4 Tips for Buying BMV Properties at Auction

Posted on February 24, 2011 by Rachel

Property auctions can be a great way of picking up an affordable property for a price below the usual market value. But unless you’re au fait with auctions and confident you know what you’re doing, the process can be a bit of a minefield. Here are 4 tips for successfully buying BMV property at auction.

1. Use the services of an expert company

If you’ve never bought a property at auction before and want to ensure you get the best deal, with no hidden costs, then it’s well worth using the services of an expert company, like HBF Investments. They’ll hold your hand throughout the process, doing all the hard work for you and ensuring you get the property you want, at the price you can afford.

2. Get finance arranged before the auction

One of the important aspects of buying property at auction, as opposed to through an estate agent or seller, is that you’ll need to get your finance properly sorted out in advance. If you don’t have the money available to pay for the property, then you could end up being fined.

3. Stick to your auction property budget

It’s beneficial to go to a property auction with a clear idea in your mind of exactly how much your budget is. If you want to have a bit of leeway, in case bidding is fierce, then set yourself a strict upper limit. When a bidding war erupts, it’s all too easy to get carried away with bidding, then regret the price you’ve paid later. If your ultimate aim is to make money on your property investment, then getting the right price is essential.

4. Do your research before the property auction

It’s essential to thoroughly do your research before you attend the property auction. That means checking out the properties you’re interested in by reading the particulars, visiting the building, checking the small print and legal issues so that you know exactly what is, and isn’t, on offer.

All too often people make the mistake of not researching a property, then bidding on what seems like a good lot, only to discover later that it’s not what they thought.

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Is It Worth Investing in Land?

Posted on February 17, 2011 by Rachel

The benefits of investing in property are clear, but if you see land for sale or at auction, is it worth investing in?

Land comes up for sale on a regular basis, both via land agents and estate agents, and at auctions. Prices vary depending on the type of land being offered, whereabouts its located in the UK, whether it’s in the town or country and the prospects it has for the future. If you choose carefully and buy wisely, land can certainly prove to be a good investment.

Like any property purchase, it’s advisable not to rush into a land purchase without doing your research first. If you’re thinking of using the land, either immediately or in the future, for a building project, then you’ll need to find out if there are any restrictions in place that would prevent you from building on the land.

It’s also worth finding out if anyone else has ever successfully applied for planning permission or had it turned down. Some land may even come with planning permission granted – but be aware that you could end up paying as much as 10% extra if this is the case. If you have entirely different ideas as to what you want to do with the land and don’t want to take up suggested plans, then you may be better off finding land without pre-accepted plans attached.

The first thing most people think about is to build a house or flats on any available land, but there are other useful projects that you could consider too. If the land is in a town or city, and especially if it may not be suitable for putting a residential development on, it’s worth considering whether you could use the plot to build one or more garages instead.

Garages and parking spaces are often in huge demand, especially in towns and cities, as we’ve explored previously. Building one or more decent sized garages would obviously be a lot cheaper than building a property, so you’ve less outlay to worry about, and if you consider adding basic facilities, it could double up as workshop space too.

Both garage sales and garage rents can bring in a decent amount of profit and a good return on your land investment. If the location is particularly desirable for garage lets, then renting it out could be a better return in the long run than selling it on.

So, if you fancy something a bit different, don’t mind some hard work and have ideas of your own to explore, it may well be worth giving a second thought to land investment.

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When Should a Landlord Raise the Rent?

Posted on February 5, 2011 by Rachel

The start of a new year is often the time when businesses begin to put up their rates and fees, but when is a good time for landlords to announce rental rises for tenants?

There’s been encouraging news over the last year that demand for rental property has risen and along with it rental prices have gone up too. If you’ve been looking at the data and admiring the rents being gained by other landlords, then you may well be thinking about how and when you could increase the rental prices of your own properties.

But unlike other lines of business, the arrival of a new year isn’t necessarily the best time for a landlord to announce rental increases. For a start, if you’re using a letting agent to handle the letting process for you, there may be a line in the contract preventing you from announcing sudden rental increases. If you do want to do so, you may need to give a certain amount of notice to your tenants – it can’t be a sudden, spur-of-the-moment idea.

In some instances, there may even be a clause preventing you from raising the rent until a certain time – such as not before a tenant has been in situ for one year or more.

No tenants are ever going to be all that thrilled to learn their rent is going up. Although some landlords may have benefitted from increased rents, statistics released by the Association of Residential Letting Agents recently, relating to the final quarter of 2010, indicate that 40% of landlords have reported tenants slipping into arrears with their rental payments. So this suggests that perhaps now isn’t the best time to add more pressure by putting the rent up.

Overall, it helps to think about the pros and cons of rental increases and the effect it could have on your existing tenants. For example, if putting the rent up could force them to leave, then do you really want to risk the potential of an empty property all for a few extra pounds per month?

It’s a tricky issue, but perhaps the best way round for everyone of handling rental increases is to stick to doing so when one set of tenants leaves and the property is about to be rented out again. The new tenants will need to take the rental fee into consideration when agreeing to the property and, hopefully, you stand more chance of them being able to afford it.

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New Year, New Property Goals

Posted on January 30, 2011 by Rachel

The tradition of making New Year’s resolutions is still going strong, but rather than making a pledge to go to the gym more often or eat less chocolate (things which often go to the wayside pretty quickly, not least if you’ve still got chocolate left over from Christmas!), why not think about your new property goals instead?

The New Year is a great opportunity to think about what property aims you’ve achieved over the last year and to consider what you’d like to achieve this year and beyond. For example, you may want to take a look at what rental yields you’ve achieved and whether you want to increase these in the next year, or next couple of years.

If you’ve currently only got one or two, or a small number of rental properties in your portfolio, then you may want to think about whether or not you’d like to expand these and how you’re going to go about doing so.

Your New Year goals don’t have to be huge or elaborate and if you’re happy just going along at the same rate, then that’s absolutely fine. But if you’d like to aim for and achieve more in your property investing life, making a list of your property goals can be a good plan of action.

You could either work them into a revision of an existing business plan you have, draw up a new one or simply make a list of your goals and put them somewhere clearly in view. In the case of easily achievable goals, such as reducing the amount of time between getting new tenants, ensuring regular maintenance work is carried out on your properties or upping your advertising game, these can be ticked off as you do them. It’s a great motivating factor to see a list of items that have been achieved, as well as more to aim for in the future.

Whatever your property goals for 2011, Happy New Year and good luck with making them happen!

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Landlords Sending Christmas Cards to Tenants

Posted on January 9, 2011 by Rachel

If you’re a landlord, do you send your tenants Christmas cards or give them Christmas gifts?

There have been interesting discussions amongst landlords recently regarding Christmas and whether or not to send tenants cards. Some landlords are firmly for it, believing that it can add a positive note to landlord-tenant relationships, whilst others are slightly more indifferent or choose not to send cards to tenants.

Perhaps surprisingly, there are even landlords who go to the trouble of buying Christmas presents for their tenants, such as a bottle of wine, or giving them a small monetary gift, such as £10. One property investor who owns multiple properties even claimed to spend hundreds of pounds on giving tenants Christmas gifts.

Whilst it’s certainly generous to give gifts to your tenants and likely to be a good way of keeping them happy, in most cases, a Christmas card should suffice. It’s a nice way of wishing your tenants a happy Christmas and for showing you care, especially in cases where you usually have little direct contact with your tenants.

Of course, not everyone celebrates Christmas, so you don’t want to put your foot in by sending a card if it could be seen as offensive. So instead of sending a Christmas card, you could consider sending a seasonal greeting or New Year card instead.

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Using Social Networking Sites to Check Tenant References

Posted on December 14, 2010 by Rachel

Finding the perfect tenants that will pay on time, keep your property in good condition and be a joy to have as renters is usually at the forefront of every landlords mind. Sadly, the perfect tenant isn’t always easy to find and, if you’ve experienced difficulties with bad tenants, then you may well wish you’d checked them out more thoroughly before you let the property to them. If you do wish to check out prospective tenants, then social networking sites can be a fantastic way of doing so.

If the type of property you’re letting attracts young families, professionals or students, then the chances are that they’ll be actively using one or more social networking sites. Even older tenants may be active in some form online. It’s quick and easy to run a search online using your tenant’s name and any other information they’ve provided you with.

Checking Out Tenants on Facebook

There are millions of people registered on Facebook now and a simple search could reveal some interesting information about your potential tenant. Depending on whether or not they have security settings in place, you may be able to see only a photo and basic information, or their whole Facebook account, photos, interests and details of their friends.

If your property is located in a small town or village, and the prospective tenants lives or works locally, then it’s even possible that you may have mutual friends or acquaintances. One landlord noticed this whilst checking out a tenant on Facebook and was able to email the mutual contact and ask for an additional character reference.

Checking Out Tenants on LinkedIn

On LinkedIn, you could check out a tenant in a similar way and get information that could verify their employment details, or even reveal that they’re currently not employed. Co-workers and employers often write references for people on LinkedIn, so it can be an interesting way of getting extra testimonials, if only regarding their attitude to work.

Looking Up Tenants on Twitter

On Twitter, you may be able to get an idea of the interests, social life or lifestyle of the person and the types of people they acquaint themselves with.

Finally, it’s also worth sticking the tenants name into a Google search too, as they may appear elsewhere on the Internet – such as cropping up in forums, on a work-related website, writing a blog or mentioned in news reports.

It may seem a bit like spying, but as a landlord you’re entitled to check out your tenants in advance. And, in all honesty, the chances are that your tenants may be doing the same thing and checking out their potential landlord too!

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Could poetry help sell properties?

Posted on December 10, 2010 by Rachel

Novel marketing strategies that help properties for sale or rent stand out from the crowd can certainly be beneficial. But if you’re keen to promote a property, have you ever thought of turning to poetry?

Poetry and property don’t usually automatically go hand-in-hand, but one estate agent in Brighton, East Sussex, is giving it a go. In a bid to get rid of ‘meaningless jargon and clichés’ from their property descriptions, and hopefully sell more properties as a result, the owners of the agency have recently sent their staff on a poetry course.

Since returning from the creative writing course, the staff are putting their new found poetry skills to use, writing poems and haikus (Japanese verses consisting of 17 syllables) to promote properties. A first floor flat costing £135,000, which was previously described as being, “bright and spacious and well presented throughout,” has been transformed into the following description:

“Autumn golden grove Shading tidy city pad Walk into Brighton
Balance the space with the location Nut huge, but so handy and tidy Where do you want to lay your hat? Try a place near Hanover haunts. Easy access to city centre and universities.”

Whilst poetry might not be your cup of tea, coming up with a creative or unusual way of promoting your rental properties, or properties you’re selling, can help attract attention from tenants or buyers. Words can be a powerful way of selling a property – or of putting people off – so if you’re writing a property description or ad, give careful thought to your choice of words and phrases. Dare to be different and think outside the box!

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Do you change the locks between tenants?

Posted on December 8, 2010 by Rachel

When you’ve got a rental property, keeping it safe and secure at all times is likely to be a high priority. With tenants in situ, you’re relying on them to keep your property secure, but do you ever change the locks when one tenant leaves and another arrives?

Changing the locks can be a costly procedure and something you may not have given a second thought too. But some landlords have had incidents when past tenants have kept copies of door keys and come back to the property long after they’ve officially left (one female tenant, for example, got a nasty shock when a past tenant let himself back into the property very unexpectedly).

It’s particularly worth giving thought to in cases where the tenants have left on bad terms – perhaps through not paying their rate, falling out with the property management company or due to being evicted – as they be more likely to think in malicious terms and misuse door keys still in their possession. Even when all the keys are seemingly handed in, it’s very easy for duplicate copies to have been made.

If you are thinking of having the locks changed between tenants, then make sure you allow plenty of time to book the lock change in and ensure that everyone has the correct versions of the keys. This includes a property management company, who make keep master keys on file, as well as new tenants and, of course, yourself.

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The benefits of location data for property investors

Posted on December 6, 2010 by Rachel

How much do you use location data when deciding where to buy property? According to recent research by Ordnance Survey’s Land and Property division, 80% of property investors and developers regard location data as essential, but 36% admit that they don’t always make the most of the data available.

As we’ve said before, carrying out thorough research before you purchase a property is essential in order to ensure you buy in the right place to make a return on a rental property, and the right property to attract the type of tenants you’re focusing on. There are all sorts of aspects involved in researching a property investment and, in addition to other research you may be doing, using location data alongside it can be very helpful.

In fact, location data can be an important tool for property investors to be aware of and use and should, ideally, be at the heart of the business tool kit for the property sector. For property investors and developers, location data can be used in a variety of ways:

• To highlight planning issues and land use.
• To find out details about boundary lines and geographical features.
• For demographic profiling – for example, to highlight the average type of tenants living in a particular area or the crime rate.
• To find out more about a particular property and neighbourhood.
• To help you pinpoint where to invest and, perhaps, where to avoid.
• To give an indication of any environmental issues to be aware of.
 
To find out more about the tools available for your property investment business, then Ordnance Survey is a good starting point.

Some mapping data and geographic information even became free earlier this year, with the launch of OS OpenData so you may find that there’s data available that you can get started with straightaway.

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Give your rental property a winter MOT: Part 2

Posted on December 2, 2010 by Rachel

The winter months have a tendency to bring with them very cold, icy, snowy and wet weather which can cause all sorts of problems for houses. But some common problems can easily be prevented by ensuring your rental properties are in good condition at the beginning of the season. Here’s part 2 of our essential guide to giving your rental property a winter MOT.

Winter Property Problem: Loose tiles

Loose tiles can occur at any time of the year, but they’re often made worse by heavy snow, rain or wind. If roof tiles are already loose, or if there’s particularly bad weather that knocks them out of place, then tiles can slip down the roof or even blow off.

Where tiles get dislodged, they can leave areas of your roof vulnerable to even more damage, increasing the risk of damp getting inside your property. If tiles blow right off the roof, as well as getting broken and not be suitable for re-using, their fall can damage other things. In the worst case scenario, someone could get hit by a falling roof tile, a vehicle could get hit or it could even end up causing damage to another area of your property.

In order to help reduce the risk of loose tiles, it’s a useful part of your winter property MOT to check the roof tiles on your rental properties. In the case of homeowners, they may be more aware of when tiles are beginning to become loose, but tenants are far less likely to notice.

If you’ve not got a head for heights and have no desire to be up a ladder, then it’s an ideal job for a maintenance team to tackle and, if loose tiles are found, they could be replaced immediately.

When the heavy snow, rain or gales do arrive, and your property MOT is complete, you can relax with the knowledge that the roof of your rental property is well prepared to deal with what it may face.

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