More Hidden Costs When Buying A Home

April 25, 2012 By Leave a Comment

Our experience in the property market, and particularly with property to rent in Liverpool means we’ve become accustomed to the house buying process. This post continues along the theme of hidden costs and how to make savings.

Making an offer and negotiating

If you’re making an offer on a particular property, the asking price must always be treated as a guide. The seller, like most negotiators, is trying to get the best possible deal and may not be expecting you to meet the asking price. It is very important to remember there will almost certainly be a counter off.

Deciding on an opening offer can be a precarious state of affairs. Too low and you risk alienating the seller or being outbid. Too high and you could end up paying too much for the property. It is prudent to firstly determine your maximum amount you’re willing to offer, and then consider how low you’d like to start your offer on the property.

To find this amount, glean as much information as you can about the sellers, the previous cost of the house (can be found on property aggregation sites) and the prices other homes in the area have sold for an current costs

Saving for a deposit

There are obvious benefits to putting down a large deposit when you start the home-buying process. The obvious one is that it will make it that much easier for you to get a mortgage. You’ll also immediately have equity in your property. The larger your deposit, the more protected you are in the event of your property dropping in value; the property would have to experience a drop in value the size of your entire deposit before you were in negative equity.

The first obvious step to saving a deposit for your home is to write yourself a budget. The second obvious step, and the one that will no doubt prove the more difficult, is sticking to that budget.

Evaluate all of your expenditure. Determine what is necessary (rent, council tax, etc) and what you could possibly cut back on or eliminate altogether.

Think about this;

  • Can I afford Sky TV?
  • Do i need to eat out more than once a week, can I bring food from home for lunch.
  • Do I make a lot of expensive phone calls?
  • Do I have too many credit cards? Should I consolidate my debt?
  • The gym membership i never use
  • Do I really need that new book/magazine/car/plasma TV/outfit etc, or do I just want it?

Thinking hard about these extra costs could really help you with paying a mortgage

Alternatively, If you’re looking for a house for rent Liverpool. Visit our sponsors at Bluerow Lettings.

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Filed Under: Study the Market, Tips For Landlords

Why Would You Buy A Property… Hidden Costs

April 10, 2012 By Leave a Comment

Do you know the full cost of buying a home?

 

Here are some expenses you will have to keep in mind.

The cost of your property isn’t the only price you see on in the estate agents window. For example, a lot of buyers, especially first-timers, go over budget on the purchase of their house simply because they haven’t factored in stamp duty.

This means if you have a property to let in Liverpool, you’re in a strong position, as prospective buyers simply wouldn’t be able to afford the full cost of buying a property… particularly first timers.

Here is what a buyer needs to think about;

Home Insurance

Costs vary with this one. It’s a postcode lottery, the same city and depending on your property could mean you pay as little as £170 or as much as per £700

You probably won’t be able to get a mortgage without having it, or at least having the intention too.

To keep costs down;

  • Shop around
  • Consider switching from your mortgage company to a general insurance provider;
  • Use a good broker that will shop around at renewal time for competitive quotes;
  • Fit high-quality locks on exit doors and windows;
  • Fit a smoke alarm and insurer-approved burglar alarm;
  • Join your local Neighbourhood Watch scheme;
  • Keep valuables to a minimum.

Stamp Duty

Stamp duty is a tax levied by the government on the transfer of properties. Depending on the cost of your property this will be a big one;

  • 1%: Properties of £125,000 to £250,000, but first-time buyers are exempt until 24 March
  • 3%: £250,000 to £500,000
  • 4%: More than £500,000
  • 5%: More than £1m, residential property only

If the purchase price of your house is less than £125,000 you won’t need to pay stamp duty.

Furnishings

Obviously these costs are subjective, but we all know that a bed alone can cost over £1000 and the same for a couch. If you haven’t budgeted, you’re new property could look really really minimal.

You don’t have to buy your furniture all at once, but I’d imagine a minimum of £10,000 to have a standard amount of furniture and fittings.

Moving Costs

If you have a few houses to let Liverpool, you’ll be very aware already of the moving costs. Few people realise that estate agent’s fees can be massive! I’ve heard of fee’s as much as 6% of the value of the property. Remember these are open to negotiation and can vary between 1% and up to 3% of the purchase price, depending on where you live and the state of the market in your area.

Actually moving will incur costs, and some of you may need a storage solution. You’ll need to be proactive in adding these costs to your budget.

Solicitor’s Fees

Expect to pay solicitors fees of around £550 for a house with a purchase price of £100,000.

So if you want to have a regular income and you have a property available to let, you’re in a very good position.

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Filed Under: Do your sums, Furnishing, Insurance, Study the Market Tagged With: , ,

How Easy Is It To Furnish My Rental Property

March 28, 2012 By Leave a Comment

We’ve been noticing in recent months that lots of prospective tenants who rent apartments in Liverpool, have been a little weary of properties that don’t have any furnishings. Well don’t worry, it isn’t the end of the world.

We’re going to split this post for landlords and prospective tenants.

Landlords

Some properties that encourage first-timers may not have much, if any furniture. You’ll identify this type of property because it will be at the more reasonably priced end of the market. Although this isn’t always the case, some landlords will already have basic white goods and a couch and bed.  Larger properties, can be be both furnished or unfurnished but as a landlord you need to be flexible on this issue. If you have a part-furnished or fully furnished property, it is easy to remove items dependent on the tenants requests.

As a landlord you should consider picking up affordable goods of that nature, and reconditioned or inexpensive white goods. You can either go the IKEA route with tables and bedroom furniture, or you could visit charity shops who have the most inexpensive larger items for sale.

Another tip would be to ask family, I know from experience that family members who have moved, or store lots of goods would welcome their spare furniture to be kept out of the way.

Tenants

Personally with my Liverpool flat rent, I didn’t have much furniture but also didn’t wish to accrue any.  The let was always going to be short-term, and I felt I’d like to buy new furniture once I purchased my first property. Anyway, I decided to ask my landlord to part furnish the flat to which they duly did. I specified what I’d like and before I moved in it, they fulfilled my request. What we’re saying is unfurnished or part-furnished isn’t a deal breaker, as landlords are in it for the long term and are very flexible.

The second possibility as a tenant would be to do exactly what most students do. I wanted Sky TV with a video (i know I’m old) and mini-hifi system. I went straight out and for less than £25 a month rented the whole thing. Businesses lease art for there walls, and landlords or you as the tenant can lease furniture at reasonable prices from companies.

Food for thought, but what we wanted to get a across is that flexibility is key.

 

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Filed Under: Decorate Your Rental Property, Furnishing, Smarten up rented property, Tips For Landlords Tagged With: , ,

Stamp Duty and Mansion Tax?

March 15, 2012 By Leave a Comment

It Might Be In The Budget

In this blog we discuss all the possible situations that may impact on your houses to let in Liverpool… this is no exception.

It is possible the government may use the Budget to announce they’ll build more homes. Will they overhaul the stamp duty system to help first-time buyers or will in concentrate on a mansion tax!

A few days ago, the NewBuy scheme was unveiled by the government, a new-build home could be purchased with a deposit of just 5 or 10 per cent. Obviously this is aimed at helping first-time buyers but what about other socio-economic groups struggling to recover from the economic slowdown. In our experience many homeowners not just first-timers are also struggling to recover from the slowdown.

Alongside this George Osborne is expected to unveil new plans that target the ‘super rich’ with a so called ‘mansion tax’. Around 45,000 homes in England and Wales are thought to be worth at least £2million and would be impacted, with roughly 80 per cent located in London.

Conversely, The Chancellor will also use the Budget to signal a major housebuilding programme which goes hand-in-hand with the NewBuy scheme, with plans for around 500,000 new homes and a relaxation of planning laws.

Many believe that property in the UK is over-taxed in comparison to neighbouring European countries and the Government should be focusing its attention on stamp duty to help get the property market moving. The Chancellor must take more urgent action to make it easier for first-time buyers to get on the first rung of the housing ladder – and to also make it less expensive for existing homeowners to move.

Although the impact of the duty is seen as particularly harsh above the £250,000 threshold, a price level which includes a quarter of first-time buyers in London and the South East the leafier suburbs of Liverpool, Merseyside and Cheshire will also be affected.

The numbers show that even buying a home for £275,000 for example, would see £8,250 go to the Government in the form of stamp duty. This will impact on the rental market, so if you have a house to rent Liverpool, you’ll be rooting for a stamp duty restructure.

We’ll have to wait till Wednesday to find out more.

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Is This The Right Time To Buy?

March 5, 2012 By Leave a Comment

Well… Should we buy?

Down the line, we care about Liverpool property to rent. But it’s important that buyers can actually get on the property ladder, so we do have rental properties to market. The news from those who know such things, is that property transactions are at an 18 month high.

The stamp duty holiday has nearly ended (end of March) and buyers believe that house prices are no longer expected to fall!

The impact of the stamp duty holiday finishing at the end of March means that market activity is currently at a frenzied rate, with savvy buyers hoping to beat the government, and get a good deal.

We’ve spoken to brokers and they believe that now is a time for renewed housing market optimism. Our contacts around the county are reporting confidence for the future, and a belief that the housing market has finally stabilised. Buyers believe the market won’t drop any further… in fact they feel prices are starting to rise.

Conversely, if you have property to rent in Liverpool, you need to work harder to market this property. You should look at a property management company who are experienced in marketing rental properties.

With the property market, sustainability is key, banks need to be flexible and this can only be reflected in affordable mortgage finance. This may still be a little out of reach for first-time buyers.

The good news for buyers is that increasing confidence hasn’t yet led to higher prices.

Therefore maybe now is the best time to buy… if you’re a first timer.

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Take Note When Renting Out Your Property

February 28, 2012 By Leave a Comment

Renting Horror Stories

In the last couple of weeks we’ve heard some real horror stories about tenants in various property to let in Liverpool. I thought I’d share a couple of quick stories then give you advice on how to avoid these pitfalls.

Problem – Not paying rent

Some of the most common and worst experiences involve this type of circumstance. Usually it’s a friend, maybe they’ve had some recent issues and need a house to let in Liverpool. You’re more open to them as prospective tenants, but take heed! We’ve heard horror stories from independent landlords about friends that only end up paying rent for the first couple of months, and then sneak away. You can sometimes be easily persuaded by people you know, as they imply the trust you need. The result is you skip over the must needed checks that are designed to protect you from this type of problem.

Resolution

Don’t even think of missing out on credit checks! Please don’t forget to take a security deposit… It’s a mandatory requirement. This will ensure your prospective tenants are not only solvent enough to pay, but have an incentive. Another trick is ‘power distance’ (the further you remove yourself, the more power you have)! If you have a lettings agent collecting rent, they can be as nasty or as nice as needed. They can collect rent from friends, enforce the rules, and basically do all the nasty work without any fear of compromising your friendship.

Problem – Renting to family

On request of another family member, you decide to rent to a cousin or relation you’re not that close with. They wreck the house, may sell some fixtures and furniture, and destroy your reputation with neighbours. When they leave, you need some serious repairs before you can bring in another tenant. They talk to family members and persuaded them that the property was already in disrepair and use phrases along the lines of… “when we moved in, the place was already missing…”

Resolution

The same resolution as above, checks, checks and more checks! You should always take detailed lists of the property fixtures, fittings, and previous damage. Walk round with the tenant and point these out to all interested parties. A lettings agent, will be vastly experienced at this and knows all the potential trouble spots. I can’t stress enough that letting agents just have an eye for these things, and will make sure the handover is watertight. They will also pull no punches! They won’t create any animosity between family and yourself, and will quickly be able to produce signed documents that can settle the disputes.

Problem -  Pets In The Home

We know of animal lovers who once they’ve their own place, start collecting animals. You may have initially only agreed to an outside dog, but later down the line, you’re made aware of lot’s of dogs and cats. Sometimes they may alter your garden, extra fences, I’ve even heard of a basements full of animal cages, that they couldn’t possibly keep clean and smell free!

Resolution

You must detail specific acceptable and unacceptable areas in the contract. You should have a keen dialogue with neighbours and if anything comes up, arrange a visit. Lettings agents will be able to give you air tight contracts which can include penalties for unacceptable additions to the property and unwanted animals.

Conclusion

Basically, you need to smart when renting out your property! A property management company can take away the hassle and be as involved as much or as little as you wish.

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Filed Under: Checking on tenants, Insurance, Pick tenants with care Tagged With: , ,

What’s Next With My Rental Property

February 15, 2012 By Leave a Comment

You Have Your Property To Let In Liverpool… Next Steps?

If you have a flat to rent in Liverpool, and you’re determined to do it without any help from any outside agents, you need to follow these next steps. We must stress that this is a quick rough guide, you must take into account many other aspects and recommendations when letting a property, to ensure your property management tenure runs smoothly.

Getting The Right Consent

The chances are the property you intend to rent is already mortgaged. It is very important that you ask your lender for consent to change to a buy-to-let mortgage. If you don’t, you may invalidate all sorts of agreements and terms of the mortgage which can have very serious consequences. Do you have a leasehold property? You must check your lease permits and make sure you’re allowed to let.

Get An Energy Performance Certificate

It became a legal requirement in October 2008 for a landlord to provide an Energy Performance Certificate (EPC) when renting out a building.  Any prospective landlords should include the energy performance graphs when they advertise their flat and this can be an excellent selling point with prospective tenants.

Advertise

How much should I charge? What do I need to take into account to cover all eventualities? This has always been the downfall of the property owner who intends to find tenants. You may have a perfect property to let, but how do you do it?

You should always take advice and understand that everybody is different in respect of commitment to renting a property. You could choose a tenant find service, let only service or a full management service.  Have a look at the different services offered and don’t be afraid to call up and ask

Important Checks

Safety checks must be completed before you rent your property and your tenant(s) moves in.

Gas and electrical appliances in rented accommodation should be tested and certified safe on an ANNUAL basis. In the event of an accident you as a Landlord must be able to prove that all appliances were safe. It is a legal requirement that a Gas Safety Check is carried out before a tenancy commences and re-tested every year. Use our Gas and Electric Safety Checks to comply with current legislation and cover yourself.

Ensure all furnishings comply with current safety regulations. Any furnishings, which do not comply with the regulations, should be removed or replaced prior to offering the property for rent. The 2004 Housing Act also requires the landlord to comply with fire safety regulations

Next Steps

If this seems a little too much, then a property management company will take out all the headaches… at very little expense.


 

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Filed Under: Full Management Service, Let Only Service, Services & Fee structure, Setting the right rent, Talk to your lender, Tips For Landlords Tagged With: , ,

Finding Resources For Your Property

February 5, 2012 By Leave a Comment

If you’re determined to take on the stresses of managing your flat to rent Liverpool, sooner or later problems will occur.

Even if you’re flat to rent in Liverpool does not currently have any issues that need to be fixed; chances are there will come a time when you need services like a plumber, electrician, heating and gas, landscaping and other services.

Each of these needs services need to be provided by a reliable, trustworthy trades-person with very good time management skills. Talk to local friends and neighbours and check reviews to find reliable service providers in the area, and make a list for you to keep in a convenient place. Landlords should try to develop contacts for trades-people they can call on in an emergency. Sometimes it’s more important to get someone quickly than having the cheapest service, so pay them quickly and well and they will always give you good service. This will save time and stress when you are in need of a home repair or service.

From searching for a housing investment, securing a mortgage, going through the closing process and moving your tenants into your new house; buying a house is a time consuming, sometimes stressful, but worthwhile experience. It may seem like an easy investment but time and market forces can also play a roll in making it an unpleasant experience

Make sure to take the time after things settle down to get organised and take important steps to protect your large investment. There are other simple steps that can help you save you money and frustration! You may consider a property management company who through economies of scale can save you considereable amounts of both.

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Can You Be A Landlord

January 27, 2012 By Leave a Comment

Can you handle it?

Many people decide to invest in property, you can create a passive income stream. Lot’s of people purchase a rental property with the intention of becoming a landlord.  Owning property is a good way of creating income, alongside the tertiary benefit that the property will usually increase in value.  However, if you have homes to let in Liverpool, you’ll know that being a landlord isn’t for everyone. You should consider whether or not you are truly cut out to be a landlord.

Renting Out Property Comes with Hassles

I know I’m not cut out to be a landlord, as the I’ve proved when I had properties to let in Liverpool.  Just the thought of the hassles that come with rental property have me worried and stressed out.  If I had to move, I would rather sell my home at a loss than rent it out while waiting for the housing market to recover.  But that’s just me.

Here are some of the issues I’ve had as a landlord:

Trying to collect rent: It’s difficult trying to collect rent, especially if I lived in a different city.  It becomes especially difficult if you have a tenant that gives you trouble about paying.

Repairs: Being responsible for general maintenance and repairs is also a massive hassle.  Some, more practical people enjoy doing the work, I didn’t.  And, on top of that, I don’t want to deal with the trouble of hiring someone else to do the work. Then I’d have to pay them out of the profit income.

Cleaning it up after tenants leave: Another issue is cleaning up after tenants leave.  What if they break something, or had pets?  Once again, you can hire someone to take care of those things, but it comes out of your rental income.

In the end, I have seen lots of friends I know trying their hands at being landlords, and running into no end of trouble.

Before you jump in and become a landlord, make sure you think through the hassles that might be a part of your duties of being a landlord.

Alternatively, I would recommend using a property management company to take out the stress.

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The 2012 Rental Market

January 14, 2012 By Leave a Comment

What Does 2012 Rental Market Look like?

Looking ahead to 2012, lettings agents predict the market will be similar in terms of strong demand, but that property stocks will begin to improve as investors turn to the PRS as a viable alternative to the volatile stock market and low interest rates. “We are seeing a small but significant increase in enquiries from buy to let landlords seeking our advice at the initial stage of purchasing which suggests that investment in the PRS will increase,” comments Ms Thompson. “Those who are investing now are benefiting from the lowest purchase prices for years and can expect yields of 5 or 6 per cent with good prospects for capital gains in the long term. We are also seeing a number of larger scale investors return to the market, diverting capital back into property. However, due to the financial climate, investors are being very cautious over their choice of property and will only proceed where they can secure a very competitive purchase price.”

In addition to new investment, we expect more rental properties to come onto the market in the coming months from people giving up on the sales market, and from people who inherit property choosing to let rather than sell in the current market… good news if you wish to rent a flat in Liverpool. We are also seeing some long-term tenants moving out of the sector once they have saved a deposit to buy their own homes which is freeing up accommodation for new tenants. “An increase in rental properties will benefit everyone in the lettings market and facilitate more movement for those relying on the PRS over the medium to long-term, says Ms Thompson. “Many couples and families need to move up the rental ladder to larger properties which will ensure continued demand across all property types.”

Whilst market conditions for houses to let Liverpool will remain positive for landlords, they look set to improve for tenants in 2012. But we have a warning about the continued lack of legislation in the industry. Says Ms Thompson: “2011 saw the government confirming that it has no plans to regulate letting agents, a decision we are very disappointed by. At a time when more people than ever are turning to this sector, landlords and tenants need protection from unscrupulous and incompetent letting agents. Many are unaware that there is no proper regulation governing letting agents, despite the plethora of legislation that applies to letting itself. If letting agents do not know and comply with the regulations, properties can be unsafe, client money can be at risk and the landlord’s and tenant’s interests unprotected during the tenancy.

With formal regulation of letting agents unlikely, our advice to landlords and tenants is simple: only use an agent with many years experience, a good reputation and above all, that is a member of a professional body such as ARLA, NAEA or RICS. These organisations are self-regulating and ensure that member agents comply with a rigorous code of conduct and that clients’ money is held in separate, properly protected accounts.

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