Tips for buying to let during a recession

As we are all aware, property prices across most of the UK have been in decline. As a result, many property developers have panicked and sold off a lot of their properties, often making a considerable loss.

This fear of losing out tied in with a fall in demand which meant many properties were being sold for much lower than their original price.

Despite early signs of improvement in the market, there are still a lot of bargain properties to be had.

However, as confidence grows and the market improves, so too will house prices. When employment figures and market confidence improves, demand goes up and so do house prices.

It should still be remembered that the market is still unsteady and if you are to take advantage of the market, you must do your research and plan for every eventuality.

• Research - It is important to consider what is popular in the market, ask your agent what kind of properties are selling. Remember, you are not buying for yourself. You should also consider the surrounding areas and factors such as the nearest school, transport links and parking. Buying to let in your local area is often wise since you will know the benefits and pitfalls personally.
• Renovation - Ensure you purchase a property that is in good condition. It may seem like an appealing project to renovate a property but extra work costs you extra money. A property that requires very little work will make you the most money. You should also be aware of properties with a lot of woodwork and large gardens. Such properties will require a lot of maintenance and will most likely add little to the profitability.
• Preparation - "A good landlord should ensure they have thought of all eventualities and have plans in place should problems arise," . Landlords should also factor the costs of tradesmen into their business plan to avoid unexpected costs.  "Sometimes things can go wrong, so thinking ahead is likely to save money in the long run."
• Insurance - "Take out Rent and Legal Insurance,"  "In this current climate circumstances can change and insurance is there as a precautionary measure. The cost of the policy is likely to be far lower than the estimated costs if the tenant falls into arrears."

• Management - It is important to have a hands-on approach to your property. If you are unable to do so because you work full-time or you own multiple properties, be sure to delegate to a professional external party. Either way, it is crucial to set deadlines and budgets and if this is your first time, make sure you seek as much advice as possible from those who have done it before.

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Appliances - looking after them and your tenants

When letting your property, you do but a good deal of faith in tenants to look after expensive items and probably those at the top of the list will be white goods: fridges, washing machines and tumble dryers. These appliances aren't easily damaged, but they do take some maintenance and they require some care to protect them in the long run. So how can you make sure your tenants are looking after your appliances?

Leave Instructions and Manuals

You don’t want to bombard your tenants with information when they first move in, but you do need to make sure that they know how to look after your appliances: different makes and different brands often require very different treatment. Leave a folder of appliance manuals for your tenants when they move in and why not write out a few instructions on cleaning: removing filters from tumble dryers is always a classic problem.

Be Open to Calls

It can be frustrating when a tenant rings up asking how to change a lightbulb or how to lock the front door, but it’s important to be open to calls and to try to help as best as you can. Make sure that your tenants know they can call you if they have difficulties – it will help to protect both your relationship with your tenants and your appliances!

It’s best to establish a protocol with your tenants as soon as the move in when it comes to appliances: you then can be sure that things are being properly looked after. It’s good practice to leave some information so your tenants can troubleshoot themselves, but at the end of the day the most useful thing is your mobile phone: just keep in touch.

Is your Property your Pension?

Given that, according to statistics released by BRDC Continental, an independent research organisation, 81% of landlords view their property as a pension, it’s quite likely that yours is too! This figure is staggeringly high but not all that surprising given the economic uncertainty we’re experiencing at the moment. But are too many landlords putting their eggs in one basket: is property the right sort of asset for the pension fund?

Property Accumulates Slowly

The average length of a mortgage in the UK is around 25 years and that tells you something about how value can be accumulated on property. Property investments do take time to mature and, therefore, property lends itself to long-term investment. Investing for the long run also allows time for the costs void periods (loss of rent, mortgage interest and unoccupied property insurance to cancel themselves out.

Property CAN Crash

On the other hand, property is never a guaranteed safe asset and though we have seen steady and significant growth for many years, that won’t necessarily continue. It’s always difficult to spot a bubble before it ends, but even after a year of flat prices, property values don’t necessarily correspond to their current prices. This isn’t a phenomena unique to property, though and it affects all asset classes.

Pension Planning and Liquidity

A house is only worth anything in financial terms if you can exchange it for cash which, of course, relies on you finding a buyer. If you are relying on property to fund your pension then it is worth thinking about how and when you are going to convert your property into something more liquid, i.e. cash. With property it’s just about taking the market at the right time and a better investment can sometimes be had from selling up two years earlier than you wanted.

Undoubtedly property can be a strong performer in a balanced portfolio, but don’t assume that a property investment is infallible. It takes time, effort and investment to make buy-to-let property work and that’s why the returns are so great.

Middlemass Court Falkirk FK2 7ER- £450pcm

This stunning top floor flat comprise's of entrance vestibule, reception hallway, bright lounge, two generous double bedrooms, one with fitted wardrobes and the other with storage facilities, an attractive modern fitted kitchen complete with base and wall mounted units and complementary work surfaces and there is a three piece family bathroom with over bath shower.

There is good storage located throughout the property, which has been neutrally and tastefully decorated and benefits electric central heating, double glazing and secure door entry. 

http://www.propertylocker.co.uk/details/50/9MCF/

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