Are You a Budding Property Investor?

There is a certain image of the typical property investor we see portrayed on TV and in the movies from time to time. He (because it mostly often does appear to be a ‘he’), tends to swagger around a bit, suck on eye-wateringly expensive cigars and wear razor sharp suits which, unfortunately, tend to be too small for him.

Those of us in the property market know this fiction is just that – something very far from the truth. Granted the world of property investing can be extremely lucrative, but that doesn’t mean it is for everyone. We’re not all swanning off to the Bahamas for six months every year and for those who do make a mint, they don’t necessarily go around boasting about it, or showing off.

Property Investing in London

Property Investing in London

It takes all sorts to be a property investor

Many property investors are driven, to the extent they love what they do and hate taking any time off (these tend to be your small-profile buy to let landlords). Other investors are happy to dip their finger in now and then but leave most of the wheeling and dealing to others (our friends who invest in property shares).

What we’re trying to say in this article is that there’s not one type of personality who ventures into the property industry. It really does take all sorts. Where we can point out a distinction though, is in whether that individual is a high risk or a low risk investor. By ‘high risk’ we mean he or she having plenty of nerve to the extent they are prepared to go for deals others wouldn’t touch with a bargepole. Provided they have done their due diligence beforehand then this is the type of individual who will speed towards – and meet – their financial target in no time at all.

Property Investment Success

Property Investment Success

The low risk investor, on the other hand, is a cautious individual who tends to stick with a couple of buy to lets for years before investing in another property as much as a decade down the line. He or she obviously won’t make a mint overnight but they’ll be able to fall asleep when their head hits the pillow last thing at night.

Where do you reckon you fit in between the two categories outlined here?

Investing in the property market has consistently proven itself as one of the best ways in which an investor can generate wealth. The great thing about property is that it consistently increases in value over time and provides for an excellent retirement fund, as and when one looks to retire. You simply can not beat the property market as a method of growing your wealth.

High risk investor personality

  • Friends, family and colleagues love it when you turn up to a party because you’re always the ‘life and soul.’
  • You’re not a worrier. If you lost cash with a bad investment then so be it. As far as you’ve concerned our fortunes see-saw. You know your chance will come round again.
  • You’re spontaneous but also a little too impatient – much to the annoyance of friends and family.
  • You’re definitely a ‘go with your gut instinct’ type of person.
  • You’ll opt for hedge funds over emerging markets every time.

Low risk investor personality

  • You like to stand back at a party assessing everyone before you can even begin to relax. You don’t like letting folks down and can always be relied on to turn up to most events you get an invite for.
  • You’ll always opt for a diversification strategy rather than put all your money into one big investment.
  • Government bonds and deposit accounts is where your savings end up.
  • Your friends have mentioned you could do with ‘loosening up’ a bit more.
  • You may not be the quickest to make a decision over a property deal but when you do, you’ll never change your mind.

Most of us are probably somewhere in between both these two extremes and where we are on that continuum changes depending on how long we’ve been investing for and how successful our deals have been. Essentially though, confidence should come with every passing year.

Property Investor vs Businessman

Property Investor vs Businessman

The egalitarian nature of property investing

Perhaps the most impressive aspect of property investing – aside from the fortunes to be made – is the egalitarian nature of it. By that we mean you don’t actually need a lot of money to start out in the sector. Provided you have enough cash to put down a deposit for one buy to let you’re more or less off.

It’s how you act afterwards that dictates how the path before you will unfold. If you’re a high risk investor, for instance, and you manage to find a good mentor, you could be packing in your day job within a year or two. Now, truthfully, how does that sound?

FJP Investment have recently launched a hands-off property investment bond, managed by Empire Property Holdings.

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The Pros and Cons of Having a Property Mentor

If you’ve just entered the world of property investment you’ll be a bit short on contacts and no doubt still fumbling around for deals. So it makes sense then to consider hiring the services of a mentor. Or does it?

In this article we’ll look at the pros and cons of having a guide on your shoulder, so to speak.

Why hiring a property mentor makes sense

Property Investment Mentor

Property Investment Mentor

  • Being new at anything doesn’t lend itself to having bags of confidence, or motivation for that matter. Having an expert on your side does though. He or she will make sure you jump in and take that great deal rather than allowing you to stand on the sidelines and hesitate because you’re ‘just not sure.’ He or she won’t allow that little knockback you’ve just had get in the way of your building up a property empire.
  • Confidence boost. Mentors are great at sharing their own strategy with clients. Knowing it worked for them, and in similar market conditions, should give you the confidence to plunge right in with your own ambitions.
  • Save time. Instead of having to negotiate your way through the jungles of paperwork and online property news sites out there, your mentor will highlight all you need to know. He or she will have been in the industry long enough to know who you should be reading and why.
  • Listen to you. Let’s face it, not everyone you know is going to share your passion for property investment. In fact, very few of your friends and family will. And that’s where a property mentor comes in. You and he/she can spend ages dissecting every little potential deal and ‘the one that got away.’ 
  • Make things happen quicker. Hire a property mentor and you’ll be forewarned about all those little stumbling blocks – the ones that will make you fall down the rungs again just as you’re coming to the profitable last square in that metaphorical game of property snakes and ladders. With the result you’ve got more chance of reaching the end goal quicker than if you were on your own.
  • Inherit contacts. If they’re feeling generous, who knows your mentor may even help you out with personal contacts. Mentors are, in fact, invaluable when it comes to networking and getting to know who’s who in your new world.

Why there’s no point in hiring a property mentor

Property Mentor

Property Mentor

  • Instead of spending hundreds of pounds (not to mention hours of your time) on a mentoring course, you could be using the cash to add to your down payment on a new buy to let or renovating that refurbishment property you’ve just bought at auction
  • Undermining your own strategy. Even if you feel extremely comfortable with your ‘slow burn’ strategy, it can be tempting to abandon it and go with the ‘get rich quick’ one your property mentor is advocating even if, in your heart of hearts, you know it’s not the right one for you.
  • No negatives. It’s a property mentor’s role to get you enthusiastic and motivated about your new property investment sideline/career. They won’t do that by pointing out the negative side of the industry (the laboriousness of being a landlord at times etc) so it can all seem rather rose-tinted to begin with.
  • End up alone. If the mentor you go for is more of a book and course type, then they’re not always going to be around. Chances are you’ll have to keep referring to the literature they’ve given you – which isn’t particularly motivating.
  • No guarantees. A mentor can advise on what worked for them and how they think your strategy has the best chance of being successful, but they can’t promise that you’ll make a profit. The hard work is yours when it comes down to it.

As you can see from the above, there are negatives and positives to hiring a property investment mentor. Just because it worked for your neighbour doesn’t mean it will for you. On the whole though, it does make sense to tap into someone’s expert knowledge, especially if it’s a field you’re not too sure about yourself. It’s what you do with that information afterwards that’s the important part.

Latest Investment: Empire Property Holdings have recently launched the property investment bond.

Alternatively, you have the option of working with professional property sources such as FJP Investment. We have the ability and the track record in delivering highly profitable investment property deals to investors all over the world. Ultimately, what it comes down to, is that it is your capital and you have the final decision as to where you invest the funds.

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5 Best Cities to Invest in Property in UK

It shouldn’t come as a surprise to anyone in the least interested in the prospects of the UK property market to see that of the top five cities to invest in property outside London, Manchester sits snugly amongst the leaders.

The city which last year boasted the third highest number of foreign visitors in the UK does, after all, make a huge claim as the new home of the BBC as well as fostering a flourishing media community.

But more on that later. Also up there in the palm of prosperity sit Glasgow, Liverpool Birmingham and Bristol. The city claims are based on insurance company Hometrack’s latest house price survey published last month, which showed the increase in house prices today compared to 2007, just prior to the credit crunch. We’ve also done our own analysis by looking the likelihood of future house sales thanks to redevelopment and a move northwards by investors out of London. The latter is mainly a response to the three per cent tax on second homes and higher London house prices in general.

The UK is by far one of the most attractive investment destinations the world over. The UK offers strong security for investors in terms of the Robust principles in which the Rule of Law was built. Investors also benefit from owning a property within one of the leading economies of the world. Come and invest in the UK property market, you are sure for a very profitable ride so long as you pick the right asset.

Best Cities to Invest in Property

Five Best Cities To Invest In Property In The UK

Here we look at each of the five cities in turn and reveal why it’s not a bad idea to consider properties in any one of them as a boost to your investment portfolio:

Glasgow

Scotland’s second largest city after Edinburgh, this much more affordable neighbour is home to Scotland’s media industry, based in the Digital Media Quarter at Pacific Quay. Glasgow also boasts a number of huge blue chip companies such as Morgan Stanley, esure, JP Morgan, Aon and Paribas – to the extent one in 13 employees in the city work in financial services. The average house price here is £155,221, with a typical one bedroom flat in the city centre renting for £602.17 per month.

Glasgow Best Cities to Invest in Property

Glasgow Best Cities to Invest in Property

Liverpool

The former home of the Beatles has benefitted from £5 million in regeneration funding over the past few years with a further £7million of development planned for the next 10 years. Economists reckon 95,000 new jobs will be created in Liverpool over the next four years. The city is also home to more fast-growing firms than anywhere else in the UK, according to a survey published earlier this year by the Enterprise Research Centre. The average house here costs £103,598 while a one bedroom in the city centre rents for around £548.19 per month.

Liverpool Best Cities to Invest in Property

Liverpool Best Cities to Invest in Property

Birmingham

With the promise of journey times into London in under an hour on HR2, Birmingham is set to spend more than £1bn over the next three decades creating 36,000 jobs and 4,000 new homes. Biggest employers in the region include National Express, Sainsbury’s and Lloyds Banking Group while the Science Park at Aston is home to 86 technology companies. The city is by far one of the best cities to invest in property and even boasts also four Michelin-starred restaurants. The average house price here is £144,943 while one bedroom flats in the city centre let for around  £701.32.

Birmingham Bullring Best Cities to Invest in Property

Birmingham Bullring Best Cities to Invest in Property

Bristol

One of the major regeneration projects in the area was the Bristol Temple Quarter Enterprise Zone which has created more than 1000 jobs to date but aims for a further 16,000 over the next 25 years. Once HR2 arrives (planned for 2018) journey times into the capital will reduce to just 80 minutes. Bristol,  together with Bath, was named by a government-backed report as the UK’s most important centre for ‘the fast-growing digital industry’ outside of London. The average house price here is £263,294 with a typical one bedroom flat in the city centre renting for £825.50 per month.

Bristol Best Cities to Invest in Property

Bristol Best Cities to Invest in Property

Manchester

The city’s NOMA project aims to create a whole new neighbourhood at a cost of £800 million over the next couple of years. The main artery of the area, One Angel Square, is the HQ of the Co-op group and cost £105 million to create three years ago. Spinningfields Business Centre was a £1.5 billion which is almost complete. The huge park is home to major companies such as Regus, Barclays, Deloitte, HSBC Bank and the Royal Bank of Scotland. House prices in Manchester average £142,508 with a typical one bedroom city flat going for £693.65 per month.

Manchester Canal Street Best Cities to Invest in Property

Manchester Canal Street Best Cities to Invest in Property

It makes sense to look northwards now that property in London no longer creates the high yields many investors enjoyed up until a couple of years ago (in fact, house prices in Bristol have been rising higher than those in the capital over the last six months, according to Hometrack).

The above five cities all provide better value in that respect. And with more individuals and families moving out of London unable to afford such high rents, these five hot spots are looking increasingly attractive to investors and buy to let landlords as time goes on. Just don’t hang around too long…

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8 Ways to Get a Bigger Buy To Let Kitchen Without Renovating

On the surface it actually sounds too good to be true. How can it be that you can make that galley kitchen or small scullery of your brand new buy to let look bigger without having to knock down a non-load bearing wall and generally create an expensive upheaval?

Well, believe us when we say there is indeed a way. Because, simply by carefully considering the furniture you buy and by taking advantage of some clever interior design tips you can visually create a kitchen that feels roomier, physically easier to move around in and look nice enough to make prospective tenants or buyers want to snap up your property practically without a second thought. How so? Well read on…

Install floating furniture

By ‘floating’ we mean a countertop without legs and which is attached to the wall.  Backless stools and glass or perspex see-through light shades also make a room look larger. Why this works is because none of these items disrupt the line of sight, meaning that when walking in to the kitchen the eye can travel around freely taking in the whole room at once.

Stainless Steel Kitchen

Stainless Steel Kitchen

Keeping the colour consistent

Make sure the cupboards are a similar shade to the walls and the appliances – with just a touch of variation. It may look a bit dull but it actually gives the illusion of more space. And anyway, your tenants can add colour in the form of tea-towels, place mats etc. Meanwhile we’ve been brought up to believe that pale colours reflect light and make a room look bigger – which is true – but dark colours (chocolate and charcoal) can also help by making the cupboards recede so that the walls look further back than they in fact are.

Open things out

Open shelving in place of closed cupboard doors can make a room appear larger – provided that is, the shelves aren’t filled with clutter (a row of recipe books or the odd vase or two works well). When the tenants see the kitchen the shelves shouldn’t have anything on them anyway.

Buy To Let Kitchen

Buy To Let Kitchen

Lengthen with lines

If you prefer a bit of patterned contrast in the kitchen then striped or geometric patterned walls are excellent for drawing the eye either horizontally or vertically, making the room seem longer or taller respectively. It also works with flooring ie lay square tiles diagonally rather than in straight lines (incidentally bigger tiles tend to open a room out, making it seem larger and in which case, mosaic tiles are definitely out.

Getting a big of gloss

Stainless steel belongs in a kitchen – which is great for small ones since it happens to be reflective and helps make the kitchen appear larger (so great for sink units and appliances). Glass tiles and glossy countertops or cabinets play a similar visual trick. Coloured glass splash backs, for instance, will keep the eye from focusing on any dark and cramped corners.

Level with lights

If you don’t want to understandably fork out for a glass pendant light then how about having spotlights installed in the ceiling instead then popping along to a certain Swedish retailer or similar for some under-cabinet lighting? Subtle lighting always makes a kitchen look better than a stark overhead light.

Help with heating

Tall, slim panel radiators – rather than the old-fashioned chunky horizontal kind – will obviously take up less space from the centre of the room but, at the same time, they’ll also make the room appear much taller. Or, paint them the same colour as the wall so that they simply blend in and avoid any visual disruption.

Hang up a hood

A cooker hood – that is. Not only will a large vent hood take the eye upwards (so make the room appear taller), but it will also provide a nice contrast between cabinets. A stainless steel version will also prove reflective, adding to the feeling of space.

We hope the above has given you some food for thought for ‘expanding’ the kitchen in your new buy to let. None of the ideas above cost a fortune so they are well worth exploring and certainly, a kitchen that feels larger will always command a better yield than one which is cramped and uncomfortable. Now all you have to do is rethink the rest of the rooms…

Kitchen Cooker Hood

Kitchen Cooker Hood

Alternatively, you can avoid all of the hassles that come with developing a property and invest in our two year UK property investment bond that pays out every 6 months.

We have always found that with property renovations, it is not always about going out and buying a new kitchen, spending thousands of pounds in the process. Some simple changes can add value and remember, the person buying a property will often be making an emotional design based on aesthetics.

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Popularity of HMO’s Set to Rise thanks to Lending Regulations

If you’ve been toying with the idea of investing in a House of Multiple Occupation (HMO) for a while now then it’s time to get moving before the stampede begins. What stampede we hear you ask? Well, there may not be dust clouds gathering on the horizon quite yet but you can be sure they’ll start to appear within the coming months – if not by the end of the year. Why’s that?

Mortgage Property Investments

Mortgage Property Investments

The fact is HMO’s have always had the potential to bring in higher cash yields that their standard buy to let equivalents. At the same time many property investors have been put off by the extra work that’s involved in letting a property to five or more tenants. Then there are all those rather high hoops to jump through when it comes to local authority approval. However, thanks to the Prudential Regulation Authority (PRA) paper on underwriting standards for the buy to let market, the prospect of high HMO yields are about to become an awful lot more attractive to both landlords and lenders.

The reason for this is the fact that lenders will be looking for higher rental figures in order to improve the loan to value ratio in their eyes. Having said that, there will still be the five year plus fixed rate deals around as well as decent remortgaging options).

Still, if you’re a landlord and are considering a swap into the HMO market, what specific rules and regulations do you need to look out for? Well, here’s a quick run-down of the most important:

Limited HMO finance lenders 

Firstly, HMO finance is a bit of a specialised market. There are ten or less dedicated HMO mortgage providers currently in the market from Kent Reliance offering up to 85 per cent loan to value (LTV) to Shawbrook and BM Solutions at 75 per cent LTV There are also some high street lenders offering between 60 to 70 per cent LTV.

The reason finance companies have traditionally been reluctant to lend for a multi-roomed property is the prospective difficulty in selling the property if it ends up being repossessed and going to auction.

Another unique aspect to HMO lending is that companies rarely provide finance for this type of venture to a new landlord. They prefer to see that he or she has at least cut their teeth in the buy to let sector beforehand.

HMO health/safety guidelines

As a landlord of a typical buy to let you are required to ensure the property is fire safe and passes the requisite gas and electricity tests. Being an HMO landlord though is a whole other ball game. Not only do you have to obtain a special HMO licence from your local authority in order to take in tenants in the first place, but you are also expected to carry out regular fire checks (either by yourself or by appointing a tenant to supervise it). The fire checks must then be logged in a book and kept on the premises for inspection.

HMO Safety Guidelines - Property Investment

HMO Safety Guidelines – Property Investment

Other HMO safety stipulations

  • A fire extinguisher must be provided for every separate floor of the property and there must be a fire blanket in the kitchen.
  • Legally a gas inspection should be carried out annually via a CORGIE approved installer. The electricity must be checked every five years but law, but it’s a good idea to carry this test out annually too. The latter results in an Electrical Installation Condition Report which should also be available for inspection by tenants and the local authority.
  • PAT. A Portable Appliances Test (PAT) isn’t obligatory but it makes sense to carry one out every couple of years since it’s the landlord’s duty to ensure kettles, toasters, microwaves etc are all working and safe to use. You’ll know they’re safe to use if they have a CE mark (which is the Electrical Safety Council’s ‘checked’ logo). The Council recommends larger items such as washing machines and dishwashers are checked every four years.

Failure to carry out any of the above mentioned statutory tests could result in a maximum £5000 fine and have your HMO license being revoked. So, they’re all worth remembering about – even the obligatory ones.

Property stipulations

These vary depending on the local authority but basically there should be one bathroom/WC for every four tenants. These and other communal areas should always be kept clean and tidy (so you’re really looking at hiring a cleaner). The pipes should be lagged and the water running clear.

In terms of preventing rubbish build-up there should also be plenty of bins on the premises. Tenants should also be guaranteed privacy with a lock on their bedroom door as standard.

You can find more information on HMOs and what’s required specific to your area on the local authority website covering the property’s location. More general information on HMO Health and Safety rules can be found on the government website.

The repurpose of larger properties into one of multiple dwellings is an attractive proposition. At the higher end of the market, there is a good number of properties and not so much demand. HMO property investment are very popular at the moment and we see no reason not to go with this trend all the while there is a chronic shortage of affordable housing.

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