7 Steps to Finding Great Investment Property: Step 7 Next steps

Introduction

This is the last in the series of 7 steps to finding great investment property. Up to now we have looked at all of the following:

  • Find town/city to buy property
  • Internet search property hotspots
  • City focus, identify property area
  • Potential yield
  • ROI
  • Postcode research
  • Risk assessment

Having decided on whether this is a good area to invest in we need to move the search on.

Next Steps

The first thing to do is to speak to estate agents in the area that we have narrowed down. This can be done over the telephone but it is often better to do it face to face so that you can get a better feel for the information you are being given. If you are intending to have an agent manage the property for you, it is a good time to work out potential deals.

Ideally you also need to speak to any landlords who let properties in the area – you can ask an agent to put you in touch by leaving your phone number with them but they may not pass the information on. Another way of meeting landlords is to attend a local auction if they are held in the city you have chosen. You will meet plenty of landlords who you can discuss the area with if you arrive early. Another way would be to respond to rental adverts but this may annoy people so would not be my preferred method.

You need to visit the area and check it out for yourself. If after all of this you are keen to invest you can start to arrange viewings.

Conclusion

This has been a series of 7 steps to investing in great rental properties. Although we have done this over 7 separate sessions, the reality is it should only take you about an hour to do the first 6 steps before you visit an area.

Keep an eye out for more useful posts on this blog.

For more useful information check out the following books.

    

7 Steps to finding Great Investment Property: Step 6 – Risks

7 steps to finding great investment property Step 6: Examining Risks

Introduction

In the last post we started to drill down a bit deeper and looked at a particular postcode where there was a property for sale. The idea was to look at the types of property in that postcode with the tenure and to see what type of potential tenants we might be able to find property for. The postcode was a good rental area with a number of privately rented properties. There were not many students renting so if that is the type of tenant we are looking for we would need to look elsewhere. There was generally a mix of working and non-working people living in that postcode.

For this step we will be looking at risks and for this we will look at crime rates and environmental factors.

Crime & Other Risks

It is useful to look at crime statistics so that you can decide whether the area you are looking to invest in has anti-social behaviour and other crime risks. For this part of the research we will use Streetcheck again to start with:

When looking at crime in the postcode from the last session you can see that for April 2017 there were 837 crimes committed. The breakdown is given in the Pie chart and much of it seems to be anti-social behaviour.

 

We will now take a look at the other risks before going any further and for this we will use a website called Homecheck.

To use this site you have to insert a house number but for the sake of privacy I have blocked out the house number I used.

There is only one risk highlighted here and it is to do with planning. That is not usually a problem unless there are plans to build lots of rental properties or knock the street down! You would need to go onto the council planning portal or contact them to ask what the plans are.

In view of the crime rate though, you may not be happy to invest in this area, particularly if you don’t want to put lots of effort into property management. Extra work would be required in terms of tenant vetting, property inspections etc and you may not be able to attract working professionals into the property if that is the type of tenant you are looking for. On the other hand, you may attract long term tenants on benefits or those who work in and are familiar with the area which could be a positive.

In case you are not happy though I have looked at another postcode which is a good rental area, has decent property prices but about £20,000 more than in LS9 that still offers a decent yield. I am going to use another website to compare the crime rates of these two postcodes. The website is www.crime-statistics.co.uk. The advantage over Streetcheck is that you can compare 2 postcodes.

In this example you can see that having compared the postcodes, the crime rate in the new one is much less than that of the first. Here we have 260 crimes as opposed to 839.

Using Homecheck again we will look at any other risks raised.

There is an additional risk for this property relating to energy and infrastructure. This can mean anything from a new rail link to wind farms so you would need to do some more research to see what is being proposed.

You can now make an educated and informed choice between the two postcodes and decide which, if any you would be happy to invest in.

Conclusion

The results of the postcode search are not surprising when considering the price of property in the area but it may not suit everyone. You may decide to pay a little extra for a slightly lower yield in order to invest in an area with a lower crime rate. You would also need to look into the environmental risks in more detail in LS10 to make sure that nothing is being proposed that will cause the property price to fall, such as fracking.

Next Post Step 7

In the final post we will look at the next steps in the process.

Disclaimer

These posts are meant to provide information relating to how to research an area in order to help investors who are searching for properties. Examples given are not recommendations to buy and investors need to do their own due diligence before purchasing investment property. Hopefully the information provided in this 7 step approach will make your search a little clearer.

Books By Author Dawn Brookes

For further information about property investment please take a look at the following books and if you do purchase any of them – please leave an honest review. Don’t by the tax booklet if you buy one of the main books as the information is included in these.

You can also buy any of these books at Dawn Brookes Publishing.

You can also check out this series on my Youtube Channel at buy to let info.

   

7 Steps to finding great investment property Step 5: ROI, Drill-down

7 steps to finding great investment property Step 5: ROI, Postcode Drilldown!

Introduction

In the last post we looked at potential yields of rental properties in an area that we narrowed down from previous research. In this post we will look at return on investment (ROI) and drill down even further into the area under consideration.

Return on Investment (ROI)

Return on investment is worked out by dividing the potential income by the amount invested in the first place and then multiplying by 100 to work out the percentage.

Here is an example of what I mean, taking a property valued at £75,000 and using the amount actually invested to work out ROI.

Annual rental income  x 100

Money Invested

5,100  x 100 = 27.2%

18,750

In the example above the ROI is a very respectable 27% and this is because a mortgage is a leveraged product offering greater returns on the money invested in the first place. Some investors will work out ROI based on all expenses so I have included an example of this below:

ROI Other

Annual rental income  x 100

All Investment expenses

18,750 Deposit

2,250  Stamp Duty      5,100        x 100 = 22.9%

1,000.  Solicitor’s Fees.    22,250

250  Survey

________________

£22,250

Even taking into account all expenses you are still left with a very decent 23% ROI. I don’t tend to use the additional expenses because they are capital expenditure which you get back when you sell the property but you can work out ROI using either of the calculations above. The difference between investing in property and investing in the stock market is the leverage. If you wanted a £75000 investment in the stock market, you would need to find £75000 to invest but for the same investment in property you only need to find 25% of the purchase price because you can borrow the rest!

Postcode Drill down

In this part of the research I am hoping to find that the area highlighted in the last post has properties that offer decent rental potential by delving a bit deeper. Just to point out here that although I am covering all of this over 7 steps taking several weeks, you can do this research in about an hour and this will give you a very good idea as to whether you want to go and look around a particular area to view potential rental properties.

I am going to use a website that gathers census data in order to look at a particular street where a property has been found.

For this example I have selected a specific street in which a potentially interesting property is situated. We will now look at some postcode statistics to see if this street and area continue to be of interest.

 

 

 

 

Using a website called Streetcheck you can research all sorts of information about a specific postcode to see if the housing is going to suit the tenancies that you have in mind. In this example the street consists of mainly terraced housing which is not surprising as this is how the street looked on the map. In addition to housing you can look at tenure – who owns the property in the area and who lives in it. Further research highlighted that the properties in this street are predominantly owned by private  landlords with a small number of council rented. It is important for you to know what type of tenant you are looking for so that in the next step you can see if this area/street fits the bill.

The census information results in a bit of a mix in terms of employment in this particular street but the majority are in either full or part-time work with some unemployed. If you would prefer an area where more people are in work or where there are more students or people on benefits then you would need to look at other streets or postcodes to continue your search for properties.

In the previous search which was undertaken a few weeks ago now, the properties in this area would provide healthy yields and today’s research shows a good return on investment.

 

 

 

Conclusion

The results of the postcode search are not surprising when considering the price of property in the area but it may not suit everyone. It is not a thriving student rental area so if students are what you are looking for you would need to look elsewhere. There less than 50% of people in the street working, so if you are looking for a thriving area for working people this may not be for you either. When looking at an area it is important to see whether it matches your expectations in terms of the tenants you have in mind. You may not exclude this area based on the postcode research so far but you could and if this was the case you would need to research the next postcode on your list. research reiterates that so far, this is a good area for investment but it is not quite enough information yet. There are still some other things to consider. In the next post we will look at these.

Next Post Step 6

In the next post we will continue with postcode research and look at risk factors such as crime and other risks like subsidence.

Disclaimer

These posts are meant to provide information relating to how to research an area in order to help investors who are searching for properties. Examples given are not recommendations to buy and investors need to do their own due diligence before purchasing investment property. Hopefully the information provided in this 7 step approach will make your search a little clearer.

Books By Author Dawn Brookes

For further information about property investment please take a look at the following books and if you do purchase any of them – please leave an honest review. Don’t by the tax booklet if you buy one of the main books as the information is included in these.

    

You can also buy any of these books at Dawn Brookes Publishing.

You can also check out this series on my Youtube Channel at buy to let info.

7 Steps to Finding Investment Property 4: Potential Yield

7 steps to finding great investment property Step 4: Potential Yield

In the last post we used Rightmove and Google maps to identify potential areas with available rental properties in an area that we narrowed down from previous research. The research highlighted potential problems of over supply in our initial area so we moved on to a second postcode area that we had identified previously. In this post we will continue to look at the second area which appeared to be a suitable rental area.  This time we will look at potential yield. Yield percentage is what provides an investor with a suitable profit each month. The yield comes from rental income, not from capital growth. Capital growth is a separate indicator.

As before, I will continue to use the Rightmove property portal and Zoopla. In this part of the research I am hoping to find that the area highlighted in the last post has properties that provide a decent rental yield.

Average Rent

The first thing to consider is the number of properties for rent and the average rent price being asked. Like before, you will need to put in the postcode of the area that you have decided. You also need to use the filters that you have determined from previous research. In this case it was 2 bedroom houses that seemed to be the most affordable to buy. In other areas it might be flats or properties with fewer or more bedrooms. This will be down to you and your budget.

In the previous search which was undertaken a few weeks ago now, there were around 17 properties fitting the above criteria that were available for rent and the rental market appeared to be active enough to invest. When looking at an area it is important to see whether properties are moving and being let. The properties found in the last search were recently added to the property portals which was a good sign. I then moved on to another postcode that we had searched last week with regards to property prices. This area had far fewer properties to rent. I filtered it down to 2 bedroom houses in Zoopla and looked in map view.

Rental Prices

The next thing was to look at rental prices and these averaged out at around £500-550 per calendar month.

The search results for the postcode and property type this week show 9 properties for rent on Rightmove and 20 on Zoopla. The prices start at £450 and go up to £850.

The top and bottom prices appear to be outliers and as there were 11 properties with a rental asking price of £525 per month and around 5 at £500 I will use £510 as the average. If you were calculating this yourself you could use a real average or make a decision on the rent you would ask yourself – based on the results.

 

 

 

Property Prices

In order to calculate yield you need to look at the property price in the area and decide on the price you can afford or are willing to pay. We had already seen that properties were affordable in the chosen area but now need an average so that potential yield can be calculated.

In this area the prices ranged from £50,000 to £100,000 and I will use an average of £75,000 to calculate potential yield.

These are estimates but it does give you enough information to enable you to decide whether the area is going to provide a profit.

 

 

Potential Yield

Gross Yield

To work out gross yield you divide the annual rent by the property price and multiply it by 100.

Annual rental income  x 100

Purchase price

£6,120.      x 100 = 8.16%

£75,000

Gross yield is what you hear about when watching Homes under the Hammer – they do add renovation costs to the property price before calculating and you would need to do the same if you buy a property that needs renovating prior to rent. In the case above the gross yield is just over 8% which is good.

Net Yield

This calculates the profit in real terms before tax and takes into account all costs.

Annual rental income  x 100

All Expenses

£75,000 Purchase price

£1,680   Mortgage interest costs                        £5,100                x 100 = 6.41%

£1,000.  Running expenses.                            £79,581.28

£1,020   Void periods

£881.28 Management Fees

£79,581.28 Total costs

Even taking into account all of the annual costs of a property and including 2 months void period, the net yield is almost 6.5% which is very respectable.

Conclusion

This research reiterates that so far, this is a good area for investment but it is not quite enough information yet. There are still some other things to consider. In the next post we will look at these.

Next Post Step 5

Return on Investment, more analysis

Disclaimer

These posts are meant to provide information relating to how to research an area in order to help investors who are searching for properties. Examples given are not recommendations to buy and investors need to do their own due diligence before purchasing investment property. Hopefully the information provided in this 7 step approach will make your search a little clearer.

Books By Author Dawn Brookes

For further information about property investment please take a look at the following books and if you do purchase any of them – please leave an honest review. Don’t by the tax booklet if you buy one of the main books as the information is included in these.

               Buy Now                                            Buy Now                                          Buy Now

  

7 Steps to finding investment property Step 3: Delving Deeper

7 Steps to finding great investment property Step 3: Delving deeper

Last week we used Rightmove and Google maps to identify potential areas with affordable properties in an area that we narrowed down from previous research. In this post we will delve a little bit deeper to see if the area is suitable to invest in as a buy-to-let property investor.

We will continue to use the Rightmove property portal and we will also look at Zoopla. We are hoping to find that the area we have highlighted has properties that are rentable and viable.

Sold House Prices

The first thing to study is that of sold house prices. For this you will need to put in the postcode of the area that you have decided on and use the sold price or house price filters in the property portals. Once you have done this you may want to filter down to the type of property you are interested in e.g. 2 bedroom terraced houses. This will help you to keep the results into a manageable number. I would suggest filtering down to sales over the last 12 months as house prices have been moving upwards in the current market. If a market is static you can look further back. At the moment you are considering whether the area is affordable and whether properties are selling for at or near asking price.

Tip when buying investment property

When you are buying a property it is well worth doing this search to see what the current owner bought the property for as this will help you to determine how much profit the owner is sitting on or not. Someone sitting on a huge profit may be more likely to negotiate than someone who is either losing money or has hardly any profit.

Properties for Rent

In the last post we looked at how many properties were up for sale and for how much. This time we want to do the same thing but for rental properties.

The results of this search show that in the chosen area from last week that there are 162 two bedroom properties up for rent at present. Even when drilling down to houses only there were still 42 properties for rent. The worrying thing was that these properties had been listed up to six months ago. This sets off warning bells in my head that the market in this area has become saturated with properties for rent.

Personally, I would not invest in this area because there are potentially too many void periods. If I did already own a property here I would make sure that it would stand out from the crowd, reduce the rent and try to attract a different type of renter. These are all things you have to consider if an area has too many properties for rent.

Although the rent and property prices in this particular postcode were right from and investment point of view, the market was not.

Plan B

Always have a Plan B. I then moved on to another postcode that we had searched last week with regards to property prices.  This area had far fewer properties to rent. I filtered it down to 2 bedroom houses in Zoopla and looked in map view.

There were 17, 2 bedroom terraced properties on the rental market.

Once I had done this I wanted to see if properties were being rented out in the current market and so I included ‘Let Agreed’ in my search in Rightmove. In Rightmove there were only 12 properties listed for rent so it is important to cross-check property portals so as not to miss out on the bigger picture.

Having done this there were eighteen properties, meaning that lets’ had been agreed on a third of all the properties on the market. This is a good sign because it means that property is moving. The other good sign was that when looking at date listed they were mostly listed over the past month or two.

Rental Prices

The next thing was to look at rental prices and these averaged out at around £500-550 per calendar month.

Potential Yield

Next week in Step 4 of this 7 step series we will consider potential yield before drilling down even further into the best ways to find great investment properties.

Disclaimer

These posts are meant to provide information to help investors who are searching for properties. Example given are not recommendations to buy and investors need to do their own due diligence before purchasing investment property. Hopefully the information provided in this 7 step approach will make your search a little clearer.

Investment Books & Reviews Please!

For further information about investing in property I have a few books on the market. I would value reviews should you decide to purchase any of them. Please note that the tax booklet is just that – it is a short guide on how the new tax rules affect landlords not a comprehensive tax guide. The first book is for anyone who wants to invest in property and the second for those who wish to invest for a pension.

BUY NOW                                             BUY NOW.                                        BUY NOW

   

See you next week for the next post. Please feel free to comment on these posts. If you would like a *FREE* Guide entitled ’12 things you should know about buy-to-let mortgages’ hop over to the buy to let website. You can also buy any of these books on my publishing website.

 

7 Steps to finding investment property Step 2: City Focus

Property investment is exciting but finding the right property to buy is vital for your success as a property investor. In the last post we looked at how to find property hotspots through a little bit of local and internet research. Having carried out this research you will now have a town or city in mind. The next step is to focus in on that town/city using Rightmove. You need to do this in detail if you do not know the area you have identified. My research found that Leeds is a popular, high yielding area but we now need to see if that is indeed the case.

Finding investment property: Start Wide

Even if your research has given you a specific postcode it is still a good idea to take a general look before getting into specifics as this will improve your knowledge of the area and it might throw up some helpful surprises. Initially you will start wide by going onto Rightmove and looking at house prices in the city. You can also take a look at Google maps to see if any areas stand out as looking like they would be good rental areas e.g. close to universities, hospitals or town centre.

The image on the left shows a snapshot of my search results. All I did here was choose Leeds centre within a 3 mile radius and filtered the search to include 2 bedroom properties only, then chose map view. The search yielded 273 properties for sale which is obviously too many but, by hovering over the pins I was able to gauge rough prices. The properties in the north-east of the city were the most expensive from my rough search but those to the south and the north-west looked to be affordable investment properties at between £90,000 and £125,000. The reason I did it this way was to validate whether the postcode that came up in my hotspot research was identifiable.

Finding investment property: Narrow the Focus

Having established that the properties to the west of the city and the south are affordable you could either type in the name of these areas into Rightmove or take a look on Google maps to find specific postcodes. I have a postcode in mind from my research so will use this.

You can see from Google maps (image to left) that the area is called Headingley and the postcode is LS6. My search on Rightmove (image right) now focuses in on that postcode and on hovering over the pins I find the properties close to the university to be affordable. The prices range from £80,000 to £200,000 telling us that there are areas within the area that are more expensive. It is not surprising that there is a university close to this area and this is probably why it would be a good investment area. So far the search has been quite crude but even if I hadn’t already had a postcode in mind I could have found this area from the wider overview. I could also have found it from google maps by looking for the university.

A word of Caution

Please don’t go out and invest based on this example search. There are many areas in the country that you can invest in and you will need to do your own research. This series is setting out some steps you could follow they are not intended as recommendations for you to purchase. Things will change over time so you need to make sure that your research is current and that the potential yields suit your financial situation.

Finding investment property: Next Step

We still don’t know for certain that this is the right area to take seriously for our investment yet as there are other factors to be taken into account. Next week in Step 3 we will explore this postcode in more detail. Check out my YouTube channel at buytoletinfo.com to follow this series by video.

Come back next week to read the next article.

Want to know more about property investment? I have two books available, the first for anyone and the second for people who would like to invest in property for a pension. Click on Image to buy.

                        

 

7 Steps to Finding Investment Property Hotspots – Step 1

Step 1 Narrow the Field to a Town or City

This is the first in a series of articles that I will be distributing across various platforms each week. I am excited to share this information with you, although some of the details may be familiar, I hope that some will be new as we are all learning all of the time.

Investing in property is one of the best business decisions one can make. When you are well informed about the property you intend to purchase, then you are bound to make a profit in the foreseeable future. However, if you get into it blindly, chances are you can come to regret it. That is why you need to learn how to research a specific area of UK when looking to purchase a buy to let property. This series of articles will explain how to do it.

Where to Start

Initially, you want to be able to narrow the field down to one town or city before drilling down. There are various ways to do this and some of these are obvious.

  • Your home town/city
  • A town/city known to you
  • A recommended town/city you can easily access
  • An unknown town/city

Your Home Town

It makes sense to buy close to where you live if at all possible because the area will be familiar to you and you will be aware of property prices and the local market. You will also have an idea of the areas that would rent easily, those with problems and those to avoid. In addition you will know if the market is robust and whether there is good capital growth. It’s not always possible to buy close to home though as prices may be too high and if you live in a lovely village in the country it is not going to be a popular rental area. In such cases you will need to look elsewhere.

A Town or City Known to You

This might be somewhere that you have lived before or that your partner has lived. It may be somewhere not too far away such as a city within an hour’s drive from you. Again, it makes sense to look for properties in an area that you are familiar with because it will save you time. If it is not possible to buy in such an area because of price then you will have to look further afield.

A Recommended Town/City

We all have friends and relatives all around the country so it is always a good idea to utilise these when looking for investment property. There is a ‘win win’ to buying close to friends and family. Firstly they will know the area and may even be willing to do some of the leg work for you and secondly you get to visit and combine business with pleasure. You can ask them for information about the property market, prices, good and bad places and areas that are popular rentals.

An Unknown Town/City

Last but not least is the unknown town or city. When I say unknown, I don’t mean that you have never heard of it but just that you have never visited it or don’t know much about it. There are some real hotspots for property investment in cities with good rental yields particularly in the north of England, and others in Wales & Scotland if you live in these countries.

It will take more work to find one of these but actually a lot less than you think. Thankfully we live in the days of the internet and although there is a lot of false information and you will still have to pay due diligence to the information provided, there is a wealth of useful information.

In this article we are just trying to narrow our field down to one town or city so all I would do here is a Google search with simple search terms. One simple search of ‘investment property hotspots’ yields the following results.

I have not included the top four which consisted of ads as these would be trying to sell you something. Now you have the information, you can read the relevant articles and see which place jumps out at you.

Got the Town/City, Now What?

When buying property you may not be fortunate enough to get an estate agent who will volunteer all the information about the area. People don’t generally volunteer the unpleasant information which is vital. So, do it yourself. Undertake some property investment research on your own. Walking around all day may not be the answer though. There are powerful tools you can use at your fingertips. In Step Two we will further our search with the use of Rightmove to narrow our town/city down even further.

Come back next week to read that article.

Want to know more about property investment? I have two books available on Amazon, the first for anyone and the second for people who would like to invest in property for a pension. Click on Image to buy.

 

Do you need a license? Tips on renting out property

Some Councils in England have introduced landlord licensing. In this article I provide some renting tips to  help you with information you need to rent out property. Whether you are renting out a single property or a house of multiple occupation (HMO) property, you will need to follow the tips that come with the territory. Some HMOs attract compulsory licensing already so you need to look up the legislation with regards to HMOs. Wales has introduced compulsory licensing for all landlords and Scotland requires all landlords to be registered but not all need licenses. It is a bit of a minefield. Here are a few tips to help you rent out your property and sleep at night. The list is not exhaustive though but it looks at some of the key points that need to be considered in the current renting climate.

  • Find out if you need a license for renting out property

There are some councils in England that have introduced compulsory licensing. This is called Selective Licensing. You will need to get in touch with your local council to see if you need a license. If so you will need to apply for a license. There will be a cost involved but there is no way around it. You will be able to let your property once your license goes through. If the licensing is introduced after you have let a property you just need to comply with the rules that the council has introduced and apply for the license within the timescale they have set. Nottingham council are currently in consultation about introducing licensing and are planning to charge hefty fees of £600 per property which landlords are understandably concerned about.

Rather than repeat the work that someone else has done, you can find an article here which has a relatively up-to-date list of councils in England with licensing schemes but you should definitely check with your own council before renting out a property

  • Always stay on top of your repairs

By doing your best to maintain the property, it will allow you the opportunity to keep everything up to par and to serve your tenants well. Legislation requires landlords to respond appropriately to tenants who request repairs and if the response is not satisfactory the tenant can complain to the council who can issue the landlord with a repair order. If you are in breach of an adequate response you will not be able to serve a tenant with notice. The legislation was introduced in response to some landlords evicting tenants who requested repairs. Build a team of professionals who can deal with any sort of ongoing or large scale repairs. By having maintenance contractors on your list, you will be in good hands and able to keep your properties at their best, while satisfying current legislation.

  • Focus on taxes and insurance

It is critically important that you always remain aware of your tax and insurance obligations. I have produced quite a few videos relating to the current changes to tax on finance interest and these can be viewed via my YouTube Channel.

You also need to insure your property, usually with buildings insurance but you will need contents insurance if you let a furnished property. Mortgage companies insist on buildings insurance so make sure that you have the appropriate cover. If you keep on top of these logistical issues, you’ll be covered every step of the way.

These tips form a part of the letting process and they will assist you with some of the things you need to know about renting out property in England. No matter where in England you live, there will be some important steps to bear in mind which will be incredibly useful to you. These strategies are an excellent way for you to go about renting out property, while also making sure that you are operating within the relevant law. If you factor in these points, you will be able to tackle rentals in your and ensure a smooth running of your buy to let portfolio. Feel free to download my ‘Legal Landlord Checklist’.

Phillip Hammond Targeting Corporations?

The recent budget brought no good news for landlords but I guess we weren’t really expecting any were we? What it did do though, is set out the Chancellor’s stall with regards to corporations. This is important because many landlords have started moving their portfolios into corporations to reduce their overall tax burden. There is no major change yet other than reducing the tax free dividend allowance from £5,000 to £2,000 from April next year. Dividend tax was increased last year by George Osbourne which is why he added the tax free softener!

The Chancellor warned that he was aiming to prevent people finding tax havens and for landlords who don’t need to take a regular income, corporations fit this bill. Now he has had to back down over his increased National Insurance proposal for self-employed, he has to find a tonne of money to fill the gap in his spending plans. It may be that corporation benefits are likely to come under fire in the not too distant future, possibly in the Autumn.

Corporations may still be a good idea for some landlords as borrowing restrictions are lower and income tax is lower on dividends, although not as beneficial as they were so if you need a regular income from property, they may not be the best for you. Speak to a tax advisor.

I have released a small (41 page) booklet discussing tax, accounting and corporations which you can purchase in Kindle form for just £1.99. If you want to buy it take a look here. I would welcome honest reviews on Amazon.

Feel free to comment on this blog.

House Price Rises Slowing Down Slightly

There has been much discussion about whether property prices will be slowing down anytime soon. George Osbourne predicted that house prices would be falling by 10% (and up to 18%) by the middle of 2018. This was when he was trying to convince the general public to vote against Brexit and predicting doom and gloom consequences of leaving the EU. Are house prices lower? Some say yes, some say no. The latest report from the Halifax this month reported a slowing down of house price rises (although still rising) compared to this time last year. Of course there is this thing called the Property Cycle which means that prices will slow down eventually and at some point may even fall but there is no real sign that we are there yet. Property prices are sill higher than they were a year ago nationwide.

The Government Spending Watchdog has revised down its forecast for house-price growth in the coming years but not by much. We have to remember that there is still a nationwide housing shortage and while demand continues to outstrip supply the housing market is likely to continue to rise as will rents. Inflation is rising though and this will affect the amount of money in peoples’ pockets and is likely to result in an interest rate rise at some point in the not so distant future. The Bank of England will be reluctant to do this while the pound is weak and the effects of Brexit are unknown. When interest rates do rise, many people may be surprised by the effect as there is a whole new generation who have only known low interest rates.

When interest rates rise, probably in 2018 if the pundits are to be believed, buy-to-let landlords will need to pull down the hatches, examine their portfolios and ensure they are not over-borrowing – but surely you are doing that now aren’t you? If so, you should be fine and can ride any down-turn in the housing market.

We also wait with baited breath for the budget today – I wonder if there will be any nice surprises for landlords for a change!!