HowieG

After years of wanting to get into the property business but not having the funds/ time etc, I'm now in a position to go for it - just as doom gathers on the horizon!


Question 1 - Should I go for it in this economic climate?

The thing is, I can fund the purchase of a flat but need to know a few things about the rental business.

Question 2 - I don't fancy paying agents fees and would rather manage the whole affair myself. Where is the best place to advertise?

Q3 - Where can I get a copy of an up-to-date AST contract? Section 21?
Q4 - References - should I use an agency?

Sorry if it seems that I'm after a complete DIY guide, but I know there are a few SN members with this experience and wonder if they would advise.

Thanks

Howard

little rick

A number of agents operate a 'finders' system - they advertise, find a tenant, sign them up then you can manage it from there on.

If it's your first venture into this it may be the way to go as they will deal with all the paper work so you can be sure its done ok

If I were doing it that way I'd ensure the agent was ARLA registered as they will have rules and regs to follow - beyond that all personal preference

If you decide to do it all yourself (advertising, signing up etc) it can be a major headache if you've not done it before so may be worth paying the finders fee from an agent

Pick up the local paper and see who's advertising locally and give them a ring - if they think they're gonna get business they'll be more than happy to help but be prepared for the 'we do offer a full managment service' conversation

Petem95

NO! You will almost certainly regret it in the future if you do.

IMO save your cash, and be ready to purchase cheap assets from forced sales in the coming years.

Why buy just after the top of this cycle, when you could potentially buy near the bottom of the next cycle in 4-5years time?

Luminous

iTrader: (3)

ARLA registered agents are a must, otherwise you are probably heading into cowboy territory. Even when they are ARLA registered, they can still screw up

Lots of agents offer various different packages, from just advertising under their name, to reference checks etc.

You can get rent guarantee insurance for tenants who refuse to pay. Reference checks needed to meet insurance like this are more stringent. If you are getting agents to do referencing, make sure they do checks to meet insurance polices like this (forces them to do a better job), even if you don't take the insurance

As for getting into the business, rental prices tend not to follow house prices that closely. There is certainly a large period of lag between house price increase and rental price increase. The rental market is often a totally different market than the house price market. It has different drivers, and changes according to supply and quality, and regulation.

My guess is that house prices will at worst take a small temporary dip, and then rise in line with past history. You just need to make sure that the rental income covers the mortgage based on higher than current interest rates. Don't expect to be able to put up the rent just because interest rates have increased, the tenants just won't care

If you find somewhere that offers enough rental income to cover your mortgage and agent fees then you are more or less sorted. Its a long term gain game, hotspots come and go. You just want somewhere that works long term. Look out for new builds, see how many of them are coming to market. Last thing you want are a few hundred new builds in competition with your own place. Rents have been falling in some places.

HowieG

Thanks for taking the time to give an opinion - either way.

I'm looking for the long term and may be able to buy well, so slight dips do not concern me, however I would prefer if things continue as they have.

Waiting 4-5 years for something that may not happen does not appeal. Clearly there is risk which needs to be considered.

Anyone else with views? Anyone who advertises, signs up etc. on their own?

Howard

HowieG

Luminous, do you use rent guarantee insurance? Or do you have enough spread of risk to cover it yourself? Any idea of costs?

Howard

HowieG

Little Rick, what should the finders service cost?

Howard

HowieG

Petem, are you selling now to buy again in the near future?

Howard

little rick

Varies from agent to agent and area plays a big part - obviously london is going to be far more expensive than somewhere like newcastle

Best bet is to ring a few agents in the area - they'll also be able to inform you of all the levels of service they provide (including references, credit checks etc) - the package you want will also be a big factor on £

The agent you buy from may also have a rental department and may offer a discount if they know its a buy to let

richardg

pete's been talking about a big crash for a few years now. he clearly believes it's right around the corner, so i expect he will have prepared for it...

ps - no offence intended pete

richardg

howard -get yourself over to landlordtrader.co.uk
have a good read of the forums and ask any questions yo uneed to before commiting yourself. always make sure you do your own homework - if i were you i would never rely 100% on someone else's "research" when it comes to sales values/rental values etc

Chris L

Whether you decide to go for it in the current economic climate depends on what you are intending to do. If you want to buy a place, do it up and sell it on, then I would urge caution. We are at the top of the buying cycle at the moment and I believe that prices will almost certainly start to fall next year.

If you are looking longer term - i.e. using the property as a long term investment (20 years+), perhaps as part of your pension provisions, then I would certainly consider it. You are unlikely to lose on property prices over a long period and if the market does fall, especially as the hikes in interest rates start to bite, then this could well lead to a strengthening of the rental market. Do your figures, get a decent accountant and go and see a financial advisor with experience of property investment!

mr_p1ssed_off

if you buy well it doesnt matter what the housing market is like

a desireable house will rent out all day long to decent tenants

a pile of poo will attract ****e tenants


as for the crash in the housing market
so called experts have been saying it will deff happen "by this time next year" for several years now and it stillaint happened


along with my business partner we now have 32 houses of which 18 have been bought within the last 2 years and we deal with them ourselves which saves a small fortune in agents fees
only at the start did we use agents and that was a big mistake

buy well and you will do well


Mr PO

DCI Gene Hunt

32 houses.... in 'Donny'.... that's the best £50 ever spent then

mr_p1ssed_off

tis a great place

one weeks rent pays for the purchase of our entire portfolio

mr_p1ssed_off

Just look at what £1 buys you in Donny

£1 BARGAIN

maybe not everyone would want to live there but i think it would rent out ok?

DCI Gene Hunt

Don't like it, even for £1... not a great fan of wallpaper, and besides HOW FECKIN LONG would it take top cut that lawn

Petem95

Yes I'd say its going to happen within 2years Richard. But hey I could be wrong, house prices only go up right? Those mortgage lenders and estate agents would lie would they? I mean the US has enjoyed a house price boom almost as big as ours, but oh hang on.....

BBC NEWS | Business | Sharp decline in US house sales

Well theres always Spain, their boom has been pretty massive as well with lots of Brits borrowing too much to get that lovely home in the sun.... but hang on whats this?....

BBC NEWS | Business | Spain hit by property crash fears

I'll enjoy bringing up these old posts when the headlines here are "year-on-year price declines into double figures etc"

HowieG

This is why I love Scoobynet! As well as knowing what is the min thickness of a brake disc, the folks here are real people with real experience. Thanks for sharing it with me.

I'm sure I'll go for it so long as I can get the place at the right price - the deal is nearly done.

It needs a little light refurb (I'm a builder) and will/ should let easily as it is 3mins from the tube. Now all I need is to borrow a very large amount of money and find a tenant.

Thanks very much.

Howard

Now where is the local paper?

salsa-king

get your AST form + more from here
Assured Shorthold Tenancy Agreements

advertise in your local paper, check to see when the best night for rented property is (our local Nottinghm evening post is Thursday)

check out the details about tenacy deposit schemes that came into efeect las week. I think the insurance backed scheme will suit you best. you pay £58 to register, £14 a year to re new and then for every deposit you take you pay £30, this way youkeep the deposit and if there is a dispute at the end of the tenacy they can 'try' claiming it back. least this way youare doing it properly.

I now rent out 6 properties and do it all myself.

thing to do is buy the right sort of place to rent out..... 1st time buyer/starter homes always go well, buy at the right price so you'll make money on the property going up.

get three form of rferance when some one moves in. past upto date mobile phone bill, water/electric/gas bill, to show they were paying bills on their last place. referance from where they work.

ask for an extra £100 on top of the one months rent as deposit, this way it stops ppl coming to the last month and not paying you.. saying keep the deposit.



If I can help any more PM me

TopBanana

Sounds like you're trying to convince yourself as much as anyone else. No expert would ever have said that.

scoobyster

I'm going to start letting my pad while I'm working abroad for a year or two. Thinking of using these people: TLC Properties - Properties to rent in Sheffield

They say they're Residential Landlord Association members, not ARLA yet as they're a new company but will consider it later. Should this be enough to put me off or should I see what they're like in person?