Some Media Commentators & So Called Industry Experts Are Calling The Death of Buy-To-Let.. The Truth Is Its Never Been Better To Be A Wrexham or Chester Landlord
Rents are
high and property prices gradually reaching the historic highs that we
experienced pre-recession. Seasoned property investors and entrants to the
market are more than happy to look at 3.5 – 4% yields for a property that
offers strong holding power and the ability to create a long term return.
Yes the
days of 10%-12% yields ‘all day long’ may have dried up – but for some to call
the death of the industry is a bit extreme.
NLA
predicting dark days for buy-to-let in Wrexham & Chester
Earlier in
the year the National Landlords Association made some stark remarks off the back
of the chancellor George Osborne budget crackdown on landlords, they said:
* 500,000 rental properties will be sold off by landlords
* confidence in the market is at its lowest since the banking crisis
* there is an assault on private residential landlord
So why do
I think the best is in sight for Wrexham & Chester landlords
Whilst the
scaremongering goes on investors and future buy-to-let landlords have been
quietly going about their business acquiring properties to rent out and
networking to create joint business ventures to create buy-to-let
opportunities.
The people
I am meeting and talking to are from all walks of life and from all sectors of
the business community, whilst they are not singing from the roof tops about the
deals they are doing this is only because they are getting to the best deals
first.
Whilst
mortgage rates are historically low, stock markets volatile and the return on
traditional savings non-existent - the buy-to-let scene is still extremely
attractive. But beware while rates are at an all time low now they will
increase one day and this has to be figured into your property portfolio
business plan.
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| It's Your Choice |
No.1 You can be
a choosey landlord
Its
currently a landlord’s market. As long as you are sensible with your rental guide price and not discriminatory, you can afford
to market the property as you wish and call out to the type of tenant you want
in your property.
No.2 Advice & reassurance
There has never been a better era
than now for the so-called property expert. As a landlord you have so much
experience and so many people willing and able to help you professionally, or
to simply to offer you that bit of guidance down at the local pub. Surround
yourself with a good group of property professionals i.e. a good accountant, a
good solicitor, a good letting agent, a good estate agent and don’t be afraid
to ask questions – knowledge about the local Wrexham property market is power.
No.3 500,000 buy-to-let properties returning to the open
market
Property investors and those looking
to purchase buy-to-let properties will be hanging
onto my every word to find out where these properties will enter the market.
Not only is the new stock good news it is highly likely that deals can be done
to keep the existing tenants in situ or market the property pre-completion so
the new owner has rent coming in from day one
No.4 Research your market
Information is available to
landlords. A little bit of research can make the difference between actually
making an offer for an investment or not.
No.5 Price
Deals can be done especially when its
‘commercially driven’ with a buyer and seller both in the property world.
As a Wrexham property investor you
are not reliant on selling a property to buy your next one, you are also not
part of a chain so you offer an increased amount of credibility.
Make low offers and don’t get tempted
into overpaying, but be conscious of your market and find out who the sellers
are and their reasons for moving – this will help negotiations.
No.6 To manage or not to manage?
The world of the traditional letting
agent is changing, the change is being dictated by on-line agents and the
landlords that are using them, then compounded by local councils, central
government and regulatory bodies. This is doing one thing, professionalizing
the industry and creating far better property agents who will look after some
of your biggest assets.
Self managing is a real option and
will save a few pennies. There are new licensing laws that are trying to
squeeze landlords out of the market, so self managing sometimes becomes a way of
turning a property liability into a property asset OR find an agent who is
equally capable through recommendation and who can negotiate better management
rates.
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| Let Someone Else Deal With The Midnight Call |
No.7 Location, Location, Size
A Knight Frank survey of 5000 renters
found that 52% of renters choose their property because it was near where they
worked. News travels fast of businesses expanding or new companies moving into
the area. A switched on landlord will be aware and will buy their next
buy-to-let where the demand will be. This has been the case in the Deeside and
Chester property markets where industry has located in the area and the
overspill for rental properties has created a fantastic demand over the last
couple of years.
But don’t forget the demographic, after
all who will be working, how old are they likely to be, where will they be
coming from and will they be alone, buddying up or bringing their families.
Sometimes you can create your market, you just need to be tuned in.
No.8 Borrowing for your Wrexham buy-to-let property
Interest rates are at an all time low,
buy-to-let mortgages can be found with rates
starting at 1.5% with typically a minimum 25% deposit. With lenders looking at
the buy-to-let property as a business it is important all costs are considered
and that the best mortgage deal is found. Some top tips:
Use an independent mortgage advisor who can source
from the whole of the market.
Look at varying deposit amounts and total cost of
borrowing which includes fees and charges.
Some lenders will only look at a buy-to-let
mortgage if the rental income is 125% of the mortgage repayments. There are an
increasing numbers of lenders who are looking for 135% rent/mortgage payment
ratio.
Experienced investors can seek advice from a ‘commercial
broker’ who can secure funding based on a business plan style agreement where
they consider all of a particular client’s property assets and lend based on
group value. Rates can be slightly higher for this bespoke service.
No.9 Rents are increasing in the UK
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| Average UK Rent [exc. London] |
HomeLet Rental Index has reported
that the average UK rental value was 764pcm – up 5.1% year on year. This time
last year they reported a 7% increase year on year [this information excludes
London].
This represents a year on year
increase and shows how strong national demand is.
No.10 Rents
are increasing in Wales
HomeLet Rental Index has reported
that the average rent in Wales up to April 2016 was 597pcm – up 4.3% compared to
April 2015.
For more information about this article and local Wrexham
property investment advice call Wrexham & Chester property expert, Craig Swire on 01978
799 588
Tel: 01978 799 588
Mobile: 0787 237 6768 E-Mail: info@HelpMeRent.co.uk
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