay, the more you’ll save. No, this isn’t “the new maths.” Basically, the more you pay, the less interest builds up. If you just make the minimum monthly payments on a credit card balance of a few thousand pounds or more, you’ll take 20 years to pay it all off - and you’ll end up paying more in interest than you originally spent!
On the other hand, if you pay double the minimum, you’ll be paid up several years sooner, and save thousands of pounds in interest. And if you can pay a higher multiple, you’ll be done even sooner and save even more. This is, of course, a good thing - though it’s better still to pay things off in full each month!

CONSOLIDATING & REFINANCING

If you’re following any of the advice above, you probably won’t find yourself allocating too much of your non-discretionary income to credit payments. (Discretionary income, on the other hand…) But if you’ve got a whole bunch of different accounts, each with its own balance, interest rate and minimum payment, well, life’s no fun.
Consolidating and refinancing to the rescue! In either of these cases, you replace all your little high-interest debts with one big low-interest one. If the new interest rate is significantly lower than the old ones, you can save a decent amount of interest expense.

Consolidation or refinancing loans come in two flavours, just like credit cards. There are secured loans, where you put something up as collateral (like your house, or your car) and your new creditor gets that something if you fail to pay off the loan. And there are unsecured loans, where you are given the loan on the basis of your word (and your credit rating).
Unsecured loans tend to have higher interest rates than secured ones, so if you’re paying more than the minimum on your credit cards, consolidating them might not be as beneficial as you hope. A bank loan rate officer should be able to tell you whether it’s worth it. Various web sites also offer debt consolidation loans and information.

CREDIT REPORTS

I recommend looking at a copy of your credit report every few years, just to make sure things are correct and accurate - and preferably positive! Credit reports are available from credit reporting agencies online and generally cost several pounds.

Credit reports are available on-line through web sites. These sites usually offer credit monitoring services which regularly updates subscribers on the state of their credit reports. A free credit report or analysis and trial period are typically offered - if your report is totally positive and you don’t think it needs watching, cancel the service before the end of the trial period. If your report has some inaccuracies, or other things you want to keep an eye on, the service might be worth keeping. 

SUMMARY

• Establishing credit generally costs money.
• You can use this money to buy something on the installment plan, or to get a secured credit card.
• Not all cards are created equal. Choose carefully.
• Used carefully, credit will help your make money last.
• Paying as much of your balance as you can will save you money long-term. • Consolidating debt through a loan from a bank or a web site can help lower your interest rate, but you may have to post something of value as collateral to get a good interest rate.
• Credit reports can be very informative, and they can be had for free.
• Credit monitoring services may be useful if you’re unsure about your credit report.

  • Share/Save/Bookmark

Basic Landlord Tips

May 8, 2009

With the recent declines in the property market, a large portion of speculating investors have turned into reluctant landlords. If this describes you then stick to the basics of property renting to ensure that you can ride out the storm.

 

When renting a property, the first and foremost task on your priority list should be screening the prospective tenants before you hand over the keys to your property. That means doing a background checks on the tenant, reviewing their credit report and checking previous references from their previous landlords.

 

When conducting the checks, make sure that you ask for a picture id such as a driver’s license or a passport to ensure that you are checking out the correct person.

 

If you think you are likely to get a good demand for your property then see if you can arrange an “open house” so that you can show the prospective tenants the property all at once. This will save you considerable amount of time which can be invaluable if you managing a number of properties in a portfolio.

 

Once you have completed the viewings and selected your tenant, make sure that you do not hand over the keys to the property until the deposit checks have cleared.

 

Being a landlord is not as easy as you may think, especially if you have a lot of properties. You will have problems and need to have money in place in case you need to spend money on potential problems. Renting property without the right checks or a contingency fund can lead to painful problems.

  • Share/Save/Bookmark

Understanding Property Values - Before Investing

May 1, 2009

Knowing the kind of returns property investment can be tempting enough for anyone to put a significant amount of savings into the property market. This hasty approach can quickly cause the erosion of your hard earned money instead of compounding it if the investment is not made correctly.

Although the property market has the potential to give a good return on your investment, it can be risky if you do not understand the basics of this volatile market. So before you dip in your pocket, remember that the most important thing to succeed in property investment is to understand the value of the property being purchased. It takes a decent amount of well informed research and some experience to be skillful enough to associate a fair value to the property. Taking note of the following basic information will assist you in taking an informed decision.

The best way to arrive at the ballpark figure of the value of the property is to compare it with the recent and current sale price of similar properties in the area. The word which is used in the world of property for sale prices is ‘Comp’ (short for comparable). Once you zero in on the property that you want to buy, compare its price with comp of similar properties (both currently on sale and previously sold). If the listed price is near the comp then you can be practically sure that you are getting the right deal. But before you go celebrating, make sure that the property you are buying is similar in characteristics to that of the comparable properties. In other words the properties you compare against have similar internal characteristics such as the number of rooms and size, similar external characteristics such as garage, garden and parking and the actual condition of the property is similar too. For example, if the property being sold to you is at the higher price than the comparable property and has some extras like a swimming pool, a landscape or extra parking spaces/ garage then the asking may be reasonable.

If the listed price is a significant departure from the comp then you should brace yourself to do some micro comparison. Other factors can also influence the price difference. For example if you do not have the luxury of finding similar properties on the same road for comparison then you may have to look at the next closest road and those properties can quite well vary in price due to factors such as amenities and the local surroundings. You should look more closely at the amenities local to the subject property you are looking to purchase.  Check if the property you are buying has extra amenities features and assess the cost of these extra amenities which are being provided to you. Pick up two properties from the recently sold and current on sale properties which are similar in all aspects and see if the price varies between them due to the local amenities to gauge the way the properties are priced. 

You will also need to take account of current market trends and whether the property market trend is lending itself to lower o higher property prices compared to similar properties in the past. Market trend is a very important factor influencing property prices. The same property that was sold a year ago may well be priced higher if the property market has appreciated in value since then. Conversely the market may be in a correction phase and the same property could be worth less in the current market, so make sure you take the market trend into account.

The process of property valuation may sound simple in theory but to apply it you must have as much information as you can about the homes recently sold or listed for sale in the market. A serious property investor should continuously research the market for the trends in the price by visiting the properties, following property advertisements in news papers or online.

Once you have done enough research into the property market and once you learn how to associate a fair value with a property, you are ready to take a plunge into the world or property investment.

  • Share/Save/Bookmark

Buying Investment Property - Basics

May 1, 2009

Repossessed and distressed properties give you the most promising opportunities in property investing. Buying a resale property gives you an opportunity to save some money and then invest this surplus to refurbish it or if refurbishment is not required, invest in a new investment to maximize your investment. However you should exercise caution when you choose any such properties. The important point while making the selection is not to end up buying a house which cannot be repaired. The following principles will guide you in making an informed and wise decision when buying investment properties.

For any commodity the most important factor is to look at the price. Mind you a cheap deal is not always the best deal unless you are able to justify why it is being sold at the price it is. You should do a thorough research to find the seller’s intent for selling it exceptionally cheap. Unless the reasons are obvious you need to investigate thoroughly. A lot of the times the reason for the sale can be genuine which can include the seller is in financial problems or he needs to move out of the place quickly to relocate, has to sell quickly for personal reasons and so on.

The next but equally important factor is to understand the nitty-gritty of the property deal often termed as payment terms and the conditions of the property market. If you are very much sure about the price and the property you are buying then you can go ahead and negotiate an offer below the current market value price. Most sellers are interested in getting a payment in full than being paid on a term basis.

Competition and price trends in the local market are other factors which you should be watching very closely before settling for a deal. If you have a proper understanding of the price trends then you are always in a better position to “bag a bargain”. The surrounding of the property is another aspect which goes into deciding the price of a property. The presence of amenities like parks, security facilities, shopping areas, hospitals etc in the vicinity can drive up the price of the property.

As mentioned above that distressed and repossessed property is the avenue many property investors start with. Most often these houses will require some amount of repairs and you should discount the cost of repairs such that you end up being profitable.

The properties that require minor repairs like repainting basic flooring, landscaping may end up giving you some profits but significant profits come from the properties that are in utter mess but can still be repaired. The reason for this is that such properties are far cheaper in the market and are available at even 40%-50% price of the properties which are in a good shape. Even after investing a decent amount in the repairs such properties leave you with a handsome margin if you go to resell them.

Investing in property can prove to be a great way to earn huge profits provided you are thorough in your research and selection of property.

  • Share/Save/Bookmark