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Welcome to Andrews buy-to-let
Property Session
By Debbie Franklin, Bristol, Bath & Stroud Area Manager
About Andrews
• Established in 1946 • 85 estate agency and lettings branches throughout
the South of England
Not just sales and lettings: • Mortgage Services• Landmark Surveyors • Homemover Conveyancing • Andrews Property Services • Leasehold Management• Land and New Homes
Andrews Letting & Management
• Last year, we helped more than 7,000 landlords let their properties
• 1,000 tenants on average register with us each week
• 30% shorter void period than the UK average
• Multi-award winning
• Members of ARLA and TPO
Why invest in property?
• Rents in UK forecast to rise by 2% in 2015
• The av. UK rent for tenancies starting in Dec 2014 was £867pcm, 6.6% higher than Dec 2013
• The av. void period fell in 2014 to 2.6 weeks
Source: RIC, netrent.co.uk, homelet.co.uk
Buy-to-let
10 steps to become a successful property investor
1. Define your objectives
How much do you expect to earn from rental income and/or capital
growth?
2. Consider the risks
• Costs exceeding income, through void periods, or maintenance issues
• Mortgage increase
• Tenants not paying rent
• Property prices go down
• BTL new government regulations
• New European Mortgage Credit Directive
• Legal responsibilities
3. Plan your finances
• Cash investments
• Buy-to-let mortgages
• Gearing
• Mortgage fees • Survey fees • Solicitor fees • Stamp Duty • Buildings insurance• Repairs and running costs• Empty property • Mortgage payments • Letting agent’s fees
Calculate your target requirements
Budget for every cost
4. Do your research
Where are the best:
• Rental yields
• Tenancy demands
• Buy-to-let mortgage deals
• Capital growth areas
5. Find the right property
• New build or second hand properties
• Flat or house
• What type of tenant you’d like to attract
• The sort of property most in demand
• House in Multiple Occupation (HMO)
6. Calculate the yield
Investor purchases a property for : £200,000
Rental income: £950 Per Calendar Month
Using the following formula, you can calculate the gross rental yield:
Monthly rent @ £950 pcm x 12 Months = £11,400 per annum rental income.
£11,400 annual rental income divided the purchase price of £200,000 x 100 = 5.7 % Gross Rental Yield
Now you need to factor in property maintenance costs, insurance and mortgage payments
7. Find the right mortgage
• Repayment mortgage or interest-only
• Fixed or variable rate mortgage
• Best rate and fees
• Get the best buy-to-let mortgage deal
Speak to an independent mortgage advisor for more information
8. Manage your property
Benefits of using an agent
• Knows and understand the legislation
• Can source tenants and collect rents
• Organise viewings, advertise your property and deal with repairs
• Set up the tenancy agreement
• Letting and management fee can be tax deductible
9. Tax on buy-to-let properties
• Stamp Duty
• Income Tax
• Capital Gains Tax
• Inheritance Tax
Seek advice from an Independent Tax Advisor
10. Landlords’ obligations
• Mortgage consent to let
• Hold a Gas Safety Certificate
• Electrical Safety Check
• Meet the safety requirements for furniture and furnishings
• Fire Safety Precautions
• Energy Performance Certificate (EPC)
• House in Multiple Occupation licence requirement (HMO)
• The Tenancy Deposit Scheme (TDS)
• Immigration checks
What next?
• Register with Andrews Investor Club
• Speak to an independent mortgage advisor about gearing
• Purchase more properties
Andrews Investors Club
• Portfolio assessment
• Advice on how to maximise and expand it
• Facilitate the purchase of future investment
• Market for sale property in your portfolio
• Designated independent Mortgage Advisor
• Monthly market update with top properties to invest in and list of mortgage best buys
Any questions?
To sign up to Andrews Investor Club
visit andrewsonline.co.uk/aicor
call your local branch