The Property Vault Medway is almost here, so make sure you have booked your ticket. It is on Tuesday 28th February at 6.30pm at my offices in the Innovation Centre Medway. This month we have Ross Mallalieu from the Intelligent Property Academy. He sources approximately 15-20 deals every single month and offers training to help others achieve their own investments. He will be talking about Rent to Rent and Deal Sourcing. Tickets are available from here
How to become a landlord
I often get asked by potential landlords for advice on how to start-up, as becoming a landlord for the first time can be an intimidating business. It is very different going from being a home owner to becoming a landlord, so before you do this, there are a variety of things that are important to consider to make this transition smoother.
First of all, it is quite common for people who buy a property for the first time to budget poorly and spend too much time and money on it. As a landlord, don’t get carried away with any unnecessary big designs or a luxurious interior unless you can be sure that the target market wants that. A buy-to-let property is an investment and this needs to be taken into account. The least you have to do is to provide a safe space that is suitable for your tenants. Remember, this property is a business investment and you have to treat it pragmatically.
I always advise my landlords when considering how much to spend on refurbishment, to first work out who your target tenant market is: e.g. students, white-collar works or blue-collar workers. Then you can reverse-engineer and work backwards to work out the level of refurbishment required to attract this tenant type. This is the best way to balance spending the right money against ensuring your properties are attractive to your demographic.
Second of all, as a new landlord you need to make sure you get the most suitable mortgage, as buy-to-let mortgages are different from personal home mortgages. Some banks will forbid landlords renting to multiple occupants and prefer new landlords to start with single lets. If you need an excellent mortgage broker contact me as I know some great ones. Also my blog on finding the right mortgage from last year. You also need to check what type of tenants your buy-to-let mortgage allows.
Thirdly, check what landlord insurances are available. Even if your tenants are reliable, sometimes accidents can happen and you can never be too careful. The insurance can cover the rebuilding costs, liability and emergency repairs. If you need a good insurance broker contact me, as I know some excellent ones.
After purchasing the right insurance, as a landlord you still have a legal obligation to ensure the safety of the gas or electric boiler and the electric sockets and lights will need testing too. This means getting a safety certificate from accredited gas safe engineers and electricians.
Furthermore, investing in the property market is a popular way to save for the future. Before purchasing a buy-to-let property, a lot of research needs to be done in order to make sure, as a landlord, you receive a profit at the end of the year.
Ensure you research the taxes imposed on landlords, focusing especially on the recent changes from the Autumn Statement. Know how much your mortgage repayments are costing and how much rent you are likely to receive. Work out how much money you will need to spend on upkeep and maintenance over the coming years. Workout whether your rental income may push you into another tax band.
You need to know that investing in your rental property in order to keep it in a good shape is not money wasted, but instead it is an essential expense for you to provide a quality home for your tenants and receive a good yield.
For further information I also suggest you look at my previous blog of Ltd vs sole trader, as investing in properties in companies can bring significant advantages. You can find all my blogs at www.medwaypropertynews.com. There are over 60 articles that I have written and it is a valuable resource on Medway property investment.
Medway regeneration continues
Further to my blog of 2nd February about the improvements taking place in Medway, the council have announced in a recent press release that they have successfully secured £7.2 million for key regeneration sites. This includes Rochester Airport Technology Park and flood defences at the former Civic Centre site in Strood and they will get a cash injection of more than £3.5million each from the Local Growth Fund (LGF). The council say the two Medway projects will create at least 2,000 jobs and around 325 quality homes. They are also hoping that this will attract inward investment, raise local aspirations and transform key sites in the area.
At Rochester Airport the funding will go towards the installation of vital infrastructure on the site for future business, such as access roads and a water and electricity supply. The council want this work to make the site more attractive to potential investors and help to unlock the land for commercial use. Business occupiers of the site will benefit from Enterprise Zone tax discounts for a five year period to a maximum value of £275,000.
With regards to the Improvements to flood defences at the Former Civic Centre site in Strood, they hope this will help accelerate a prime development site on the River Medway. The council have also identified the Civic Centre site as brownfield land and an ideal location for around 325 waterfront homes. However, at present the site is at considerable risk of flooding and requires protection works before it can be redeveloped. The council has won £3.5million to invest in flood defences and the bid was given a high priority by the SELEP. So a lot of new developments coming soon – exciting!
Once the work to protect the site has been completed, the council say it will be an area of prime, high quality residential land with potential for premium housing, offering fantastic un-interrupted views of Rochester Castle and cathedral. Development of the site will also create up to 500 new jobs and provide employment land targeted at small and medium businesses, encouraging local cafes and restaurants to open there.
So this is further encouraging news for the area. All these improvements create a great place to invest in property, and will bring more people from London to the area.
As always, if you wanted to chat about property investment in Medway or Gravesham I’m happy to hear from you. As I’m a lettings-only specialist, I will give you the advice you need to hear. Give me a call on 07944 726676 or email me at firstname.lastname@example.org.