If you invest in buy to let property do you need to worry about regulations?  The short answer is yes and the long answer is absolutely, most definitely yes just read on to find out why.

There are several areas where a landlord owning a buy to let must comply with regulations.  If you are to build a solid, reliable income stream your reputation as a quality landlord is something to cherish and should start with dealing correctly with all regulations.

The key thing to remember about any regulations is that knowledge is the be all and end all and for this reason alone working closely with a lettings agency will provide you with all the experience  you need.

Health and Safety Issues

Don’t roll your eyes upwards like that.  Health and safety regulations have been a great driver for change in the buy to let industry.  Yes they often mean additional expense but ask yourself a question.  What if it was your child or your parent living in unsafe housing?  Anyway – guilt tripping over, the regulations are here to stay and you should also expect them to change over time so you’ll need to be working with someone who is plugged in to those changes as they happen.

Broadly speaking you need to be worrying about gas, electricity and fire from the Health and Safety perspective.   Gas appliances are required; by law to be inspected annually to make sure they are working safely and that above all else they are not emitting carbon monoxide gas which is a killer.  Electrical equipment, including the supply circuitry has to be maintained in safe working order and all appliances must carry the European CE mark.  If you are renting a furnished property you must make sure all furniture meets regulations and if you are renting out an HMO (Home in Multiple Occupation) there are strict fire regulations laid down by Government and local authorities to comply with.

Taxation

Well yes you can roll your eyes over this one – after all, nobody loves a tax man do they?

There are several types of taxation that you will be liable for when running a buy to let business.  First, and most frequently forgotten is Stamp Duty Land Tax.  It falls due on all properties sold for more that £125,000 and the amount increases as the value of the property rises.  It  becomes liable at the time you purchase your property.

When you sell any property that is not your family home you are likely to become liable for Capital Gains Tax on any increase in the value of the property since you purchase it.  There are detailed regulations covering how you can write off monies you spent improving your property and input from your letting company consultant will give you a general idea.  However regulations change every time Georgie Porgie gets out the red box so you’ll probably be best off talking to your tax advisor.

Profits from your rental business are also taxable and can be paid through PAYE if you are employed and they are less the £2,500 or through self assessment if you are not on PAYE or your profits are above £2,500.  As with advice on Capital Gains Tax you can talk to your lettings company consultant for a general picture and to your tax advisor for the latest detail.

In either case, Health and Safety or Taxation, there is no substitute for the knowledge and experience a good Lettings Company can bring to the table.

In a world economy that’s on wild roller coaster ride, the name of the investment game is putting your pension or savings into something that is liquid or easy to sell. The general consensus among new property investors looking at UK buy to let property is that a leasehold property is next to impossible to sell.  Many believe that since there are less freehold properties, these are in demand and have a higher chance of being sold quickly.

However, it’s not that simple. Digging deeper, you can see that these are all sugar coating misconceptions. First of all, freehold property is limited. Moreover, with a leasehold property, the upkeep is always maintained being part and parcel of the leasehold contract. If you decide to invest in a freehold property, you will have to wait a long time for one to come on the market. In the meantime, your savings or pension could be decreasing in value.

The past 2 decades has already seen more than 90% increase in UK freehold and leasehold buy to let property value, outperforming the stock market as a sound long term investment.

Since most leasehold buy to let property offers are located in prime locations and as income-generating property, you can maximize your leasehold property investment a lot easier than with a freehold property. There are solid reasons for investing in a leasehold property with income potential such as the vibrant rental culture in the country from long term visitors, international students, new settlers, and a steady economy.

Just this month, pharmaceutical billionaire, Ernesto Bertarelli announced his intention to buy UK property to the tune of £500 as initial capital. His decision to diversify to the UK leasehold property market is a strong indication of international investor confidence in UK leasehold property market. Another high profile investor is Tribeca Holdings Ltd from Ireland who paid 13% over the asking price for a commercial property in Bond Street. They did this to ensure that their bid won against 3 other offers.

Leasehold property is a sound investment plan, and even more so with the decline in bond yields and the stock market. It also provides an alternative source of income in an economy that sees loss of jobs and dwindling promotion offers as a regular occurrence.

Top research firm, Real Capital Analytics Inc with offices in New York, London, and the Netherlands recently announced London to be the “world’s top destination for property investment for the past 2 years.” And now with the political and economic turmoil of the past months, they predict an increased rush for UK property, including leasehold property. This was seconded by another US property giant, CB Richard Ellis Group Inc in their Aug 16 report, stating that the least risky investments are being sought after such as prime property in the UK and other parts of Europe.

As they say, the proof is in the pudding with a compelling U.S. $12.3 billion or 52% increase on leasehold property investment in London alone for the first half of 2011. Even the riots that took place earlier this month appears to have no bearing on investor confidence for leasehold property in London.

If you are interested in investing but would rather not attempt risking your pension or savings, then consider leasehold property because even in non-prime locations in the UK, the interest among investors remain steady and confident. Being the first property market to recover after the 2009 global financial crisis, UK is now considered by many as the safe haven for investors. You can earn from your buy to let property investment because there is no drop in investor interest, local or international, not now and not in the foreseeable future.

When ever possible we recommend our investors to let out their properties unfurnished, this is not just to save on buying the furniture. It’s important to point out that certain rental markets, buy to let, will only let with furniture but if you can always try to let your property unfurnished.

There are two simple reasons behind doing this. The first is your tenants are likely to stay longer. If you have recently had to endure the drama that is moving home my heart goes out to you as it is not a pleasant experience. The memory will normally scared on you for at least a year or two and this is no different for tenants. If your tenant has to move in their own furniture they are highly unlikely to move after 6-12 months.

The second reason unfurnished is more desirable, is that tenants are more likely to treat the property like their own home. Now this doesn’t mean that tenants who let furnished will trash the property but they are certainly going to think a bit longer and harder doing so if they will damage their own furniture. This means that your buy to let property is far less likely to see wear and tear as much as a furnished property.

To learn what other strategies you should be implementing call your property consultant on 0207 148 3164

Once you make your decision to buy a property and earn money from it then there are a few different factors you need to take into account in order to make it happen in the best way possible.

Because you are looking at a property as an investment rather than as a home you can take out some of the emotional side of things and consider the hard facts about the places you are weighing up.

What Kind of Future Does It Have?

Sometimes it is pretty clear from having a look around the neighbourhood whether it is an area on the way up or if it is going the other way. Are there signs of progress such as new constructions? You could also check out what plans have been lodged with the local council for building works nearby.  You might also notice whether a lot of the neighbouring properties are already up for sale or to let. If you don’t see a lot of these signs about then this is good news.

What Type of Tenant and Buyer Will Be Interested?

When you are comparing buy to let deals you need to remember that to make a handsome profit you need to find two people at some point; a tenant and a buyer. Ideally the property will be in keeping with the kind of person who might like to live in the area. If it is a really classy house in a rundown area, for example, you may struggle to realise the kind of profit it deserves. To check out the potential market have a look to see if there are schools, universities and big offices nearby. Does it have good public transport links and is parking possible? People look for convenience these days, so a good range of shops and leisure options close at hand are also useful.

Is the Value Likely to Increase?

This is the key point for making the sort of money you are hoping for. If the property is currently undervalued and you can get a good mortgage which lets you invest little of your own money in it then you are well on the way to making a fine deal. Having a look at recent trends in the area and the current price of other properties is a decent guide to get you started. If you are looking at a house which needs some work done on it then you need to find out the sort of maximum value which a really smart property on the street could go for.

Buying a property as an investment is a huge step and you may very well feel a lot better if you have the help of buy to let property mentor to guide you through the process.

The question is what to look for in this mentor. Make a wrong move in this respect and you will end up counting the cost later on, as a poor purchase decision is something which will have long term financial repercussions for you.

The good news is that it is possible to find a class mentor by considering a few of the key criteria you need them to fulfil. Below you will find a few tips to help you along the way to making the right decision.

Lots of Experience

When it comes to buying and selling properties there is nothing to beat years of experience in the field. Just as you wouldn’t want to be your brain surgeon’s first patient or to see your dentist looking up “The Dummy’s Guide to Fillings”, you really don’t to leave your money in the hands of someone with good intentions but no experience to back it up. Do this and it is a recipe for disaster. You would actually probably be better doing it yourself than relying on an inexperienced buy to let property mentor.

Active in the Market

We need to add current activity in the market to the last point about experience. This is because the UK property market moves so quickly that if your mentor gained their experience selling apartments in the 1960s then that isn’t completely relevant to today’s buy to let investments. If you choose to lean on someone then make sure it is someone who knows what the current trends are and how you can take advantage of them. This combination of long experience and current knowledge is what will help you along the way.

Good Contacts

The final point on the list is your new buy to let property mentor’s database of contacts. If they have the experience and the current activity which we just mentioned then there is a good chance that they will also know where you can get hold of some top deals. This is the end product which you should be after. The amount of profit you make from a buy to let investment is going to be largely determined by how good a deal you get on the property when you buy it. There are bargains out there and while looking for them alone is a tall order, you can get some expert help to guide you in the right direction.

Hello and welcome to another round up of mortgage news affecting the buy to let industry.

This Week

• Mortgage fees up by 69% in the last 12 months
• New buy to let mortgage options from Yorkshire bank
• A Mortgage Advisor’s view

Mortgage fees up by 69% in the last 12 months

The Sunday Times yesterday reported that high street banks have increased mortgage arrangement fees by nearly 69% over the last 12 months. The good news is that mortgage rates fell in the same period as wholesale costs have decreased. The arrangement fee price hike is a sneaky tactic by the banks to increase their profit margins. Your take away point here is don’t be seduced by the headline rates for a mortgage, always take into consideration all costs.

New buy to let options from Yorkshire building society

This week Yorkshire building society loosened restrictions on its buy to let products. Previously Yorkshire has restricted lending to properties in London and the southeast, in a positive move they have now opened lending to all of England and Wales. They have also reduced the minimum required income needed from £35,000 to £20,000.

Mortgage advisors view

Each week we ask our resident mortgage advisor for their viewpoint on the market.

“It’s great to increased flexibility from Yorkshire Building society, this is part of a continuing trend from all lenders who realise there is plenty of appetite for buy to let property. The rate increases noted by the Sunday Times come as no surprise as we have been warning our clients of the increasing hidden costs for months.”

To speak a mortgage broker call our parent company Rescue my Pension on 0207 148 3164.

The London property market is an exciting and frightening thing for anyone new to it. We all know that it behaves in a way which is often different from the rest of the country, and there are also a few different points to take into consideration before you buy.

Taking your time and finding the right property can be a frustrating business in such a massive and fast moving city. To help you sort out your priorities and avoid costly mistakes we have put together a list of 4 of the best pieces of advice you will find on the subject.

Beware of High Management Charges

London properties often come with management fees which can eat into your profits. This is one of the first points you should check out when you are considering a property and if the fees are high you should probably walk away unless the deal is extremely enticing.

Aim to Buy Below Market Value

It is easy to look at a graph of London property prices and get carried away by the fact that such huge increases are often seen. It is a city which offers fantastic growth potential but let’s not forget the basics of property investment because of this. If you want to make as much of a profit as possible then it is important that you buy the house for as little as possible.

Buy Near a Train Station/Tube

If you aren’t from London then while you will no doubt know all about the Underground you might not appreciate just how vital it is to buy a property near a station. You will need to find both a tenant and then a buyer for the property and the first question which just about everyone is going to ask is how close it is to the nearest Tube station. Few people rent or buy in London in order to potter about in their garden. They need to get to work or university, and the big distances involved means that they will want to do so as quickly as possible.

Take into Consideration Future Regeneration Projects

An interesting issue worth considering is whether the area you are looking at has any regeneration projects in the pipeline. These are wonderful schemes which breathe new life into rather rundown neighbourhoods. If you can get hold of a cheap property which falls into an area waiting to be regenerated then you can expect the value to increase significantly once the zone starts to get spruced up and receive fresh money into it.

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Deciding to make money from a buy to let property investment is the easy bit. Now you have to work out how you will do it.

The key to any investment such as this is, of course, the property. Here are some simple points to help you chose the right one.

Would I Live In It?

This isn’t quite an infallible tip, as you might be buying somewhere for a different kind of person. However, try setting aside the commercial side of things for a few minutes and try to picture it as your potential tenants or buyers would. Is it in an attractive street or is the atmosphere not great for living in? You are looking at it as an investment but to make it work it you need others to be able to see it as a possible home for them. Remember don’t get emotional but focus on your target market.

Can I Increase Its Value?

If you are looking at a really nice house then you need to ask yourself what you could do to make it worth more money, other than wait for the markets to rise. If you want to maximise your profits then the best idea is to find a place which you can improve or which is being sold cheaply for some reason. Of course, this is what all investors are after so you will need to make your mind up pretty quickly if you find one of these bargain properties.

Am I Putting All Of My Cash Into It?

One point which it is easy to overlook is the level of future investment which the property will leave you. In general terms, the less of your own money you can use in buy to let deals the better. This might sound a little strange but a good example is if you can have £50,000 to invest. If you put this into two different properties with £25,000 on each one then you have a chance of earning a lot more profit on it than if you were to sink it all into the one house.

 Will I Be Able to Sell It On at a Profit?

The last issue is really a little bit of all of the previous ones plus a few other issues. If you find a property which could be a great home for someone else, whose value you can increase and which will maximise your original investment then you are well on the way to making a fantastic choice. What you also need to bear in mind is whether you are likely to be able to let it out quickly and then sell it on as soon as you want to. This is one of the keys to finding a cracking buy to let deal, making your money on it and then looking to invest in a different property.

You may have heard a lot of talk recently about the buy to let mortgage type of investment but possibly you aren’t too sure about what it involves. Let’s take a look at the different elements of this type of deal.

How Do I Earn?

A buy to let mortgage is simply a loan you get which lets you buy a property for letting out to a tenant. This is a wonderful type of investment as you can expect to win in two different ways. The value of the house goes up and the rental payments you get in pay for the mortgage and may give you a bit extra too.

Get the Right Buy to Let Mortgage Deal

You therefore need to start your investment by finding the right deal for you. There are lots of different types of buy to let mortgage offers around these days but you will want one which is affordable and meets your needs. You may want one which lets you put down as small a deposit as possible or you may like to pay back as little as you can each month. Each property investor has their own priorities and your need to make sure that you know what kind of deal is perfect for you.

Find the Ideal House

Apart from the mortgage deal the other crucial aspect to the investment is the property you buy. You will want one which meets two basic criteria; easy to let out and with good long term prospects. A good example would be a house which is near a new office development or in an up and coming residential area. Areas which are popular with students are also worth looking at, although you may have to let out rooms individually if you do this. Remember what we covered earlier about the rental income and the value increase being the two benefits. This means that a buy to let mortgage investment only really makes sense if you can find tenants willing to pay a good rental figure and if you believe that there is a strong chance of the house’s value increasing over time.

 Plan for the Future

After you have been receiving rental income for a while you should be in a position whereby the property is now worth a lot more than you owe on the mortgage. Now you have another decision to make. You could sell the house and use the earnings to buy one or even two other properties or you could sit tight and wait for better earnings first. This is up to you but having a long term strategy in place before you even start will make sure that you know what you are aiming for.

Should you invest in a buy to let property or gold?

Recent news stories have highlighted the fact that gold prices have reached an all time high. Precious metals are seen as being as among the safest type of investment in times of economic turmoil. This means that many people are now turning to gold amid concerns about the stability of the dollar, the euro, share prices and, well, just about everything else really.

So is gold the best type of investment you can make?  Yes and no is the rather contradictory answer, I am afraid. If you want to keep your money safe and far from falling economies and recessions then it is a good option. You are unlikely to ever lose much money on gold but the flip side of that is that you are unlikely to ever earn much on it either. The law of supply and demand is slightly twisted with this commodity because it is treated more like a currency in the trading markets, and also because most of the gold ever mined in the whole world is still available to us.

Enough about the yellow stuff, though. What we all want to know is how to make more money than we would by investing in gold. Buy to let property investment is one way of doing it and it certainly has some big advantages which gold can’t offer.

An Income Stream

Instead of having your money tied up in bars of gold or some other commodity, you can make sure that you get a regular stream of cash by letting out your property. This means that you don’t need to go selling off bits and pieces of your investment every time that you need access to some of your money.

A More Steady Increase in Value

Graphs and figures showing the trends for both gold and UK property prices are easily available online, so you might want to compare them. They both show current figures which are a lot higher than just a few years ago but the graphs are completely different apart from that. Gold reached a massive peak in the early 1980s and then had a long period of depression before coming strong again in the last 10 years or so. That means that there were almost two decades of prices either falling or staying pretty much the same. British house prices, in contrast, have shown an almost constant rise over the last few decades.

So there we have it, if you want to grow your money in a steady way and also receive a regular income you need to say no to the yellow bars and look at buy to let property investment instead.