Main Issues to Consider in Rent to Rent

Rent to rent is a property investment strategy which allows property investors who do not have the capital to outright buy a property, rent from a landlord with the purpose of multi letting to tenants. Rent to rent is an effective way of generating income whilst investing less.

forex trading chart Making Sure You Are Covered

Rent to rent does however come with potential issues which must be considered before investing in order to avoid making any potentially costly mistakes. If you are planning on sub letting, it is imperative that the Landlord understands your intentions with the property. The reason for this being, they may not be covered for that particular type of venture.

forex blog romania HMO Licensing

In some areas of the UK, if a property is intended to be rented out to multiple occupants, it has to pass the HMO (house of multiple occupancy) rules in order to obtain an HMO licence from the relevant local authority. We won’t list the specifics of what is required from a property in order to pass, but it is important you make sure the property is licensed if required. This is both the Landlord and your responsibility.

http://brisadowski.com/dqy/7097 Landlord Property Insurance

Landlord Property Insurance must be considered before sub letting. It is not a legal requirement, however in the event of the building being damaged by a fire, flooding etc, you may be stung with a costly bill of repairs as the tenants are now your responsibility. It is important to shop around and find the policy that best suits your intentions with the property.

how we trade options free book offer What Contracts Need To Be In Place

Contractual obligations such as the property owner being bound by a clause in their mortgage contract, can mean traditional subletting and tenancy agreements are not appropriate. If a property owner still has money to pay on their mortgage and their mortgage agreement specifies they may not sublet, you and the owner will need to draft a management contract.

Management contracts involve you paying the owner a monthly fixed sum for managing their property, in this case you will draft your own rental agreements. This ensures that no subletting is happening on the owner’s behalf which may infringe their own mortgage agreement.

see Educate Yourself Before Doing Anything

The world of property can be difficult to navigate for newcomers and those experienced in the sector. Many potential mistakes along the way have the potential to hinder your return on investment, so it is important to first entirely understand every aspect of subletting before investing your time or money.

What is a Rent to Rent Strategy

go As a business dedicated to providing clear and direct advice on a range of property investment strategies, ownership and management, The Property Mentor is here to answer any questions that you may have.

get link A phrase that has become very popular with entrepreneurial property professionals taking their first strides into the property market, and one that we’ve repeatedly been asked to clarify recently is rent-to-rent.

follow site What is Rent-to-Rent?

Rent-to-rent is the process whereby a tenant elects to rent a single property from a landlord and then decides to convert it into a house of multiple occupancy (HMO), inviting more tenants to share the property by renting them a room.

The process is especially attractive to entrepreneurial professionals who wish to gain an income from a property that they’re currently renting from a landlord. This is 100% legal – providing that the landlord is aware of, and agrees to the intentions of their tenants.

Rent-to-rent can also be especially attractive to landlords with properties that they haven’t the time to actively manage, are happy taking a small income from tenancy, and agree to allow tenants to convert the property from single to a multi-occupancy.

follow site How Rent-to-Rent Works

Once a tenant agrees to rent a property, they’re responsible for making sure that the single-let cost of renting the property is paid to the landlord each month.

The rental cost of the property includes a profit margin for the landlord – once the mortgage and monthly property running costs have been accounted for. This is the single let rate and represents a monthly return on a landlord’s investment.

A multi-let or rent-to-rent property gives tenants the opportunity to make a profit margin on their rental costs each month by charging rent to the tenants they have invited to share the property.

http://www.chalkstreamflyfishing.co.uk/dau/3637 The Takeaway

In simple terms, rent-to-tent is the process whereby tenants agree to rent a property from a landlord whilst simultaneously earning a rental income by letting space within the property to one or more additional tenants.

 

How Do I Find Lease Options

One of the more common questions investors ask about their property investment options is how to find vendors to discuss the possibility of a purchase lease. The Property Mentor can provide expert knowledge to anyone wishing to find out more about purchase lease options.

forex kraken system download Targeted Approach

There is one fundamental difference between finding vendors willing to consider purchase lease options and vendors solely interested in a standard property exchange and that is how you target vendors. Investors who adopt a targeted approach will be able to match their investment goals with the ambitions of vendors.

When undertaking any form of property lead generation activity, it’s paramount to streamline your demographic and take a targeted approach. This gives investors the best possible opportunity to connect with property owners willing to consider purchase lease options.

follow site Purchase Lease Defined

The process whereby tenants agree to rent a property from the owner for an agreed period and then purchase the property once they have secured the necessary finance, is known as purchase lease.

We’ve previously covered everything that you need to know about purchase leases in our video ‘What is a Purchase Lease Option?’ To learn more, click the link here.

forex predictions today Simple Property Marketing

Given that purchase lease options cover long term property rental and eventual ownership, there are several property marketing exercises for investors to engage in.

Effective property marketing doesn’t have to be complicated. You could write a short professional letter or colourful postcard outlining your interest in renting long-term before buying a property in your local area and then distribute them to properties that pique your interest.

This approach is employed by estate agents across the UK to proactively find homeowners that are willing to sell their home. Most homeowners will have experienced receiving a letter like ‘Mr and Mrs. X have a budget of X amount and are looking to buy a property on your street. Please call (telephone number) if you’re interested.’ This is an example of proactive and simple property marketing.

The benefit to this approach is that you can appeal directly to homeowners who are interested in renting or selling their home. Each letter or postcard should be simple and friendly. Make sure that you include your contact details to make it as easy as possible for interested parties to contact you.

However, there are many other ways that you can target landlords or find tenants that are currently renting a property on a short-term contract who would prefer a long-term lease with the option to buy.

go to link Further Actions to Consider

There’s still a wealth of homeowners that use private adverts to sell property. It’s always worth checking online and print property publications and resources. You may just find the perfect lease option.

You could also contact local or regional estate agents. They may have property listings that aren’t generating much interest amongst buyers. This gives you the opportunity to propose a long-term let as a solution.

Choosing the right property

Astute property investment begins by choosing the right property. The primary consideration for any investor should always be the amount of money that you intend to spend when buying the property.

However, if you’re looking to make a month-on profit from your investment, it’s paramount that you consider the ongoing costs of ownership.

Leveraging the Costs

Let’s say that you want to purchase a property for £100,00. When making the purchase, most homeowners choose to leverage the cost by borrowing from the bank.

Once you know your monthly mortgage repayments, many people only consider one factor – what can I rent the property for each month versus the cost of the monthly mortgage repayments?

Using our example, and depending on the type of mortgage you opt for, your monthly mortgage repayments may cost £300 per month, with a property has a rental potential of £550 per month. Does that mean that each month you will achieve a £250 profit for the length of time that you rent the property? Not necessarily.

Property Running Costs

It’s fine to calculate that our example will yield a £250 profit for investors each month, however this is without considering the ongoing costs of running the property.

By not considering the ongoing running costs of your investment, you risk not achieving a higher month-on-month yield.

Just as you should consider the cost of purchasing the property to help you understand the right mortgage for you, understanding what you will have to pay towards the monthly running costs is also essential.

Without a meticulous understanding of the cost to purchase and the monthly running costs, you won’t be able to calculate an accurate monthly rental price – one that covers your mortgage and the ongoing property running costs.

In addition, to effectively manage the property, a letting agent will be required. You should also factor in any maintenance costs, and any potential transitional periods where you will be without a tenant and rental income. Other property running costs also include building insurance.

How Much Should You Put Aside for the Property Running Costs?

There is no accepted amount or percentage that investors should devote to the running costs of a property. However, there is a way that you can calculate the amount necessary for your property running costs.

The cost of managing the property through a lettings agent should be approximately 10% of your mortgage costs. Any property insurance should cost around £20 a month. To effectively cover any maintenance and property rental voids, you will need to devote approximately 10% of the total monthly rental income.

The Takeaway

These simple calculations can help you to understand the amount of profit that you can expect to make from property you intend to rent, and understand if it’s a sound financial investment.

Finding deals

The first question that property investors enrolling on our property mentoring and coaching programmes have is about finding great deals.

With some tested and proven strategies, it is possible to strike gold with each property, and raise your credibility and confidence as a smart property investor.

Zero in on Repossessed Properties

Properties reach possession stage when the owner fails to clear the mortgage on the property. Banks offer attractive discounts on such properties as they usually want to clear the pending loan as soon as possible. In addition, delay in selling the property forces them to spend on its management.

Given these drawbacks, banks show willingness for negotiations that can greatly work in your favour. Local estate agents, neighbourhood residents, welfare associations, and public records, are your valuable sources of information on repossessions.

Gather Local Knowledge and Build Trust

Narrow down your focus to a target market. Gather local information on recent divorces, bankruptcies, probate and evictions. Most of such information is available through public records. This strategy will give you a clear direction to base your efforts on.

Follow up with the people concerned through post cards, email, and phone before meeting them in person. People usually have a sentimental attachment to their properties. It is therefore essential to build trust through initial meetings and then move towards making a deal.

It is equally important to listen to the people involved to understand what they really want. This insight will enable you to create a win-win situation.

Approach Vacant Property Owners before others Do 

It is crucial to reach owners of vacant properties before they list their properties for sale or hire a real estate agent for the same. Again, gathering timely information is key to success here.

Look for properties that are unoccupied. The owner might be an individual who inherited the property but is not sure about the best way to handle it as he or she lives in another city or country. Such owners are more often willing to accept the first offer they receive simply because they want the property off their hands fast, gaining as much benefit as possible in the process.

There are also properties that are rented, but the owner is unhappy with the tenants. Such properties too are ripe deal-earning targets.

Patience, reason and perseverance are crucial to be a successful property investor

Collaboration with Your Property Network (YPN) – Susan Alexander; Founder The Property Mentor

Your Property Network

Your Property Network

 

 

 

 

 

Your Property Network magazine and myself would like to personally invite you to join us for the launch of the UK’s first online live YPN Manchester property networking event on Wednesday 4th May at 8pm.

Hosted by myself, I will be joined by guest speakers Nikki & Patrick Hopgood from Hopgood Property and panelists Pamela O’Brien, Annabel Jardine-Jones and Andy Thompson who are full time property investors/developers and industry experts.

The team will be sharing with you their knowledge and experience and answer any questions that you may have about the opportunities (and challenges) of investing in Manchester and surrounding areas.

The event is totally FREE so make sure you don’t miss it and sign up today. Spaces are strictly limited (This is a VERY interactive event where YOU will get to ask questions and contribute to the discussion)

To register, simply CLICK HERE and don’t forget to mark the date and time in your diary.

All that is left to do is to make sure on the Wednesday 4th May at 8pm you grab yourself a cup of tea, your laptop, sit back and relax in the comfort of your own home and join us along with other like-minded individuals and discover how you can change your life through investing in property in Manchester.

We look forward to sharing this fantastic event with you.

Susan Alexander                  &               Anthony Lyons
Founder,The Property Mentor              Editor, Your property Network

 

 

 

 

 

Buying property in London? – Susan Alexander; Founder The Property Mentor (TPM)

Over the last decade property prices have gone up sufficiently enough in the Capital to squeeze out a significant number of potential property investors from being able to build or enhance their portfolio with property in London.

Added to that the increase in the number of overseas investors saturating the London property investment market, and it becomes even more of a challenge to make inroads.

Yes, there are still investors, who are able to get property in London, but it is continually becoming harder for most to invest, without appropriate knowledge, education, support and access to money.

How can you like other investors then, get your foot on the ladder, and tap into the potential benefit that property investment in London has to offer.

Well there are a number of Crowd Funding Platforms springing up, as I have already discussed/raised via the newsletter before, and you may already be aware of these yourself, however I am always keen to share with you, exciting new developments along the way, that may be of interest to you, and has the potential to help you on your property investment journey.

I want to share with you, news around an exciting opportunity from Crowd With Us (CWU),

Let me tell you a little about these guys…

Crowd with Us was formed to not only run a business that is ethical, but to open up the property market to all levels of investors and help those such investors benefit from the wealth created.

Rob Wilkinson, (CWU Director of Operations & HR) also Paul Higgs (who is on CWU Advisory Panel), have both been former clients of mine through my coaching and mentoring business; The Property Mentor, and I have also know Thor Portess (CWU Finance Director) for many years through the property investment environment, and networks. They have a wealth of experience between them, and are actively involved in creating opportunities in the property and businesses arenas.

I’d invite you to take action and learn more about Crowd with Us, consider registering to see and keep up to date with potential opportunities they may have, which might appeal to you or someone you know in your capacity as a property investor

Click Here

Rob Wilkinson

Rob Wilkinson

 

The Referendum is Coming! – Susan Alexander The Property Mentor (Founder)

The date is set, and it has been positioned as the most important referendum in the UK since 1975.

There is an element of the unknown with a referendum of such importance, because there is no certainty of the level of impact that it will have on many levels.

Clearly it won’t have an immediate impact, and if the public vote with their feet on the 23rd June then changes will occur over a staged period no doubt.

So where would it leave property investors, in particular those that have an interest in investing in commercial property…

The commercial property market (in particular cities such as London) has a large representation of European Businesses especially banks, and therefore it is assumed that they will move their businesses out of the UK…although this IS speculation and not a guarantee.

What are your thoughts around how leaving the European Union may affect/impact (if at all) your property investment journey.

Why not engage with us on Social Media and start the conversation…

Check out this article for additional perspectives around this topic here

 

Stay on budget with your Renovation project

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Before buying a renovation project you will most likely have considered the cost of the renovation and worked out in some detail what needed to be done. Well, in an ideal world that is what you might do before you buy, however the reality is often different for many reasons. When it comes to offering on a property it can sometimes be difficult to obtain enough access to the property, or to create the time required for you to get detailed quotes, therefore in many cases progress with offers are made based on a best guess renovation calculation.

Regardless of the detail applied to your renovation calculations prior to buying, it is likely you will have established a budget you need to achieve in order to make the profit you want from each project. Therefore, it is essential to come in on, or under budget to maximise the returns.

If like many other investors both new and experienced that I have spoken to you find it challenging to stay on budget and often find you spend more than you thought, I’d recommend using the following four C’s. These are the steps we share in some detail with our clients to assist them in staying on budget for their renovation projects.

Categorise – split your project into sub sections to cost the work from the outset. This can be done in a few different ways, however the most effective tends to be by trade or by job required, for example you might list out the different trades you require and create a list of the likely works you will need each of them to do. By breaking your project down into smaller categories or sections you will be able to obtain more detailed level quotes without the different trades necessarily visiting the property at the outset.

Using this information you could build a project plan for your renovation with costings attached, allowing you to track more closely how your actual costs are doing against your budget when the project is live.

Contingency – Allow for the unexpected to happen, as it inevitably will. Working to a standard % (say 10%) of your budget as a contingency, is certainly a good place to start, however consider the level of work and the age of the property, as these can have a greater impact on the amount of contingency you may need. Working on older properties can uncover things you were not expecting, albeit this is not always the case it is important to have a reasonable amount to cover unexpected items.

Control – Keep a very close eye on your renovation project from start to finish. Do not leave the builders or other trades to just get on with it. Majority mean well, however if you are not ensuring the project is moving forward every single day and week, you can be sure it will slip in time and money. When you are undertaking large renovation projects there is clearly alot of work to be done and if you don’t have a close eye on the work and the cost, a few hundred pounds overspend in a number of areas and a few extra weeks of finance costs will not take long to completely wipe out a contingency budget, and that is before you find something unexpected!!

Choices – before you commence identify at least 3 potential items that can be removed or reduced in your project to save money and/or time without affecting the overall finish and potential resale value. There will be times during most renovation projects where you feel the costs are increasing and causing you concern. It may be possible for you to manage through this without too much worry, and see the project though without compromising on the works planned. In some cases however you may hit challenge after challenge with the costs and timelines starting to edge out of control. When this happens it can be difficult to see things clearly, and therefore having identified where you can save money and time prior to the start of the project when you were thinking straight, you know you can safely remove or reduced these which will help towards regaining some control without affecting the resale value of your finished property.

By using the 4 C’s on your renovation projects you will have a much stronger chance of staying on budget with your renovation projects, and ultimately protecting the profits you started out to achieve.

For more information on how we can help you on your property investment journey, or to book a free coaching call to discuss any areas you need help or take a look at some of TPM resources that might help you – visit www.thepropertymentor.com

Wanted – ‘Individuals interested in becoming a successful, property business owner’

Are you a person who is aware of the potential of property investing, have you built your own portfolio and recognise how property can change your life and the lives of others around you. Are you someone that wants to make a business out of property, but don’t want to go down the route of setting up a property management company? Do you get a buzz out of helping others succeed and want to explore how to do this as a business where you can get rightfully rewarded for your knowledge, experience and expertise.

If you think the way we think, then we at TPM have some great news for you…

Here at The Property Mentor we are revolutionary property entrepreneurs and top notch property mentors who are ready to show you through our coaching and mentoring franchise package how success in a property business can be made.

You can gain some insight on this from a smart, imaginative and innovative property entrepreneur who has built a significant property investment portfolio, several property businesses, and has accumulated unparalleled success from her years of leadership and executive management skills as the leading property coach and mentor.

We have set up The Property Mentor as a Property Coaching and Mentoring Franchise, where you can become part of our team and build your own business at the same time. You will receive full training from Susan Alexander, and The Property Mentor Team, as well as having access to our state of the art and masterfully crafted systems, model, property entrepreneurship programmes, resources and products…then you will be in a position to write your own success story.

Don’t you think that this is the time for you to go to an isolated corner, have a seat, get a cup of coffee, take a sip and ask yourself…

If you really think that property is the mantra which can change your life forever…then it is time to sink your teeth into it, and ask us for more information on this opportunity RIGHT HERE

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