Ethical Property: THE FUTURE OF INVESTMENT

Ethical Property: THE FUTURE OF INVESTMENT

Why Invest in Ethical Property? In the world of investment, property is the safest route to net returns. After all, as long as people need accommodation, property will always be in demand be it commercial, student or residential. We’ve entered a new era of property investment, where financial return is not the only concern but

Ethical Property: THE FUTURE OF INVESTMENT

Why Invest in Ethical Property?

In the world of investment, property is the safest route to net returns. After all, as long as people need accommodation, property will always be in demand be it commercial, student or residential. We’ve entered a new era of property investment, where financial return is not the only concern but also how the property can service a community.

An ageing population

As scientific discoveries have revolutionised medicine, the 2019 life expectancy in the UK is 80.99 years while in 1969 the life expectancy was 71.72 years. The UK celebrates over 10 million aged 65 and older, outnumbering those aged 16 and under with the baby boomer generation (1946-1964) reaching retirement age, the demand for residential and nursing homes is at high demand. Currently, 400,000 people are living in care homes, and over 800,000 people living with Dementia. By 2021, this will rise to 1 million, and be more than double by 2050.

They’re currently 400,000 people living in care homes, and due to the over 85-year-old demographic being the fastest growing age group, predicted to grow by 106% to over 2.6 million by 2030.

With the mortality rate in the UK, dramatically rising, there is a dramatic increase in demand for specialist dementia and nursing care. The care home market will play a significant role in our future society, with increasing demand for quality accommodation, care and funding.

The combined market value for older people in the UK is currently estimated to be worth £22.2 billion, of which £13.4 billion is attributable to residential care. As the number of elderly people with high care needs in the UK is expected to increase over the next 20 years, the need for modern, fit for purpose care homes is increasing rapidly.

The Millennial Effect

Over 62% of millennials have considered starting their own business, with 72% feeling that start-ups and entrepreneurs are a necessary economic force for creating jobs and driving innovation. According to the 2016 BNP Paribas Global Entrepreneur Report, millennials are starting businesses at younger ages than their counterparts in previous generations. Baby boomers, for example, tended to launch their first business at an average of 35 years of age. Millennials, on the other hand, start their first business around age 27, implying they’re more eager to start businesses and possibly, are more willing to take risks in doing so. The report also shows that millennials have launched about twice as many businesses as their baby boomer counterparts have

The millennial leaders demand action on major issues including climate change, mental illness and work life balance. Commercial property is seeing their influence and meeting their perquisites outdoor spaces, remote working capabilities and multipurpose spaces.

Autism and the UK

In 2019, there are approximately 700,000 autistic people in UK, more than 1 in 100. Including their families, autism is a part of daily life for 2.8 million people. Many autistic children in state schools find difficulty in their needs being catered to, to the extent that 63% of children on the autism spectrum are not in the kind of school their parents believe would best support them. Additionally, 17% of autistic children have been suspended from school; 48% of these had been suspended three or more times; 4% had been expelled from one or more schools.

As autism is a lifelong disability that cannot be seen, the need for support to cope with finding employment and surviving daily life is vital.  Only 16% of autistic adults in the UK are in full-time paid employment and only 32% are in some kind of paid work.

To adhere to this, John Lewis has launched autism-friendly shoe services and The Education Authority now spends £270m a year on supporting children with special educational needs – including autism.

Final Note

With the rise of ethical factors being pushed for the forefront, the property market must represent the world we live in, both financially and medically.

 

 

 

 

 

 

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Can you balance property investment with a full-time job?

Can you balance property investment with a full-time job?

Many budding property investors have the desire, will and funds to invest with, but don’t necessarily know if their prospective property investment will be compatible with their job. The truth is, if you go about investing in the right kind of hands-off property, then it’s perfectly possible to maintain your occupation without it hindering your

Can you balance property investment with a full-time job?

Many budding property investors have the desire, will and funds to invest with, but don’t necessarily know if their prospective property investment will be compatible with their job. The truth is, if you go about investing in the right kind of hands-off property, then it’s perfectly possible to maintain your occupation without it hindering your property investment goals.

In today’s article, I will outline exactly what is required to pursue your career goals whilst maintaining a successful, hands-off UK property portfolio.

Two forms of income

The most obvious benefit of continuing to work whilst owning a property investment is that it provides you with more income on a regular basis. This is essential for saving money in which to put back into more property investments to build up your UK property portfolio. One form of income can maintain your lifestyle and pay the bills, whilst the other can go straight into your savings account for investing in more properties.

A hands-off approach

With regards to purchasing property investments, I’ve spoken with many first-time UK property investors that are under the misapprehension that they need to dedicate all of their time towards managing and maintaining their portfolios. This is not the case- in fact, many of the clients we’ve helped start or expand their portfolios take a completely hands-off role towards managing their property investment.

They do this by employing experienced lettings companies local to the property to handle the day-to-day running of everything. Collecting rent in which to pay you, dealing with potential maintenance and repair issues, finding new tenants and dealing with void periods etc.

By taking a hands-off role, this enables you as the investor to kick back and earn money without doing anything towards the upkeep of your property. Sure, you pay a fee to the company every month for the service. But many are happy to pay it for peace of mind they provide, and with two incomes rolling in from your job and property investment, it’s a small price you can afford to pay.

More free time towards finding future purchases

If you quit your job and dedicate all of your time towards managing your own property investments, you may find that this requires much of your downtime towards dealing with trivial issues like faulty boilers or leaky taps. At least with your job (or most jobs!) you finish at a certain time and are able to spend your free time identifying the UK property markets and where to make your next property investment purchases accordingly.

With more leisure time as a result of your property being managed for you, this is time that can go towards locating the best property hotspots and hands-off property investments across the UK.

Better chance of securing lending

Most lenders don’t consider income from properties towards the requirements necessary to obtain a mortgage. Because of this, it’s actually prudent to remain in your job so that the income produced not only gives you additional funds, but also because you’re more likely to receive the necessary lending to purchase UK property investments.

It isn’t impossible to secure a mortgage based on this criterion alone but having a dependable source of income will greatly enhance your chances so that you don’t have to undergo a painstakingly long search scouring the markets to get financing at bad rates.

Your job may aid you with regards to UK property investment

I’m not just referring to the money your job provides here either. Your occupation may give you an insight into how UK property is faring or how the purchase process works. For example, those who work in the business sector may know the legal process of purchasing a Buy to Let property with regards to conveyancing. A construction manager will know what is required to refurbish potential property investments because they do it as part of their job. I myself work in property of course, and my experiences here at Tarquin Jones will prove invaluable when I save up enough money to invest myself!

Your job may not overlap with giving you an insight into how property investment works. But the people you work with may be like you- aspiring first-time investors saving up for a hands-off UK property investment. You may pool your resources with them in order to invest together and obtain property of a higher value than you would by yourself. This can lead to profitable partnerships- both the directors here at Tarquin Jones for example worked together by chance years ago and formed this company together as a result.

Of course, there are advantages to focusing solely on property, and it came come down to personal preference as to what’s best for you and your property investment goals. It’s worth pointing out though that it is more than possible to continue your chosen career path whilst balancing a hands-off UK property portfolio that won’t impact your day-to-day life.

Our Investments page contains all the information on the latest Tarquin Jones property investments. Please give us a call on 0208 445 6542 or email us at info@tarquinjones.com to inquire with us directly regarding any of them.

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Neighbourhood Watch: Ropewalks, Liverpool

Neighbourhood Watch: Ropewalks, Liverpool

Ropewalks   Named after the 19th century dominating industry of crafting ropes for the sailor ships, Ropewalks is at the heart of Liverpool’s independent scene, bursting with art, music, culture and home to places including Bold Street and The Bombed Out Church. Voted one of the hippest places to live- beating out the trendy Baltic

Neighbourhood Watch: Ropewalks, Liverpool

Ropewalks  

Named after the 19th century dominating industry of crafting ropes for the sailor ships, Ropewalks is at the heart of Liverpool’s independent scene, bursting with art, music, culture and home to places including Bold Street and The Bombed Out Church. Voted one of the hippest places to live- beating out the trendy Baltic Triangle area, the array of restaurants, bars and thriving bars keep the neighbourhood electric from day to night.

Retail

Bold Street

Voted by Lonely Planet as one of the best shopping streets in the UK, Bold Street is one of Ropewalk’s main attractions, keeping Liverpool as a top European destination. Packed with independent shops, restaurants and cafes, Bold Street is home to everything from world foods to records to please ever type of shopper.

Leaf

The food on offer varies from street food delights at Peruvian Chicha to world foods at Mattas. Paired with sweet tooth’s dream, Bold Street Sweets and loose-leaf tea house LEAF, Bold Street offers a culinary delight for every occasion.

Living up to Lonely Planet’s recommendation, News from Nowhere and Rennies Art Gallery provide a eclectic dose of culture to the bustling shopping destination.

Culture

Bluecoat

Bluecoat, a Grade I listed 300-year-old building in the heart of Liverpool’s city centre, is home a year-round supply of visual art, literature, music, dance and live art. Alongside the vast supply of culture, Bluecoat is also has a café, restaurant and additionally Bluecoat is home to a wide range of independent shops from jewellery to ceramics at the internationally recognised Bluecoat Display Centre.

FACT

Around the corner from Bold Street, FACT, the UK’s leading gallery showcasing everything in film, video and new media. Exhibitions at FACT are developed by a range of international artists working with everything from prosthetic hands to video games. Past exhibitions have included Shia LaBeouf answering people’s phone calls. FACT is also home to a cinema showing all the latest blockbusters and independent films, a bar and The Garden café.

St Luke’s Church, known locally as The Bombed Church, is Ropewalks’ most famous landmark. Missing its roof due as a result of World War Two, the church now hosts many different events from local markets to gigs and weddings.

Nightlife

Cafe Tabac, Liverpool

Ropewalks is Liverpool’s highlight for nightlife, known for the assortment of options. Where it’s a quiet Saturday afternoon drink or a wild night out, Ropewalks has a bar for every social event.

Hebbie Jeebies, Kazimier Gardens and Pogue Mahones are perfect for a relaxing drink while Café Tabac embodies nostalgia to match their cocktails and red wine collection. Located at the very top of Bold Street, Cafe Tabac is an effortlessly cool, velvet encased, candle lit bar with an eclectic hip hop soundtrack. The closest to a continental experience you’ll get in the city, this neon lit establishment is reminiscent of the Nouvelle Vague period, transporting you to a smoke-filled cafe in 60s Paris.

Transport

Liverpool Central Station

The icing on the cake of Ropewalk is its ability to get around the area, thanks to Merseyrail’s Central Station. Merseyrail are one of the top performing rail operators in the country services customers every 15-30 minutes to 68 stations across the region.

Final Note

The home of Liverpool’s independent scene, Ropewalks is a highlight for students, professionals and tourists. Offering everything from an exciting shopping scene to a booming nightlife Ropewalks is an amazing opportunity for residential, commercial, hotel and student property investment.

Ready to see Liverpool properties? Email us at info@tarquinjones.com for more details.

 

 

info@tarquinjones.comNeighbourhood Watch: Ropewalks, Liverpool
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Why invest in UK student property?

Why invest in UK student property?

Student property has proven to be one of the most reliable forms of investment for many buyers, both first-time investors and experienced landlords alike. The reasons for this are numerous, and I’m going to cover these in today’s article which will focus on the pros of investing in UK student property. High demand It’s no

Why invest in UK student property?

Student property has proven to be one of the most reliable forms of investment for many buyers, both first-time investors and experienced landlords alike. The reasons for this are numerous, and I’m going to cover these in today’s article which will focus on the pros of investing in UK student property.

High demand

It’s no secret that UK property in general suffers from high demand combined with low supply, and the student sector feels this problem just as much. Most universities across the UK do not have the capabilities to house everyone who attends, so this leads to more and more students having to turn to the private sector for their accommodation.

For example, Plymouth has 4 higher educational institutions which includes the University of Plymouth and has approximately 25,000 students across them. However, only 3,000 are actually housed within the university halls of residence.

Newcastle has the same issue. 50,000 students attend the cities higher educational institutes but 28,000 are unable to attain the universities accommodation. Various other cities across the UK have the exact same problem.

This creates a gap for private student property to fill the void and attempt to meet the growing demand. Students and investors alike are therefore turning to this type of student accommodation which in turn is leading to higher prices and sustainable returns for investors.

Rising number of students

More young people than ever are attending university and it’s no longer considered something for the privileged elite. Student numbers have almost doubled in the UK since 1992- figures show that from the period March-May 1992 there was 984,000 people aged 18-24 in full time education. In May-July 2016, there was 1.87 million, approximately 1 in 3 people, aged 18-24 in full time education.

Higher education is now commonplace, and this is all despite the rising tuition fees showing this is not considered a major deterrent among many looking to study in the UK.

High yields

Any investor whose primary goal is to achieve a high yield is best placed to pursue student property as opposed to most residential opportunities. The more affordable pricing along with the fact that student property isn’t known for its massive capital growth lends itself well to high yielding student deals in various university towns and cities across the UK.

We at Tarquin Jones have a variety of student investments that offer upwards of 8% net yielding rooms in thriving student cities such as Liverpool, Newcastle and Plymouth. Because of the fact that said student deals are in such popular cities, there is a long list of potential buyers for these. As a result, resell value for property in these cities is surprisingly good when you consider that student property is typically more difficult to resell than residential schemes. Buying a student unit(s) in a city with plenty of amenities nearby i.e. bars, restaurants, gyms, transport links etc, will help massively when it comes to selling your property as and when you want to.

Student’s growing expectation on their accommodation

Over the years, there has been a paradigm change in the lifestyle of UK students. Many are now shunning the previously traditional low rent second hand HMO properties as they see the new build purpose-built accommodation with higher expectations than they had done before. Value for money is increasingly becoming considered in terms of accommodation.

Increase in tuition fees has created a new breed of modern students who see the burden of increased financial debt should result in value for money in terms of the accommodation services being offered. Many investors are taking note of this attitude change and this is a major, yet understated, reason why many are choosing to invest in student property.

The size of the student accommodation market in the UK shows no sign of slowing down. With more student property in the private sector being developed in the country, there is only going to be a diversification of investment into the sector allowing those who wish to get involved the opportunity to invest their money in the student accommodation in various cities.

With the UK’s reputation of world class education combined with a rise in the student population, new build student property is proving to be a preferred asset class for the discerning investors looking primarily for high and sustainable returns.

For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details.

 

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Why to invest in Plymouth’s thriving student property market

Why to invest in Plymouth’s thriving student property market

One of the more overlooked property hotspots in the UK is going to be the main focus of today’s article. Plymouth has long been one of the countries best student locations, especially for those pursuing maritime based careers marking it as a niche location in which student numbers are on the rise. South West The

Why to invest in Plymouth’s thriving student property market

One of the more overlooked property hotspots in the UK is going to be the main focus of today’s article. Plymouth has long been one of the countries best student locations, especially for those pursuing maritime based careers marking it as a niche location in which student numbers are on the rise.

South West

The South West has been a very strong area for property investment over the past couple of years and has a four-year forecast of nearly 30% growth (almost 8% per annum).

Our focus area in the South West – Plymouth certainly remains one of the best cities in the UK for those wishing to dip into the buy-to-let market or add to their property portfolio. There has been substantial investment in the economic regeneration of Plymouth and it has swiftly become the go-to area in Devon and one of the optimal areas in the South West for property investment opportunities.

Regeneration

The 60,000m2 Drake Circus shopping scheme was a resounding success and not resting on their laurels, the council have been instrumental in the current plan to add an additional 86,000m2 retail development in the adjacent Cornwall St area.

While the council has clamped down on issuing planning consent for the conversion of dwellings to student accommodation – one of the major markets in Plymouth – this has only served to increase the growth potential for properties inside the golden triangle around the university campus (Mutley, North Hill etc). Perhaps as a result of the constraints on supply, there have been significant rises in rents for student accommodation, offering investors very attractive yields. This has led experts to posit Plymouth alongside Norwich and Bournemouth as some of the top cities in the UK in which to invest in student housing.

On top of this, in accordance with the City Centre and University Action Plan (2010) 700 new houses have passed through the planning stages of late and this development is planned to include an extra 2,000 car-parking spaces as well as a landmark department store.

Furthermore, elsewhere in the city centre, there is more potential for new development, as in Colin Campbell Court adjoining Western Approach, which boasts the potential for a mixed-use scheme, also outlined in the Area Action Plan. On top of this there is an ongoing plan (2006-2026) for the creation of new jobs and business services laid out in the council’s strategic economic plan.

Plymouth is also in one of the areas of the UK that was slowest to start the recovery from the market crash and while prices are now back up to where they were beforehand; this means that there is still a massive potential uplift for buyers investing today. This is confirmed by industry experts. Roger Punch, the South West spokesman for RICS, claimed: “It started to take effect elsewhere way back last year and caused the market to warm up and really get going. But it’s only just starting to reach us.”** A boosted confidence in the economy and initiatives like the ‘Help to Buy’ scheme have all helped to reinvigorate market, according to property experts.

In other news, the First Great Western rail service has in October 2014 announced a time-scale for the implementation of free Wi-Fi aboard its trains that service the South West, which is another attractive proposition for commuters looking to relocate to the region.

Student property

Academically, Plymouth has a longstanding reputation as an outstanding research centre, particularly in relation to marine sciences. The buzzing city of Plymouth is home to Plymouth University, The University of St Mark and St John (Marjon) and the Plymouth College of Art, which is one of only four independent colleges of art and design in the UK.

Between all of these establishments there are over 25,000 full time students, however only around 3,000 of these are accommodated within University halls of residence. As such, there is a real need for suitable student accommodation. Private student developments then such as North Hill Court are in high demand and are providing investors with high, sustainable returns the kind of which associated with student property.

Plymouth’s combination of regeneration and niche location as a hotbed of maritime studies make it a superb place to put your money into for student investments. Those after high and regular returns will find Plymouth to be an excellent location to achieve their investment goals such as self-funding their pension come retirement and maintaining their own lifestyles beforehand.

For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details.

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The step-by-step process of purchasing a Buy to Let property

The step-by-step process of purchasing a Buy to Let property

It’s one thing having the necessary funds in which to invest with. It’s another thing actually knowing the process of purchasing a Buy to Let property so that you invest your money appropriately. In today’s article, I will outline the step-by-step process of actually purchasing a Buy to Let property. Step 1 – Make sure

The step-by-step process of purchasing a Buy to Let property

It’s one thing having the necessary funds in which to invest with. It’s another thing actually knowing the process of purchasing a Buy to Let property so that you invest your money appropriately.

In today’s article, I will outline the step-by-step process of actually purchasing a Buy to Let property.

Step 1 – Make sure you are in a position to buy

This may seem obvious, but I have spoken with many prospective investors who loved one of our schemes on our website, requested all of the information on it and ultimately wanted to proceed. The only trouble was they didn’t have the money they needed to buy it!

So, the first step is to make sure you can actually purchase the property you want beforehand. This can either be done as a cash purchase i.e. buying the property outright or purchasing with a mortgage. This enables any buyer to essentially buy property of a much higher value than what your cash will allow.

Once you’re confident you have what you need, the process is as follows…

Step 2 – Reserve your property

Once you have picked out a plot you want to buy, you will need to reserve your unit and begin the purchasing process. This is done via paying a reservation fee to the developers who will then take your unit off the market. The amount you pay to reserve will vary depending on the developers themselves, but they can sometimes charge a flat fee from around £1,000-£5,000 or a percentage of the purchase price i.e. 5%-10%.

Once you have done this, your solicitor and a member of the developer/agents team will be in touch to guide you through the rest of the process.

Step 3 – Be prepared for some admin!

Your solicitor will have your interests at mind, and any good one will handle most of the process on your behalf, so you don’t have to worry. However, there will be documents to sign and information to provide to make the sales process a smooth one. This can include:

  • Your solicitor will order local searches – covering flood risks, contaminated land, historic mining, and more. It can take a few weeks for these to come in.
  • If the property is leasehold, your solicitor will order an information pack from the freeholder (which you’ll have to pay for) with information about the service charge accounts, ground rent, major works and so on. This can take a while to arrive too.
  • The vendor’s solicitor will issue a draft contract, which there will then be some back-and-forth about.
  • The vendor will provide information about the property, which will invariably have bits that are missing or confusing. Your solicitor will go through this and ask any questions that arise.

This all inevitably leads to the exciting part…

Step 4 – Exchange

This is the day in which you commit to the sale 100%. You will pay a percentage of the property price- this can be anything from around 10%-50% depending on the property- and both your solicitor and the vendor’s solicitor will exchange contracts.

Exchange usually takes place around a month after reservation. At this point, most of the admin work is done until completion of your property.

Step 5 – Completion

Before your property completes, if you’re buying with a mortgage, your solicitor will request the mortgage funds from the lender so they’re sitting in their client account ready for completion. Additional stamp duty charges, solicitor’s fees and possible extra funds needed for completion is all expected to wrap up the sales process here.

When the day of completion comes the funds will be transferred across to the vendor’s solicitor and the property will finally be yours!

Having a good team will help you immeasurably with all of this, but ultimately it’s your responsibility to keep things ticking along. There may be stages in this process, particularly leading up to exchange, in which not much will be happening and you won’t know why: is it because you’re waiting for searches, or has your solicitor not got around to looking at them yet, or is she waiting for the vendor’s solicitor to reply to her? It’s your job to find out, and to keep politely nudging the right person to get things moving again.

The important thing to remember is that once all of this is over, you will have an asset that will create wealth for you for several years to come. This step-by-step process is simply to let a first-time investor exactly what to expect prior to purchasing so you can go in relatively prepared for what’s to come.

For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details.

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How to boost your cashflow as an investor

How to boost your cashflow as an investor

As a professional Buy-to-Let investor, you always want to find ways to maximise your profits you make from your property investment. There are some neat tricks you can employ to make the most out of your BTL portfolio and make your margins that much bigger every month. Here, I will detail some of the methods

How to boost your cashflow as an investor

As a professional Buy-to-Let investor, you always want to find ways to maximise your profits you make from your property investment. There are some neat tricks you can employ to make the most out of your BTL portfolio and make your margins that much bigger every month. Here, I will detail some of the methods you can use to reduce your costs and increase profits on your properties.

Know the tax implications – and how to counter these

In recent years, the UK government has made an active effort to take even more money from landlords. An extra stamp duty cost and rises in tax has been just a couple of the ways the government is looking to take a bigger chunk of the profits. Despite all this, there are some tax breaks that a good accountant can help you take advantage of. These can include:

  • Purchasing property through a limited company- this means that your income gets taxed under the Corporation Tax rate instead of your total income tax. Corporation Tax rates are around half the rate of income tax that you would pay if you bought property in your own name. This can save you big money long term.
  • Purchasing a property through a non-working spouse- this means that you will be taxed less through income tax than you as a worker would if you bought a property in your name.
  • Know the stamp duty threshold and implications- Money Advice Service provide an easy stamp duty calculator so you know how much you stand to pay beforehand- (https://www.moneyadviceservice.org.uk/en/tools/house-buying/stamp-duty-calculator). This way, you know there are no surprises in terms of stamp duty.

By following these tips, you can set about maximising your income by circumventing some hefty tax hikes along the way.

Outsource your property to save on maintenance costs

Many people when buying property look to manage everything themselves. But when it comes to potential maintenance and repair issues on your property, it’s often better to use a professional managing company to take your house or apartment on. This not only saves a hell of a lot of time for the investor, as they don’t have to do anything with regards to property, it also cuts out any maintenance costs you might have had to pay out of your own pocket.

A hidden benefit of using an investment property manager is that you leverage its access to cost-effective tradespeople. These are professionals that have been vetted and tested. They are often hired on a retainer or similar contract by the property manager. Because this leads to volume work, the charges paid by the property manager to such tradespeople are often lower and those cost savings are passed to you.

Don’t jump the gun when it comes to buying furniture

After buying a property, the developers may offer a furniture pack for an additional fee. If your property is off-plan, I would wait until you have a tenant lined up before paying anything just yet. The reason being is that your prospective tenant may have several items of furniture to move in themselves, and the last thing you want is to shell out thousands of pounds for furnishings only to discover your tenant has everything they need already.

If your tenant does need furniture, then you can either pay for the furniture offered by the developers or look for something more cost-effective elsewhere. This is sometimes the better option to take as many high cost pieces of equipment or furniture can be just as liable to damage as a reasonably priced version of the same furniture.

Increase your rents – without overcharging

An obvious method to boost your cash flow is to simply charge a higher rent for your property. You must be careful when doing this however as you need to be able to justify why you are increasing your rents without overcharging. If your tenant feels your increase is unwarranted, they may leave your property and you are left with a void period you could have done without.

Check the average rental prices your properties in your area using Rightmove or Zoopla and compare them to what you are charging. Take location, bed space and pricing into consideration when adjusting your rents and you can keep on board a good tenant willing to pay a slightly higher price every month to increase your cash flow that much more.

Pay attention to your BTL mortgage costs

As you grow your property portfolio, you’ll be using new mortgages to finance your investments. The buy-to-let mortgage market is highly competitive. Every extra 1% on a mortgage of £100,000 costs £1,000 more per year. That’s £25,000 over a 25-year term. On even the most modest property portfolio, paying more interest than is necessary will cost tens of thousands of pounds.

By following the tips here, you can hit back against the niggling fees and costs associated with being a landlord and ensure that your cash flow is as high as it possibly can be.

For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details.

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Buy to Let mortgages – a rundown

Buy to Let mortgages – a rundown

Many first-time investors who want to buy property assume their price range is limited to the amount of cash they own. Obtaining a buy to let mortgage allows you to expand your portfolio faster than buying with cash and can give you a much higher return on your investment. In this article, we will discuss

Buy to Let mortgages – a rundown

Many first-time investors who want to buy property assume their price range is limited to the amount of cash they own. Obtaining a buy to let mortgage allows you to expand your portfolio faster than buying with cash and can give you a much higher return on your investment.

In this article, we will discuss just what mortgages are, the process of getting one and just how they can help you build your own property portfolio.

What is a mortgage?

A mortgage is a loan you can borrow from various lenders, most notably a bank, that you put towards buying a property. Many people use this to buy properties for themselves to live in, but others utilise buy to let mortgages to buy properties in order to rent out.

Typically, the maximum amount you can borrow from a lender towards a BTL property is 75% of the purchase price. This is paid back by the buyer in instalments over the mortgage term, which can be anything from 10-30 years. The property you’ve bought can be sold before then- it just means you have to pay off the mortgage you obtained sooner rather than later.

What can I use a mortgage for?

You can use a mortgage for most properties providing they are:

  • Habitable – so there’s a kitchen and bathroom, and somebody could live there in its present state.
  • Large enough- most lenders won’t touch any property below 300 sq m
  • It must be of “standard construction” – so it’s not made of wood or concrete, and it’s not a mobile home or anything like that
  • You must want the loan to run for at least a couple of years

Every lender will have their own criteria as to what they will and won’t lend on. Some will only consider properties in certain areas for example, whereas others are more open minded. Most will pay attention though should your property meet the requirements above.

Interest only vs repayment mortgages

There are two main types of mortgages available on a Buy to Let property- interest only or repayment.

As the name suggests, interest only mortgages mean you only pay off interest on the money you’ve borrowed each month. You will owe the full amount by the end of the mortgage term.

Repayment mortgages require you to pay off a portion of the mortgage as well as interest every month. The idea is that by the end of the mortgage term you will own your property 100% after having fully paid off what you’ve borrowed.

We feel that interest only mortgages are more practical when purchasing a Buy to Let property. A repayment mortgage requires you to pay more off every month which can heavily impact your rental returns on your property to the point where it’s hardly worth it. An interest only mortgage means you can pay off less- bear in mind also you are free to sell the property before the mortgage term expires on an interest only meaning you can pay it off easily (providing you at least get your money back at resell value).

What is required for a mortgage?

Since the financial crash back in 2007/08, lenders are much more restrictive in terms of who they lend to. Not just anyone can get a mortgage anymore. A mortgage broker can give you a more extensive insight into the intricacies but the basic criteria as to what most lenders look for is-

  • Someone in a full-time job earning good money
  • A home-owner
  • Good credit history
  • Owns an investment property already (preferable but not essential)

This type of borrower clearly has some degree of experience (without being over-extended), has a steady source of income elsewhere to service the debt, and has a track record of managing credit.

It’s very possible for someone who doesn’t meet one or more of these criteria to get a mortgage. It’s just that the further you diverge from the “ideal customer”, the more restricted your choice of lenders will be.

The process

A mortgage broker is a great option as they inform you of all the available products out there and advise you on the best options to take. It’s best to employ a professional in this field, particularly if you’re a first-time buyer and slightly inexperienced.

If you’re buying off plan property, you will get a Decision In Principle (DIP) once you and your broker are satisfied with the mortgage rates. This is confirmation that the lender will almost certainly lend to you once your property is closer to completion. This is offered early on as to definitively confirm you can actually get a mortgage- after all, the last thing you want is to get a few months away from completion only to find you can’t get lending.

Your broker, on your behalf, will make a full mortgage application. Your broker will inform you of the information you need to provide should they come back requesting anything further. Your DIP will help you at this stage as it shows you’re organised and creditworthy.

The next step is valuation. The lender will send a surveyor to judge the value of the property and the amount it expects to receive in rent every week/month. If you’ve bought in a good area with trusted developers who’ve done their research on all of this, then any potential problems are minimised, and you can breathe easy.

If the valuer is satisfied, all that’s left now is to wait until completion for the mortgage funds to be sent to your solicitor and then subsequently to the vendor.

And that’s the mortgage process from a layman’s perspective. A mortgage broker is ideal for this process and they can explain the steps in more detail, but hopefully this gives you a summary of what to expect.

For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details.

AdminBuy to Let mortgages – a rundown
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3 important questions for a first-time property investor to ask

3 important questions for a first-time property investor to ask

The most important asset required in order to invest in a property is the obvious answer (money!) but rather the will to do so. I’ve spoken with hundreds of procrastinating investors who have the funds to invest with but never actually do it. On the other hand, I’ve encountered several would-be investors who don’t have

3 important questions for a first-time property investor to ask

The most important asset required in order to invest in a property is the obvious answer (money!) but rather the will to do so. I’ve spoken with hundreds of procrastinating investors who have the funds to invest with but never actually do it. On the other hand, I’ve encountered several would-be investors who don’t have the money but through months of stringent saving eventually build up their deposit so they’re able to invest for the first time.

Before they do however, there are some important questions to consider before parting with any of your money. In today’s article, I will outline these questions that you should be asking as a first-time property investor.

What do I want to achieve as an investor?

Again, the simple answer is “making money”, but there are a variety of ways in which to achieve that as a property investor. Your money may be made through renting out your property over the long-term and making a regular, sustainable income that way. Or you may choose to buy and sell relatively quickly in order to make short term capital gains.

The Tarquin Jones’ ethos is to buy new build property in an up-and-coming area, rent it out over the long-term in order to earn an income, and then selling it years down the line once the area you’ve bought in has improved and raised the price of your property.

In order to achieve this, you will need to do your due diligence beforehand regarding the area you’re considering investing in and some number crunching to make sure your returns and resell value will be sufficiently rewarding for yourself.

Do I want to manage my property myself?

In my experience of speaking to first-time investors, many will naturally be looking for an investment close to where they live because they’re under the impression they need to be in order to manage it. This doesn’t have to be the case- in fact, many buy to let investors that I know have never even seen some of the properties they own because they live safe in the knowledge it’s earning them a regular income.

They are able to do this because they have employed an experienced lettings company in the vicinity of the property to handle everything from finding an appropriate tenant, ensuring they pay rent every month and dealing with any repairs or maintenance issues. This will all be in exchange for a small percentage of your total income (around 10% is common) but many landlords are more than willing to pay this for the removal of stress it provides.

However, if you want to manage everything yourself, you will need to deal with all of this yourself which is akin to a full-time job in terms of managing the upkeep of your property. Many investors don’t have the time, effort and means to combine all of this with family and work commitments. Because of this, I would recommend the hands-off approach when it comes to property investment, although a hands-on role can be profitable providing you have the time and dedication for it.

What are my expenses?

Plenty of different factors can change the property market. A change of government, an increase or decrease in interest rates, a large company moving into an area, and new infrastructure build are just a sprinkling of things that can affect property prices and rental income.

We recommend calculating your cash flow numbers on a two-year basis and revisit every year. When considering costs, remember to include the following:

  • Mortgage costs
  • Property management fees
  • Insurances
  • Maintenance and repairs

You should also make an allowance for void periods. You can do a back-of-an-envelope calculation as a first estimate, but you’ll need to assess more accurately before proceeding.

These are some of the key questions to ask yourself before you enter the world of property investment. By taking these into account, you will be doing your due diligence in terms of what you want to get out of your property investment.

For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details.

 

Admin3 important questions for a first-time property investor to ask
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Why to invest in property rather than live in it

Why to invest in property rather than live in it

Property investment is something that many want to do but are not able to do it just yet. Alternatively, there are those who do have the means to invest but don’t do so for several reasons. This may be down to fear, lack of education or just a general unwillingness to do anything about it.

Why to invest in property rather than live in it

Property investment is something that many want to do but are not able to do it just yet. Alternatively, there are those who do have the means to invest but don’t do so for several reasons. This may be down to fear, lack of education or just a general unwillingness to do anything about it. In this article, I will make the case for property investment and why you shouldn’t delay if you have the means to do it.

BTL and residential search the same thing? Definitely not!

Many first-time investors will be looking to treat a property as a place for themselves to live as well as an investment. This is the wrong approach to take- a residential home carries completely different objectives to those of a property investment, and because of this, many first-time buyers look exclusively within their local area. This limits the buyer to properties in one location as opposed to many across the country, and with a slew of managing companies providing a completely hands-off investment approach, this enables investors to look anywhere with no limitations.

Saving money

Expensive and ever-rising rents are straining young people’s potential for saving. In addition to consistently low wages and very little chance of a raise, young professionals are struggling to live within their salaries.

As well as this, having a relatively low salary, with little opportunity for promotion, is restricting the chance of getting a mortgage from a lender. The only viable route to home ownership for many people in the younger generations is borrowing from family or parents.

The top three suggestions for the best way to get on the property ladder revolved around relying on ‘the bank of mum and dad’ or other family members to help.

Investing as an alternative

Property investment could be the key to young people getting themselves into property ownership. Traditionally, the UK has been focused on owning and living in a property but opening the idea of buying a property to rent out could help first-time buyers on their way.

Investing money into property that can then be used to provide an income is a viable option for young people to consider. Once the mindset has shifted, they will find that it’s no longer a pipe dream, and they could potentially invest without relying on family help.

Securing a mortgage for a Buy-to-Let property isn’t necessarily impossible for people aged 18 to 25, although some lenders won’t allow it. There are group investment schemes open to young investors, and with some research and sensible decision making, owning a home could be safely within their reach.

Change in millennials approach

It’s becoming harder and harder for the younger generation to own their own property which is down to wages not increasing in accordance with rising property prices. Not only is there a financial side to this, but also a change in attitude. Many young people accept they won’t own the property they live in and welcome the flexibility that renting brings. Buying a property to rent out as opposed to live is therefore becoming more and more popular amongst young people

While the older generation is stepping up to help their children reach their goals of owning a home, it could be that there is another way. Home ownership need not be beyond the reach of younger people, but they may need to change their mindset and accept that they won’t be living in the property they buy.

Shared ownership

Around 12% of respondents said that buying a property with a partner or friend was the best way for young people. Around a tenth thought that a Shared Ownership scheme is the way to go. The least popular responses included marrying a rich person at 5% and buying an overseas property at just 1%.

Pitiful pension schemes and interest rates

Between the state pension and low interest rates, there is a big chance many will retire with a small pension fund and their money having accumulated little in the bank. An extensive BTL property portfolio allows you to self-fund your pension and live a life of luxury in retirement.

The rental income you attain will be enough to live the life you’ve become accustomed to, or you could sell large chunks of your portfolio for a huge profit. Either way, you are not reliant on any bank or pension fund to secure your future.

For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details.

 

AdminWhy to invest in property rather than live in it
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