I focused on re-building my property portfolio having just got divorced. It’s gone really well; I’ve been buying at auction, refurbishing, selling a few to first-time buyers and keeping a few as investment.
My bank balance, as well as my portfolio, have both increased. What I hadn’t banked on was a 95% reduction in bank base rates. That’s certainly helped.
What’s also helped is social networking.
The days of ‘no money down’ financing and the gurus teaching it are fast becoming extinct. However, with the popularity of social media, it’s now far easier for property investors to pick up on information and ideas to minimise their risks and maximise their returns for free.
With this in mind I created a social media web-site for property investors called Property118.com.
It shares information, news, number crunching tools and integrates with other popular social media such as LinkedIn, Facebook and Twitter. I certainly learn something new every day from it.
By way of example, below is a selection of tips I’ve picked up to minimise void periods:
When a tenant serves notice, especially if they’ve been good tenants, incentivise them to advertise the property to let on Facebook.
If it is let within a week of them moving out give them £50 or vouchers – that’s much cheaper than letting agents fees and/or void periods. The tenants are also much more accommodating with viewings before they move out and make a real effort to help re-let the property.
Texts, emails, Tweets, instant messages etc, basically anything they can do to get £50 that doesn’t cost them anything.
May and June
Always offer eight or nine month tenancies during these months, otherwise you could find your tenants move out just before Christmas, which is the worst possible time to re-let a property.
There are lots of things that landlords think about on a daily basis. Sometimes they just enjoy moaning about LTVs, lenders margins, lenders fees and how they struggle to make sense of refinancing as a result.
However, one thing all buy-to-let landlords worry about is interest rates.
If you can show them at what point their cashflow will only just break-even and how they can take action they will respect you.
As you will know, as a broker it’s very difficult to sell life insurance and other products to people who are worrying about money, regardless of the fact they need insurance now more than ever.
If hubby or wife were to die a few years ago, the mortgage lender would probably have taken the deceased partners name off the mortgage deed and carried on as normal.
Nowadays, the lenders can re-lend the money at lower risk and greater profitability so I suspect they are far more likely to call in the loans if it doesn’t incur losses for them.
What position does that leave the grieving spouse in though?
With all of the above factors in mind we’ve created a suite of number crunchers within Property118.com. They clearly demonstrate the break even points and offer suggestions to improve the position.
If you can improve your clients’ fortunes, they are far more likely to buy from you. Our daily news is focused on helping landlords to remain within the law and to improve their viability. It’s a must for all landlords and especially the advisers who work with them.
Mark Alexander is from Property118.com
