Landlord Investor APRIL 2015

BY

INDUSTRY

EXPERTS

COVERING

ALL

ASPECTS

OF

BUY-TO-LET

APRIL 2015

WRITTEN

LANDLORD | PROPERTY | INVESTMENT

GOVERNMENT GOES INTO OVERDRIVE: THERE MUST BE AN ELECTION COMING

- Peter Littlewood

HOW WILL BUY TO LET INVESTORS COPE WITH THE COMING CHANGES?

- Tom Entwistle

POPULATION SET TO EXPLODE: BERKSHIRE BUY TO LET ANALYSIS

- Kate Faulkner

STAY AHEAD OF THE

CHANGING TIMES

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2015 LOCATIONS 22nd APRIL READING BERKSHIRE 14th MAY CROYDON SURREY 4th JUNE LONDON OLYMPIA 24th SEPTEMBER NORTH LONDON / HERTS 1st OCTOBER MANCHESTER LANCASHIRE 22nd OCTOBER MAIDSTONE KENT 19th NOVEMBER LONDON OLYMPIA BOOK YOUR FREE SHOW TICKETS TO FAST-TRACK YOUR ENTRY BY VISITING:

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WELCOME TO THE APRIL ISSUE OF LANDLORD INVESTOR! Editorial

We hope you all had a lovely Easter!

Editor

I am delighted to announce our next Landlord Investment Show is heading to Reading on April 22nd at the Crown Plaza, this will be our 21st show since we launched the events in May 2013. We would like to thank all of our team for the dedication and hard work to date, it has been a great journey and we are looking forward to expanding our team in the very near future. In addition we would like to thank all of our Sponsors and exhibitors and key speakers who have supported us and have been involved with the shows since the launch, without you it would not be possible!

Tracey Hanbury editor@landlordinvestmentshow.co.uk Editorial Contributors

Adam Saint David Humphreys EasyProperty Kate Faulkner Mel Dellow Owen Woods Peter Licourinos Peter Littlewood Robin Pilley Steve Cox Susannah Cole Tom Entwistle

Art Dept.

Design Craig Edmonds

Contact 0208 656 5075 landlordinvestmentshow.co.uk /LandlordInvestmentShow @LandlordInShow

CONTENTS Buy-to-Let Analysis Industry Update Property Maintenance Industry Spotlight Lettings & Management Great Property Tips Landlord Insurance Expert Advice Investment

06 10 18 20 22 26 30 32 40

This month’s issue is jam packed with issues of the current election which is fast approaching, our May issue will focus on changes to the Private Rented Sector after the election results so please look out for that.

Also in this issue, Kate Faulkner analyses Reading as a buy-to- let hot spot area and investigates whether Reading is ripe for Investment, Tom Entwistle Founder of LandlordZONE talks about changes in the PRS from past to present, we also have an interview with Easy Property as well as much more!

Tracey Hanbury | Editor Landlord Investor

Tracey Hanbury Tenants History Southbridge House Southbridge Place Croydon CR0 4HA

Statements and opinions expressed in articles, reviews and other materials herein are those of the authors; the editors and publishers. While every care has been taken in the compilation of this information and every attempt made to present up-to-date and accurate information, we cannot guarantee that inaccuracies will not occur. Tenants History Limited and our contributors will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through the promoted links.

LANDLORD INVESTOR April 2015

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MEET THE TEAM TRACEY HANBURY EDITOR & SALES DIRECTOR T: 0208 656 5075 M: 07931 308 875 tracey@landlordinvestmentshow.co.uk

STEVE HANBURY DIRECTOR T: 0208 656 5075 M: 07429 683 046 steve@landlordinvestmentshow.co.uk

LES HANBURY DIRECTOR

FRAN ROBINS SALES & EVENTS MANAGER T: 0208 656 5075 M: 07950 284 615 fran@landlordinvestmentshow.co.uk

RYAN DENNINGTON SALES & EVENTS MANAGER T: 0208 656 5075 ryan@landlordinvestmentshow.co.uk

CRAIG EDMONDS CREATIVE DESIGNER T: 0208 656 5075 craig@landlordinvestmentshow.co.uk

SARAH-JANE CORDINGLEY SALES EXECUTIVE

T: 0208 656 5075 sj@landlordinvestmentshow.co.uk

April 2015

LANDLORD INVESTOR

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OUR 2015 ROADSHOW

APRIL 22ND - READING - BERKSHIRE - CROWNE PLAZA HOTEL

MAY 14TH - CROYDON - SURREY FAIRFIELD HALLS

JUNE 4TH - LONDON - OLYMPIA

SEPTEMBER 24TH - NORTH LONDON / HERTS

OCTOBER 1ST - MANCHESTER MANCHESTER UNITED FOOTBALL CLUB

ELSTREE HOLIDAY INN

OCTOBER 22ND - MAIDSTONE - KENT MERCURE GREAT DANES HOTEL

NOVEMBER 19TH - LONDON - OLYMPIA

IF YOU WOULD LIKE ANY INFORMATION ABOUT OUR 2015 SHOWS, PLEASE GET IN CONTACT WITH A MEMBER OF THE TEAM ON THE OPPOSITE PAGE OR ALTERNATIVELY, VISIT OUR WEBSITE AT: WWW.LANDLORDINVESTMENTSHOW.CO.UK

LANDLORD INVESTOR April 2015

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BUY TO LET ANALYSIS

IS READING RIPE FOR PROPERTY INVESTMENT? Kate Faulkner - Propertychecklists.co.uk

WELL, AS SOMEONE WHO HAS INVESTED IN READING, I SHOULD KNOW THE ANSWER TO THIS! Interestingly, the reason I invested in Reading was because my husband took a job down there and needed somewhere to stay. So we bought a two bed flat near Shinfield Road and rented out a room up until a few years ago.

When my husband’s job changed, we rented the whole property out via a great scheme run by Wokingham Borough Council. We sent them some pictures of the flat, they passed them on to potential tenants on their waiting list and then we met them and chose the tenant ourselves. They were also helped with the deposit and we let the flat slightly below market value to help the affordability.

April 2015

LANDLORD INVESTOR

And the investment has done very nicely. Overall, Reading property prices are above the national average, mainly because of the commutable distance to London. The average price nationally according to the Land Registry is currently £180,000, with the average price in Reading being just over £230,000.

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And this is especially the case considering the growth expected for the region from a transport, population and economic perspective. There is a good skilled workforce and especially great access to international transport hubs (including Heathrow Airport), with successful businesses in ICT, Business & Financial Services, Energy & Renewables, Pharma – Bio, Defence and Cybernetics at the University of Reading (which happens to have the super housing expert Professor Michael Ball). Reading itself has been promoted by the ‘Centre for Cities’ experts who say it is one of the “five cities to watch…because they “will be better-insulated from the economic impact of the spending squeeze, and have high potential to create private sector jobs”.

BUY TO LET ANALYSIS

From an average price increase over time perspective, prices have increased by around 6% a year. But in Reading we’ve seen slightly slower annual growth of just over 5%. This is likely to be due to the huge range of property values, ranging from cheaper council estates through to city centre built flats, and multi-million pound homes on the way out towards the even more expensive Henley on Thames! So far for 2015, prices are performing well in Reading, with property prices consistently up 12% year on year for the last six months, which, versus the national average of 6.7%, is great news for those who have already invested in the area. However, for those thinking of investing, prices can be considered to still be ‘good value’ as they are just 6% higher than the market height. This suggests there is still some growth in the area to be had.

It’s also hoped, better infrastructure with nearly £1billion of works on Reading Station and better access from the M4 via junction 11, junction 11 will add to the regions popularity. In addition, there are plans for a new Green Park station which will be near to the Madejski Stadium, with construction expected to start in October 2016.

So with great jobs, additional infrastructure, it’s not a surprise that the population is expected to explode, and although there is a good level of building new homes planned, it’s still not enough to keep up with demand, hence there is likely to be continued pressure on house prices. To date, population levels have increased by over 10% since mid-2005, but according to the local paper, the number of dwellings has only increased by just over 2,700, although this rises if you include commercial to residential conversions too. Savills predict the South East area will increase in price over the next five years by just over 26%. A tidy return as long as you are gearing your investment.

LANDLORD INVESTOR April 2015

BUY TO LET ANALYSIS

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From a rental perspective though, as prices tend to increase faster than rents, it could be more difficult to make property deals stack up from a property investment and buy to let perspective. Average rents in Reading tend to be around £900 per month, a bit less if renting to those on benefits. The good news though is that rents tend to increase in line with inflation in this area. According to the Belvoir Rental Index, rents have risen year on year by just over 3%, which is typically the same level as annual inflation over time.

As long as you can get a good deal to stack up which is in easy access of some of the new transport changes, the future for investing in Reading certainly looks bright! ⌂ For more buy to let and property investment help, visit propertychecklists.co.uk for FREE property checklists.

MEET KATE, WHO WILL BE HOLDING SEMINARS AT ALL OF THE LANDLORD INVESTMENT SHOWS THIS YEAR INCLUDING: READING - APRIL LONDON OLYMPIA - JUNE MANCHESTER - OCTOBER LONDON OLYMPIA - NOVEMBER Www.landlordinvestmentshow.co.uk

April 2015

LANDLORD INVESTOR

Download all the FREE checklists a Buy to Let Investor will need Independent expert advice on: • Property prices, rents, returns and forecasts • Analysing your buy to let • How to buy property below market value • How to choose the right buy to-let services

SEE OUR CHECKLISTS FOR ALL THE BUY TO LET HELP YOU WILL NEED www.propertychecklists.co.uk

T: 01652 641 722

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INDUSTRY UPDATE

HOW WILL BUY-TO-LET INVESTORS COPE WITH THE COMING CHANGES? Tom Entwistle - LandlordZONE

IN ANY BUSINESS THERE ARE ALWAYS PROS AND CONS, PLUSES AND MINUSES, OPPORTUNITIES AND THREATS. April 2015

LANDLORD INVESTOR

Investing in buy-to-lets is no exception, and with recent developments, particularly the introduction of a slew of new rules and regulations, we’ve witnessed the balance seemingly tipping more to the latter in each case – the cons, the minuses and the threats.

There’s been something of a public backlash against buy-to-let over the last 12 months or so, and campaigning groups including Shelter, The Citizens Advice Bureau and Generation Rent have through powerful lobbying prompted a major change in the housing regulations going through Parliament right now, which will without doubt make the job of the average landlord more onerous.

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Labour policy is to go even further, and if elected in May they are committed to introducing a form of rent control and compulsory long-term tenancies.

The firm has identified the PRS as the fastest growing tenure and the “highest performing real estate asset class” in the UK, but says institutional investors currently own less than 5% of the sector.

A growing residential under supply issue means that there is a surplus demand for private renting in many areas, particularly the major cities and areas of high student and immigrant densities, which means, Invesco thinks, large scale investors could be missing out on attractive returns.

This in itself could be a threat to the traditional small landlord, a group which makes up around 70% of the market, owning just one or two buy-tolets, because when institutional investors, encouraged by government incentives, move into some locations in a big way, they could upset the supply / demand balance.

It’s enough to strike fear into the average buy-tolet landlord, but should we really be concerned?

The growth of renting in the UK has been exceptional, perhaps the fastest growing business bar none over the last 20 years, and right through the worst recession in living memory.

For anyone involved in the industry it’s been a bit of a bonanza: from investors, landlords, letting agents to property insurers, mortgage lenders, software providers.

Whether they came early or late to the party, they’ve all realised the sheer potential of this multi-billion pound industry, which grew from housing around 10% of the population in 1990, to something like 20% today, and is expected to continue growing regardless.

LANDLORD INVESTOR April 2015

INDUSTRY UPDATE

International investment company Invesco is saying that institutional investors are significantly underinvested in the private rented sector (PRS), which they see as a potentially lucrative area of the real estate market.

Other threats include selective licencing, which many councils have been introducing across the board, charging landlords an average of £500 per letting, the need to bring properties up to minimum energy efficiency ratings from 2016, and the introduction of a slew of extra management rules and regulations which must be complied with in future.

INDUSTRY UPDATE

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The reality is landlords are still investing heavily.

According to the FTAdvisor buy-to-let is the only area that has seen mortgage lending grow in the last 12 months, data from the Council of Mortgage Lenders reveals, with mortgage lending to firsttime buyers and homemovers plummeting.

So, if you are to take advantage of the vast potential of this lucrative market, as a landlord, or anyone else involved, from agents to eviction specialists, there is likely to be no real choice in the future: you will have to work to a high standard in the way you carry out your role.

There were 19,000 loans advanced to first-time buyers in January worth £2.8bn, down 14 per cent and 10 per cent compared to January 2014. Home movers were advanced 22,400 loans with a value of £4.2bn, a decline of 17 per cent and 14 per cent.

Facing up to these issues means acquiring the knowledge of exactly what’s required, the rules and regulations that you need to comply with.

Then making sure that not only are your properties fully up to standard, but managing and following the rules to the letter as well.

Bucking the trend was the buy-to-let sector. There were 18,200 buy-to-let loans with a combined value of £2.5bn in January, up 12 per cent and 14 per cent on the same period in 2014. This could receive a further boost after April if “Pension Freedom Day” produces a switch of pension fund money into property investments.

My view is that no government, whatever colour, wants to destroy this success story, it’s far too important to the economy and the country. Yes, governments want to give tenants more protection, because they are being lobbied strongly to do so, and they want to restore the supply / demand balance to the market, to moderate rent increases.

But above all they want to see a well-managed and successful lettings market and to route-out the rogue landlords.

April 2015

LANDLORD INVESTOR

Particularly onerous after the introduction of Sarah Teather’s Tenancies (Reform) Bill, that is likely to be in place from October, is to deal effectively with any complaints about repairs. Failing to do so could result in your inability to evict a really bad tenant. ⌂ Tom Entwistle is Editor of LandlordZONE.co.uk and an experienced landlord himself.

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INDUSTRY UPDATE

THE GOVERNMENT HAS GONE INTO OVERDRIVE: THERE MUST BE AN ELECTION COMING. Peter Littlewood Southern Landlords Association

THERE HAS BEEN A FLURRY OF THINGS COMING OUT OF THE CURRENT GOVERNMENT, PRIOR TO MARCH 23RD - WHEN PARLIAMENT IS DISSOLVED AND NO MORE CHANGES CAN HAPPEN. April 2015

LANDLORD INVESTOR

I mentioned in the last issue of Landlord Investor, that retaliatory evictions had come back via the De-Regulation Bill.

DE-REGULATION BILL This is a bill that started as non-entity, as far as landlords are concerned. But as is the way with Parliament, it has had all sorts of amendments added to it, which have nothing to do with the original intention of the Bill.

The first thing to note is that this is still making its way through Parliament, so could be subject to further changes, and might not even become an Act. So please read the summary below with the knowledge that it might change. However, it is very near to the end of its passage, and is most likely to become an Act before the end of March, when Parliament is dissolved.

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THE MAIN AREA'S THAT THIS MIGHT AFFECT YOU ARE: a. If a tenant makes a legitimate complaint, in writing, regarding disrepair, and the Local Authority (LA) has issued an appropriate notice within 30 days, then any subsequent S21 will not be valid.

However, the S21 will NOT be invalid if:

i. The tenant failed to use the property in a tenant like manner;

ii. OR the disrepair is due to a breach of a tenant's obligation in their tenancy agreement;

iii. OR a mortgagee is seeking recovery of a property under a mortgage that was in place before the tenancy commenced;

iv. OR when the s21 notice is served the property is genuinely on the market for sale.

2. This also applies to any complaints made about the common parts of an HMO, or for Block Managers.

So it will become even more important for you to keep proper records, especially of maintenance issues. If you are asked for repairs, ensure you respond appropriately, within 14 days, in writing. If there is no dis-repair, you will need to prove why that is so.

3. It is also intended that S21 will not be allowed: a. To be issued in the first 4 months of an AST; b. A court order to evict cannot be issued if the property does not have a valid EPC, and/or Gas Safety Certificate. This restriction would be lifted as soon as these documents are provided.

4. Finally , a tenant will be due to be repaid any overpaid rent, if due to the issue of a S21. That includes:

A court case last year actually was in the landlords favour, stating that if an AST had commenced as Fixed Term, the Section 21(1)(b) can always be used.

This is much easier to use, especially as it doesn’t ask for the end date.

The Government are now going further. Under this Bill, it will be possible for the Secretary of State to amend the ‘Prescribed Form’ of a S21. We are told that it is intended that the two S21’s will become the same as the Fixed Term S21.

Not before time.

6. Tenancy Deposits a.

Any AST’s that commenced prior to April 6th 2007 will still require the deposit to be protected, and the Prescribed Information (PI) issued.

However the Bill (when it becomes an Act) will give landlords 90 days to protect all pre-2007 deposits without any problems.

This is likely to be April/May/June – watch this space.

b. It will still be a requirement to have issued the PI before issuing a Section 21 (S21), but for pre 2007 AST’s (and only these) the deposit can be protected just before issuing the S21.

Any AST that was originally a Fixed Term will not have to have the PI re-issued when it becomes Statutory Periodic. This overturns the ruling in the Superstrike case.

In fact the Bill goes further, in that if a new Fixed Term is issued with all the same landlord/tenants/ address as the old one, the PI does not have to be issued;

a. The S21 ends the AST before the end of a period already paid for;

b. If the tenant has paid rent in advance.

5. As many landlords are painfully aware, it is easy

LANDLORD INVESTOR April 2015

INDUSTRY UPDATE

1. Retaliatory Evictions:

to get the S21 wrong, and have it thrown out at court. This is generally due to getting the end date of the period wrong on a Section 21(4)(a), the notice to be used for an AST that commenced as a (Contractual) Periodic.

INDUSTRY UPDATE

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SOME OTHER AREA'S THAT MIGHT AFFECT YOU ARE: SMOKE ALARMS

Additionally, they have laid before Parliament new conditions that must be met before Licensing can proceed:

It has just been announced that as from October this year, all rental properties will have to have smoke alarms, and CO2 alarms fitted. Failure to do so can result in a £5,000 civil penalty.

2. The LA deem there to be an issue with housing

Landlords/agents will be responsible for testing them on tenancy changeover, and I would suggest also on mid-term visits. It remains the tenant’s responsibility to test them on a regular basis.

LICENSING The Government, in the form of DCLG, have just been announcing changes to Selective Licensing.

They have previously (February 2014) stated that they are unhappy with the way that some Local Authorities (LA’s) have been using Selective Licensing, and preferred the use of Voluntary Accreditation. In the words of the Housing Minister ‘These changes will help local authorities focus their enforcement activity where it is most needed while ensuring that good landlords are not adversely impacted.’

As from April 1st any LA wishing to implement Selective Licensing will have to seek permission of the Secretary of State (currently Eric Pickles) if the area selected is more than 20% of their geographical area or would affect more than 20% of privately rented homes in the local authority area. This is not retrospective.

April 2015

LANDLORD INVESTOR

1. The area contains a high proportion of properties in the PRS condition in the area – and they intend to carry out inspections to enforce standards

3. There has been an increase in migration (or an expectation of it) and that introducing licensing will improve socio economic conditions – particularly relating to overcrowding

4. The area is suffering from high levels of deprivation and licensing and other measures could be used to address it. Deprivation can be judged based on employment levels, average income, health of households, availability of education, housing conditions, the physical environment, crime levels.

It is not known when this will become law.

Note the rules regarding Licensing of HMO’s, both Mandatory, and Additional remain unchanged.

For anyone that wants to read more on this, the Government have just put out an excellent paper.

Entitled ‘ Selective Licensing of Privately Rented Housing (England & Wales) ‘ it can be found by putting that title Google, I will also put it on the SLA web site.

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COMMUNAL HEATING FOR HMO'S

At first look it appeared to only affect Block Managers/Freeholders for District Heating, as sometimes used in blocks of flats. But the legislation specially mentions Communal Heating systems, and would thus affect HMO’s where the boiler supplies heat and hot water for the whole building. Any work that has to be carried out has to be before the end of 2016.

For more information see www.gov.uk/heat-networks.

Nick de Bois, MP for Enfield North, has tabled a ten-minute rule bill in the Houses of Commons in a bid to change the law to allow the housing ombudsman to intervene between neighbours and landlords.

The Tory MP is campaigning for more rights for the neighbours of anti-social households.

De Bois presented his Housing Ombudsman (Power to Settle Disputes Between Neighbours and Tenants) bill to Parliament at the beginning of March.

He is seeking new powers for the Housing Ombudsman to intervene in disputes between landlords of HMOs, including hostels, and neighbours.

Currently, the rules only allow the ombudsman to step in between a landlord and tenant

COURT FEES On Monday March 9th Civil court fees rose substantially, especially for larger claims. This will only affect you if you are making a money claim against someone – e.g. rent due.

Normally, you will recover the fees if successful, but you might be successful. As an example the fee for a claim of £200k rose from £1,515 to £10,000 –but this is at the top end of claims.

The message is not to allow claims to get too large before going to court.

VOLUNTARY SCHEME FOR LANDLORDS A website is up and running for landlords to provide voluntarily basic contact information about their tenants so water companies can register them for billing and tackle this major source of water debt.

Customer debt currently adds £15 on to everyone's water bill. By far the biggest source of bad debt comes from tenants of rented properties who leave before settling their water bill.

Unlike other sectors, water companies have no contracts with their consumers because they supply water on a statutory basis and consumers are not obliged to inform their water company when they move in or out of a property. ⌂ The website can be found at www.landlordtap.com

LANDLORD INVESTOR April 2015

INDUSTRY UPDATE

Under new legislation introduced last year (Heat Network(Metering and Billing) Regulations 2014) it was proposed that the National Measurement Office be informed by April 30th this year, and at least every 4 years thereafter of all community heating schemes. This information needs to be sent to heatnotifications@nmo.gov.uk.

PRIVATE MEMBERS BILL REF HMO'S

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PROPERTY MAINTENANCE

WHO IS RESPONSIBLE FOR THE GARDEN OF A RENTED PROPERTY? Chris Rowell Total Landlord Insurance

AS THE WARM WEATHER RETURNS, MANY HOMEOWNERS AND TENANTS WILL BE LOOKING TO MAKE USE OF THEIR GARDENS AS THEY ENJOY THE LIMITED SUNSHINE WE RECEIVE. April 2015

LANDLORD INVESTOR

Whether it be simply enjoying the summer weather, making the garden more aesthetically pleasing or hosting a social event, it is important that during this time a tenant is aware of what they are allowed and restricted to do.

When it comes to the gardens of a rented property, landlords and tenants can get easily confused with what’s required from both parties. Subsequently, many disputes occur due to the withholding of deposit money as a result of garden issues.

What can and can’t be done to the garden by the tenant? What is the minimum (if anything) that the landlord is expected to do? What is the tenant required to do? How can landlords protect themselves against damage/neglect by the tenant?

These and many more questions are asked on a regular basis by landlords throughout the country.

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WHAT IS THE LANDLORD REQUIRED TO DO?

Firstly, a tenant is expected to abide by the terms in the Assured Shorthold Tenancy (AST) agreement that were agreed prior to them moving into the property. The minimum that is generally expected of the tenant throughout the tenancy is that they keep the garden litter-free, reasonably tidy and not overgrown. This will usually be a standard clause in an AST agreement.

The landlord is required to maintain areas of the garden which would otherwise be unreasonable to expect from the tenant. It is also the landlord’s responsibility to ensure that action is taken should the tenant report an issue which is not their fault.

The tenant is only responsible for returning the garden in the same state that it was in when they moved in. This means that a landlord cannot expect a tenant to carry out improvements to the garden if it was already in a mess.

Tenants cannot be expected to perform tasks that require expertise. For example, a landlord can’t penalise a tenant for failing to prune a tall tree – it would be the landlord’s responsibility to make the relevant arrangements for this.

Social events in the garden (such as BBQ’s) are permitted unless it is otherwise stated in the AST agreement. Therefore, if a landlord wishes to forbid such activities, it is important to include a clause in the AST agreement prior to the tenant signing. It is also worth noting here that tenants are responsible for any noise and nuisance or damage to the property caused by themselves or their guests.

If the tenant wishes to change the garden in any way (even making improvements) they are required by law to gain the landlord’s approval beforehand - this also includes planting their own garden. Failure to do so could allow the landlord to charge the tenant the cost of returning the garden to its original state.

For comfort and ease, it is not uncommon for portfolio landlords to hire a full-time gardener to maintain all of their properties. This cost can be applied to a tenant’s monthly rent if they have previously agreed.

However, please note that if it states in the AST agreement that the landlord will provide a gardener, they are then obliged to do so for the length of the tenancy.

STEPS A LANDLORD CAN TAKE: 1.

Landlords should ensure that they are taking a sensible deposit from the tenant before the tenancy begins. This can then be used to recover some of the costs that might occur due to damage or neglect by the tenant.

2. It is imperative that landlords clearly state within the AST agreement what is expected of the tenant and also any restrictions that may be imposed.

3. It is recommended to embed dated photographs of the garden in the inventory check-in report. These can then be compared with the check-out report when the tenant is leaving to establish differences to the original state of the garden.

4..Regular

property inspections should be performed throughout the tenancy which will allow the landlord to assess the condition of the garden and potentially spot any issues early therefore reducing the extent and cost of damage.

5. A landlord should have an adequate buildings insurance policy in place that covers malicious and accidental damage by tenants and their guests. ⌂ For further advice contact Chris on: T: 0800 63 43 880 M: 07983 150 433 E: chris.rowell@totallandlordinsurance.co.uk W: www.totallandlordinsurance.co.uk

LANDLORD INVESTOR April 2015

PROPERTY MAINTENANCE

WHAT IS EXPECTED OF THE TENANT?

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YOUR PROPERTY INDUSTRY SPOTLIGHT PARTNER

INDUSTRY SPOTLIGHT: FLOODCHECK WORLD LEADERS IN FLOOD PROTECTION DEVICES

Adam Saint - Floodcheck

TODAY, FEW PROPERTIES HAVE ANY TYPE OF CURRENT FLOOD PREVENTION PROTECTION. Typically, they are only installed after a water damage incident and at the insistence of insurers. It is anticipated that most properties will have a flood prevention device in future, in the same way as electrical fuse boxes are installed. We believe that Floodcheck products (and associated services), can potentially be deployed to all properties, all over the world.

HISTORY Whilst studying at London University in 1972, William Saint worked at a small chain of retail shops specialising in white goods such as dishwashers and washing machines. Saint saw the extensive damage that these products could cause by flooding and leaking if broken. He invented the first Floodcheck product, the MANUAL model as a solution for protecting properties by preventing flooding from these machines.

In 1998, working with the latest micro-processor electronics, William Saint designed a more sophisticated product and the AUTO model was invented.

April 2015

LANDLORD INVESTOR

Saint entered the Auto Model in the Essex County Council‚ Innovation Competition and won the Innovation Award. The product was later granted International Trademarks and Patents. It was tested by the UK water standards to WRAS Requirements and so Floodcheck was formed.

Floodcheck continues its research and developments in products to monitor, save water and to protect properties. The “interceptor” product was launched in 2011 after 5 years of development. It was awarded the coveted NATIONAL HOMEBUILDING and Renovation Award for Innovation and Excellence.

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OUR PRODUCTS

WHAT IS FLOODCHECK? An Award winning installed device which constantly monitors the water supply and so minimises internal water damage protects a property from internal flooding.

FLOODCHECK PROTECTS YOUR PROPERTY FROM FLOODS BY AUTOMATICALLY TURNING OFF YOUR WATER:

FLOOD DAMAGE According to insurers, an escape of water claims is 3 times more likely than a theft claim and 13 times more likely than a fire claim. Insurers received a staggering 3500 claims per day last winter. Household damage caused by burst pipes averaged £25,000 per household.

TIME OUT LEAKS If there is a burst pipe or a forgotten tap is letting water run continuously.

FREEZE PROTECTION FROZEN PIPES If the air temperature where the Floodcheck is installed goes below 3 deg Celsius.

EXCESS FLOW MAJOR RUPTURE If there is a sudden unusual or abnormal demand on the water supply.

NON USE VACANT PROPERTY If no water is used for 24 hours, the Floodcheck will turn off your water safely until you return.

WATER DETECTION If a leak is detected the Floodcheck shut off the water supply until it is reset at the press of a button.

If your home is affected by frozen or split pipes, the stopcock must be turned off immediately.

Split water pipes require fast and effective repair as a significant amount of structural and electrical damage can be done in a short space of time.

READERS DEAL We have various flood prevention solutions starting from £39.99 to complete home and office solutions for £249.00 plus VAT, but we a running a special deal for Landlord Investor readers until 31st May 2015.

By quoting landlordinvestor when placing an order, readers are rewarded with a £50 discount on a complete solution package, which include the Remote Switch and all fittings. ⌂ So do not hesitate to get in touch: 0844 335 6668 www.floodcheck.co.uk

LANDLORD INVESTOR April 2015

INDUSTRY SPOTLIGHT

The Floodcheck Auto valve is a flood prevention device which protects your property from internal flooding by monitoring your water supply. It automatically switches off your main water supply if it detects a water leak, preventing water damage, reducing your insurance premium and giving you peace of mind.

YOUR PROPERTY LETTINGS & MANAGEMENT PARTNER

22

60 SECONDS WITH easyProperty.com EASYPROPERTY.COM IS THE LATEST EXCITING VENTURE FROM THE EASYGROUP, FOUNDED

BY STELIOS, AIMING TO MAKE LETTING AND SELLING PROPERTY A WHOLE DIFFERENT EXPERIENCE. We launched our lettings service in September 2014 and are already making waves in the sector with our flexible offering, giving landlords choice and control.

April 2015

LANDLORD INVESTOR

WHAT IS YOUR ELEVATOR PITCH? easyProperty is the next generation of estate agent: by giving landlords full control over their level of service through our easily manageable online platform – landlords can pick and choose the services they require, and leave the ones they don’t. We are empowering landlords with a truly flexible and cost efficient letting solution which works for them.

HOW CAN YOU BE SO MUCH CHEAPER THAN THE HIGH STREET? The reality is, when you use a traditional agent you’re mostly paying for something other than the service you’re getting. For a start, because we’re online, we don’t have the running and staffing costs of umpteen local branches - that saving is reflected in our prices. And secondly, landlords often instruct several different agents to let their property, with only the successful agent receiving the commission fee. While this might seem attractive for landlords at first glance, in reality it means traditional agents have to cover the cost of work done for which they weren’t paid, that loss is reflected in their pricing. Whereas, all our services are transparently priced, so what you pay is a true reflection on the value of the service you receive.

Fairer. Simpler. Cheaper.

23

Traditional Agents will find themselves squeezed by the emergence of online agents as the new way to let and sell property – the good ones will realise they need to offer more competitive terms, but many are too old fashioned to keep up with the vast changes sweeping the property sector.

HOW DO YOU FEEL THE INTERNET HAS CHANGED THE ROLE OF A TRADITIONAL HIGH STREET AGENT? For too long traditional agents have had it all their own way – lack of transparency has meant that they’ve got away with charging astronomical fees to both sides – landlord and tenant. Now that’s finally about to change, as the consumer is empowered by the internet – they can now discover that they don’t have to pay someone thousands to let or sell their property for them – but they can still demand a high quality service.

WHAT IS THE MOST SATISFYING PART OF YOUR JOB? Helping landlords achieve their goals and find quality tenants for a fraction of the cost of using a traditional agent.

WOULD YOU SAY THERE IS A HOUSING SHORTAGE IN THE UK? Yes, clearly there is pressure on housing caused by lack of investment in new builds and council homes over the last few decades, whilst the population has grown and many of us choose to live in smaller household groups than we used to. However, whilst blame is laid by the mainstream media on private landlords for outbidding first-time buyers and raising rents, this simply isn’t the whole story.

In fact private landlords have done much to bring unused and low standard housing up to scratch, investing time and money, and providing much-needed rental options for those without the funds to get on the housing ladder. We salute those landlords and support them in doing the right thing – providing a knowledge hub full of useful information on how to fulfil their obligations – as well as ensuring that they can get all the services they need without being fleeced. You can’t avoid getting an EPC or a gas safety certificate, but you can avoid paying through the nose for these essentials. And keeping costs down for landlords means less chance of rents being inflated to cover those costs, so tenants are happier too.

ZOOPLA OR RIGHTMOVE? Both – statistics show that only 32% of traffic to Rightmove & Zoopla is shared by the two leading property portals, meaning being on both is essential for maximum reach. That’s why our landlords can access low cost advertising on both of the main portals as well as hundreds of other property sites, all for a weekly flat fee of £9.99. Can’t say fairer than that!

HOUSE, APARTMENT, ROOM? Any - you can list any type of property on easyProperty.com from a single bedroom in a shared house to an opulent mansion, completely free!

LANDLORD INVESTOR April 2015

LETTINGS & MANAGEMENT

WHAT IS YOUR PROPERTY PREDICTION FOR 2015?

YOUR PROPERTY LETTINGS & MANAGEMENT PARTNER

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RENT OR BUY? For now we are offering ground-breaking services for the rental market, but watch this space, as you’ll soon be able to buy and sell property through easyProperty.com and save thousands compared to using a traditional agent.

COMPLETION OR INSTRUCTION? Our flat-fee products are payable up-front at instruction, but that doesn’t mean we’re not incentivised to provide an excellent service and get the best possible results quickly for our customers.

In the internet age, reputation is everything – evidence of our excellent reputation can be found on Trustpilot.

April 2015

LANDLORD INVESTOR

ARE YOU OFFERING ANY SPECIAL PROMOTIONS? For landlords looking for a great value tenant find package, look no further. Everything you need to get started, including 3 months advertising on the biggest portals (Rightmove, Zoopla & Primelocation & many more), to let board and all the paperwork for just £59.99. Call our ARLA qualified team to get started: 020 3096 5433. ⌂

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26

GREAT PROPERTY TIPS

BUY TO SELL PROPERTY STRATEGY PART ONE: GET IT RIGHT! Susannah Cole The Good Property Company Property is actually quite simple, though not always easy! Running a Buy to Sell Strategy is a Farming Strategy; making large chunks of cash usually within the year; having a quick turnover (leading to increased Return on Capital Employed) and getting a decent profit margin from each project.

AT THE GOOD PROPERTY COMPANY, WE LOVE THIS STRATEGY. For me, running a Buy to Sell Strategy allows me to create a greater cash pot with which to buy more properties to keep for long-term wealth. It is a great way to make serious cash in property, even if in my case, I end up spending it on more property!

In systemizing this strategy, I have found that there are 7 Key Stages to running a successful Buy to Sell Strategy. These are:

1. Team Building 2. Stock Buying; routes to stock 3. Financial Analysis 4. Preparation for purchase and refurbishment 5. Adding Value 6. Sales Purchase 7. Post Project Analysis – otherwise known as improvement!

April 2015

LANDLORD INVESTOR

I will cover all 7 stages in a series of articles over the next three months.

This month, I focus on building your team and finding the deal; two fundamental aspects to getting a Buy to Sell Strategy right.

TEAM BUILDING OK, so I am not starting with the sexy stuff- making a quick buck. I am starting, as the late great Stephen Covey would say ‘by sharpening the saw’. With a sharp saw, it is a lot easier to cut down the tree. I would rather your team and tools were right, so that you had every chance of running a successful, repeatable Buy to Sell Strategy. Property involves large chunks of money, and I want you to succeed.

It is amazing to think of all the people who are involved in the team effort of a Buy to Sell Project, even if the property is bought by one person, you!

27

(Vendor) Mortgage Adviser

Conveyancing Lawyer

Funding Partner - bridging

Accountant & Book Keeper

Commercial Lawyer

Private Funding Partner

Builder team

Cleaner

Odd Job Man

Individual trades

Window Cleaner

Estate Agent

Project Manager

Gardener

Photographer

(Buyer)

You don’t need to employ them all directly, but you do need to be working with the best in the business. Why? You are more likely to run a successful project with a profitable outcome.

HOW CAN YOU MAKE SURE YOUR TEAM ROCKS? In a perfect world, you would find them before you start the project, taking the time to have a list of people who are recommended to you, and whose references you have followed up. This is time consuming, but will pay off in the long run. In reality, it may be a case of testing out their work, particularly with builders, and only continuing to work with people who have build quality and great project delivery at good prices. So combine a ‘plan it out’ and a ‘suck it and see’ strategy to building your team.

I suggest you make sure you have 3 of each type of role, rather than relying on one person for each role.

I learnt this the hard way but that’s another story...!

STOCK BUYING The old adage rings true here – you make your profit when you buy the property.

Sourcing profitable projects is both an art and a skill; it requires a lot of work but it’s worth all the effort you put in.

You can source from three routes:

1. Direct to Vendor 2. Estate Agents 3. Auction You can also skip all that hard work and find a reputable sourcing company to do the graft for you.

Remember it is the end result you are interested in, and outsourcing some aspects of this strategy makes sense, depending on your personal circumstances.

LANDLORD INVESTOR April 2015

GREAT PROPERTY TIPS

(Selling Estate Agent)

GREAT PROPERTY TIPS

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DIRECT TO VENDOR

AUCTIONS - CASE STUDY

If you have the time and the funds to carry out a direct mail campaign and you are looking for more than one property (otherwise it is not cost effective), then you may consider a Direct to Vendor Campaign. This involves monthly leafleting in a targeted area; setting up a Call Centre number, so that the call centre team, not you, are always contactable; preparing the paperwork/contract for the vendor in advance; ensuring you have two solicitors who have worked together before, and having the funding in place in order to complete on deals quickly.

Ellsworth Road, a lovely two bedroom house in Bristol, bought pre auction, exchanging just 3 hours before the auction was due to start! Talk about cutting it fine!

ESTATE AGENTS Sourcing from Estate Agents is free, a real plus when comparing this to sourcing Direct to Vendor, and is a great start to finding profitable projects.

Sourcing from agents is a numbers game. We look at our numbers weekly: how many phone calls and viewings needed to get the possible opportunities.

We look at around 30 properties a week, and make 100 – 140 calls a week – truly a numbers game!

Improve your efficiencies: I want to see an offer to viewing rate of at least 85%; any less than that shows me that more desk research is needed.

Viewing properties you’re not going to offer on is a waste of your time and the estate agent’s, so you need to improve your ability to unearth discounted properties on the phone.

April 2015

LANDLORD INVESTOR

Purchase Price £103,000 Refurbishment Costs £15,000 Sold Price £150,000 Refurbishment Time 6 weeks, offer received just 11 days after going on the market Auctions are great: I do a full day on my mentoring group on how to buy at Auctions, as there is a lot to cover. Here I will simply point out that you need to get your lawyer to always review the legal pack in advance, and be on hand via mobile for any last minute legal changes. We buy pre, during and post auction, something not everyone is aware you can do, with the aim of buying at least one a month pre auction. ⌂

If you want to get in touch with us please email Jess at education@thegoodpropertycompany.co.uk or call 0117 942 8914.

WRITTEN

BY

INDUSTRY

EXPERTS

COVERING

ALL

ASPECTS

OF

BUY-TO-LET

LANDLORD | PROPERTY | INVESTMENT

AUCTION | COMMERCIAL | COMPANY SPOTLIGHT | DEVELOPMENTS | EXPERT ADVICE | GREEN DEAL INVESTMENTS | NEW INVESTORS | LANDLORD ASSOCIATIONS | LANDLORD INSURANCE | LEGAL LOCAL PROPERTY MEETINGS | NEWS | TAX ADVICE

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BY EMAILING: MAGAZINE@LANDLORDINVESTMENTSHOW.CO.UK OR CONTACT A MEMBER OF THE TEAM BY CALLING: 0208 656 5075

30

LANDLORD INSURANCE

DO YOU REALLY KNOW WHO YOUR TENANTS ARE? Steve Cox - Alan Boswell Group Many landlords will have experience of tenants who have turned out to be less reliable than initially perceived. In most cases this will not result in financial loss but if you are saddled with tenants who turn out to be habitually bad payers, or worse are actually criminals, perhaps planning to use your property for illegal activities such as cannabis growing, you could stand to lose serious money.

STEVE COX PROPERTY INSURANCE SPECIALIST FROM ALAN BOSWELL GROUP EXPLAINS HOW TO HELP AVOID THE PERILS OF TRICKY TENANTS. “It is of course possible to buy insurance to help evict troublesome tenants or cover rent if they decide to stop paying you – and I encourage everyone to take out these policies for peace of mind – but often prevention is better than cure. Getting the right kind of tenant in the first place can help you avoid legal wrangles, damage to your property and the general stress of dealing with the unwanted hassle” advises Steve.

April 2015

LANDLORD INVESTOR

APPROPRIATE CHECKS “It is strongly recommended to arrange for tenants to be properly referenced before they move into your property” continued Steve. Tenant Referencing can be easily arranged and cover not just income and a six-year credit history, including County Court Judgments and bankruptcy but also validation of references from previous properties they have leased and any history of arrears or repossessions.

“Having this sort of information enables you to make an informed decision regarding whether they are suitable tenants for you”, comments Steve. "Because the checks are undertaken by a professional organisation on your behalf, they are less susceptible to manipulation. It should be noted however that no system is foolproof, so there is no substitute for also conducting a personal interview either directly, or via a trusted agent."

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PROTECTING YOUR INCOME You should aim to have a written tenancy agreement in place, such as an Assured Shorthold Tenancy agreement, which sets out the amount and when the rent is due. If your tenant is constantly failing to pay and you are left with no other options you can follow procedures to evict your tenant and insurance can help you cover the losses of any unpaid rent.

Your tenants may not deliberately be avoiding their responsibilities of paying rent. Redundancies or relationship breakdowns can mean their lack of income impacts upon yours. In both instances rent guarantee insurance can act as a safety net, protecting your rental income by enabling you to claim back the rent you are owed.

GETTING THE RIGHT ADVICE It is important to seek independent professional advice before making any decision about what liability insurance to take up in order to protect your financial obligations. Steve is able to provide professional, independent advice and can explain how tenant referencing, rent guarantee and legal expense can protect your investment. ⌂

For further advice contact Steve on: T: 01603 218031 M: 07766 715654 W: alanboswell.com E: scox@alanboswell.com Alan Boswell Group offers a range of other services including business, home, travel, car insurance and financial planning.

LANDLORD INVESTOR April 2015

LANDLORD INSURANCE

Taking the precaution of seeking proper references is not only good practice; failure to do so could affect your right to claim under legal expenses insurance.

Having the process undertaken professionally gives you an added layer of reassurance that you have done everything possible to protect your investment.

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EXPERT ADVICE

PENSION POT: IS IT TO BE CHAMPAGNE OR BRICKS & MORTAR?

David Humphreys Property Investor Online

LAST MONTH, I TALKED ABOUT A FACEBOOK THREAD ON THE "UK PROPERTY TRADERS" PAGE AND THE POLL THAT I RAN ABOUT THE MOST POPULAR PROPERTY INVESTMENT TRAINERS...

My poll still ended on February 15 but Chris's thread continued until March 4, racking up 433 posts.

The total was 414 when I wrote March’s article so, quite evidently, there is still considerable interest in education and training in the world of property investment, which is further evidenced by a thread started by Rob Moore of Progressive on March 17 which, within 24 hours, generated over 100 posts.

April 2015

LANDLORD INVESTOR

By the way, if you haven't had a look at either of these threads, "Facebook UK Property Traders", it is well worth taking the time, if only to speed read the posts, because you will find a wide variety of opinions, some very contradictory, on this very complex subject and of course there is no "pay to view".

My reason for starting this series of articles on Property Investment Education & Training for the Landlord Investment Show magazine was that the relaxation of the pension rules takes effect from April 6 2015. The main changes affect people who are 55 or over and have a pension based on how much has been paid into their pot, a "defined contribution pension". If you qualify, you will be able to, or can now if you're reading this article after April 6, take lumps of tax free cash out of your pension pot to do with what you want.

33

EXPERT ADVICE

I assume that if this rule change affects you, you will have read about how you and many others will supposedly be buying high-performance cars, taking luxury around the world cruises, drinking Champagne rather than a nice glass of Chardonnay from now on, in fact generally acting completely “irresponsibly” with what after all is your money. You will no longer be as restrained by the "nanny" state in this aspect of your life.

Of course, if you want to act responsibly, that is not buy the sports car & champagne, but stick to the Chardonnay and buy good old-fashioned "bricks & mortar". Buy high quality, affordable homes, of which there is a dire shortage in the UK, and let them out to the increasing number of tenants wanting a good home.

But you will be stepping into a very complex investment world with a huge variety of options to choose from. To understand and make sense of this world you will need quite a lot of education and training, which really mean the same thing.

Wikipedia defines "education" as a form of learning in which the knowledge, skills, of a group are transferred whereas "training" is developing in oneself or others, skills & knowledge that relate to specific useful, competencies and has specific goals of improving one's capability.

Both apply, but in my experience, the emphasis has always been on "training", particularly as property investment includes many practical aspects and most investors enjoy getting down and dirty when developing their property investments rather than limiting their activities to operating a mouse, phone and keyboard (shares), sledgehammers, power saws & drills, boys toys, are much more fun!

You may be an unusual property investor combination, both cash and time-rich. Many novice investors are one or the other but not both, and work with the other. The time-rich JV with the cash-rich and vice-versa. Often both are also in a learning curve so it is essential that both parties understand the strengths and weaknesses of the other party.

Assuming that you are this unusual investor, cash and time rich, you still have a major learning curve to travel because, to be successful, you have to work with a team of people who are often expert in only one field.

But before you start recruiting your team, commonly called a Power Team, you need to make some basic decisions because, whilst some members of your Power Team can be based anywhere in the UK (Accountants for example), others need to be based in or close to your "investment location", e.g. Builders.

I chose Accountants because tax law is still common UK wide, whereas different property law applies in Scotland and “Builders”, because even if you buy a new build there will still be a limited amount of work to do before the first let, decorating, fixing curtain tracking, shelving etc plus ongoing maintenance so all Power Teams need a builder.

And so, an early, if not your first decision is "Where" and there are many factors which will influence that decision.

One of the first is Cash. Are you going to borrow to buy to let? Even though you are cash-rich, regardless of how cash-rich you are, if you decide to borrow you will be able to invest in more expensive locations and/or buy more properties.

Borrowing will accelerate the growth of your portfolio in both number of properties & value terms, and the more you borrow, as a percentage of the cost of the property, the faster you can grow your portfolio and the wealthier you will become. But, the more you borrow, the greater the risk if things go pear shaped.

LANDLORD INVESTOR April 2015

EXPERT ADVICE

34

Take a £50,000 cash pot, and ignore the buy & tidy up costs for the moment. £50,000 buys £100,000 at 50% LTV (loan to value), a loan, broadly speaking, available to all investors with good credit history. At 75% LTV, £50,000 buys £200,000 again, generally available. Same sum, 50K, buys £250,000 at 80% LTV, and a £ 335k property/portfolio at 85% LTV, a huge difference in potential values, which are the result of “leveraging", a major factor in achieving buy to let success.

Generally speaking, properties which are above the average cost of the location produce lower returns.

So a £100,000 3 bed family home (terraced/semi) would generate a higher annual net income, in percentage terms, than a similar 3 bed property costing 335K in the same location (within 1 mile).

Are you say, the answer is obvious, buy 3 properties at £100k (85% LTV & max return). That needs three 15k deposits (45k) out of your 50k cash pot, leaving 5k to cover the cost of buying & tidying up, sorry but now we have to bring that cost into play and it’s not enough, whereas 5k would probably buy you a 300k property with money left over to pay for a refresh.

And until you have decided on your investment location you cannot start recruiting the local members of your power team and until you have them on-board you can’t start buying because they have a load of local due diligence knowledge vital to your success.

The national power team members, by comparison, are easy.

Unfortunately, you don’t know what you don’t know, and, you don’t know what you need to know, and that’s the same for most, if not all, of us in any new venture. That’s why Education & Training is so important, before making these sometimes “set in stone” decisions.

Buy 300k of property, get it wrong, decide to get out (sell) and it could take months, buy 300k in shares before midday, get it wrong, decide to get out and you can be gone by 1pm, cash back in the bank.

Another aspect in your “where” decision is your customer. Who do you want as your customer? Who are you going to house because each category of tenant has different demands which are often incompatible.

Two examples: students & family housing, young singles & the elderly.

April 2015

LANDLORD INVESTOR

Students and young singles probably are compatible but young families and the elderly less so. Professional sharers, IT contractors, both want a very different environment and property type to live in.

Having decided on your ideal customer, what do you need in your investment location to make it so attractive that your customer, young single, student, family, IT contractor, is going to want to stay there, not just for a year or so, but for 10, 15 or even 20 years. What criteria do you rely on in making that decision. Your 1st year student will leave but you want another 1st year student queuing up to take their place.

So how do you find your way through this minefield and make sure that your entry into the property investment world was/is a very good decision, that you fully understand the risks and how to mitigate them, providing you with a high value, inflation proof, safe, alternative pension?

Through Property Investor Online.

1. Go online with PIO, view the media and decide on a Strategy that appeals. It helps to "like" what you are going to invest in.

2. Buy A “Foundation” or “Basics” Course. This course should include the basics of a number of different strategies and ideally be completed before you finally decide on your strategy.

a.

PIO offers a high quality, in depth “Foundation Course”, completed by 1,000’s of students and now available online with online mentoring/support.

3. Buy one, possibly two complimentary niche trainings, “fit for your purpose” (your strategy), that you understand, identify with, will enjoy and will deliver your aims & objectives. PIO can even assist you in making this choice because we know the expert niche trainers. ⌂ Next month I will be looking at other criteria that play a part in helping you decide on your investment location, starting with affordability based on your cash pot.

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both pri n

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advertising • branding • brochures • design for print flyers • leaflets • pop-up stands • roller banners stationery • web design

for all enquiries about design work, print or digital email craig@landlordinvestmentshow.co.uk

LANDLORD INVESTOR April 2015

Property Values Set to Rise in Liverpool I saw an interesting article this week in the ‘Liverpool Echo’ endorsing my feeling regarding the investment opportunities in this city. Alan Bevan, Head of City Residential in Liverpool, speaking at the property and investment expo in Cannes believes Investors will have a positive impact on property values in Liverpool City Centre and prices may soar over the next few years. He feels Liverpool’s property prices are hugely undervalued compared to other cities in the UK. He believes a number of fundamentals are in place to support his view, among them is the fact the rental returns are very attractive which will draw Investors and there is an expected population boom in the city centre over the next 5 years which will push up both the demand and rents.

He anticipates 50,000 people living in the city centre by 2019 which is a fivefold increase since 2000.

I have decided to comment on this article as it confirms the positive outlook CXG have with regard to investing in Liverpool and quotes many statistics that the canny Investor will find both informative and interesting.

We have already taken Investors to development sites in Liverpool including Sefton Park Studios which is an exclusive off market opportunity for CXG clients, and as I am sure many of you are aware, Sefton Park is an exclusive area in Liverpool just 15 minutes from the City Centre. Sefton Park is a conservation area and the development overlooks the park itself which is 235 acres of historic parks and gardens, where many events are held including summertime music and food festivals. The designer of Sefton Park also designed Central Park in New York and therefore could not be a better location.

We have already taken investors to see Sefton Park Studios and the feedback is positive. We are arranging a number of further visits to the city over the next 12 months and the first of these will be on the 8th/9th May. Should you wish to accompany us please do not hesitate to contact us via email - invest@cxggroup.co.uk – to arrange.

Your property investment partner

At CXG Invest we are dedicated to advising our clients on all aspects of property investment. We provide a unique service using our extensive developer and industry contacts to secure the best property investment opportunities for our clients. We have access to deals that high street estate agents cannot offer. We target and develop niche and up-and- coming markets and secure deals giving landlords returns ranging from between 7%-12%; such yields provide high cash flowing portfolios for our clients. We believe the properties we have access to are amongst the best available, they are often off-market and exclusive to CXG.

y e l l i P n i b Ro

Founder & Chairman of the CXG Group

01440 712216 invest@cxggroup.co.uk www.cxginvest.co.uk

Assured NET Yield of 8% for 2 years!

Sefton Park Studios, Liverpool

ÂŁ59,950

Prime University Location Complete Armchair Investment For more information please go to

www.cxginvest.co.uk/sefton-park-liverpool

38

EXPERT ADVICE

LEGIONELLA RISK ASSESSMENT: STILL UNDERSTOOD BY FEW LANDLORDS Mel Dellow LRA Solutions L R A Solutions exhibited at The Landlord and Investment show in Colchester, Essex, on Thursday 5th March 2015. Mel Dellow, a director of LRA Solutions, said it was a fabulous day attended by energetic property professionals from across the spectrum.

I UNDERSTAND THAT THIS IS A LEGAL REQUIREMENT BUT DO ALL PROPERTIES NEED ONE INCLUDING NEW BUILD?

MEL SAYS: As we suspected, it confirmed to us that many property professionals still have little or no knowledge about the law surrounding legionella risk assessments in domestic property and the obligations for landlords and their advisors.�

Mel has kindly answered some questions from Steve Hanbury, in his position as a residential property Landlord and director of the Landlord & investment show, that centre around the ongoing debate over legionella risk assessments on residential properties.

WHEN DID THE CHANGES TO THE HSE ACOP L8 CHANGE? The changes which came into play in November 2013 were intended as a clarification by the HSE to the existing obligations of residential property landlords to risk assess their properties for legionella, because it was clear that few landlords or their advisors understood their obligations.

April 2015

LANDLORD INVESTOR

Yes, all domestic systems require an assessment, although many plumbers believe that this is not required where combination boilers are installed, but cases have been found in all types of property systems including those involving combi boilers. It may be less likely in newer properties, but if it arises and a Landlord has not had an adequate risk assessment undertaken they risk criminal prosecution nevertheless.

ONCE THE ASSESSMENT HAS BEEN CARRIED OUT AM I COVERED BY THE LAW IF SOMEONE CONTRACTS LEGIONELLA AND BECOMES SICK OR DIES WHILST LIVING IN MY PROPERTY?�

Not necessarily. The risk assessment is the first step to compliance and it is vital that this is carried out by someone who is fully competent. In addition, as a part of the HSE regulations you must be seen to carry out a maintenance regime as part of your continuing obligation to manage the risk. This can be easily organised, by you as landlord or with your managing agent, as a part of an assessment programme and this should be should be covered in all tenancy agreements. Your tenant should also understand

39

what the risks and obligations are and be informed.

A professional company will be able to help you organise this in accordance with the ACoP L8.

I suggest you check that the assessor can demonstrate a level of expertise, experience and training which goes beyond a short course and some basic knowledge. They must show proof of satisfactory professional insurance and Health and Safety training and certification. It may only be when something goes wrong that you will be relieved you had a professional person, with full backup, dealing with your legionella assessment. Many assessors do not hold Health and Safety certificates, have not had small space training and have not correctly informed their insurers of their activities. In addition, they won’t provide and maintain the record keeping that is a landlord’s first line of defence to evidence compliance, and they are unlikely to be credible witnesses in the event of a prosecution – and this is the ultimate protection that a landlord is buying from a professional risk assessment

HOW DO I KNOW WHAT IS A FAIR PRICE TO PAY PER ASSESSMENT? I have seen companies charging from as little as £85 to as much as £300. Honestly, as long as you have checked the assessor has the knowledge experience & insurance cover to meet with the ACoP L8 and can demonstrate this in a court of law to protect themselves and the landlord then it is a personal choice.

It will depend on the size of the property and the amount of water outlets, some companies charge a flat price on bulk assessments, some price tag it on the number of bedrooms for simplicity when selling the service. The adage “you get what you pay for” is probably sound advice and the best way forward once you have carried out your due diligence.

DO I NEED A SCHEMATIC DIAGRAM WITHIN THE ORIGINAL ASSESSMENT? Not usually. The assessment would only need one if there is a relatively large or complex system and this would need to be prepared to scale with the correct programmes so it is only worth doing if done properly.

This law is still new to many in the industry with confused advice being given to Landlords and little clear guidance from property leaders in the market place. The ACoP L8 comes with no definitive direction to property owners or Managing Agents of what landlords and tenants need to do, and who can do it. Worryingly it seems that only when something goes wrong, a tenant or visitor becomes seriously ill or dies, and people are exposed to heavy fines or worse still imprisonment, will the world of residential lettings really sit up and take notice of this. We also fear that many of those offering themselves up as assessors will find themselves, and the agents and landlords who used them, in difficulty because they did not have the right knowledge and qualifications to carry the assessments competently and even more crucially to maintain ongoing procedures to manage risk.

When landlords see advice telling them ‘anyone can carry out a simple assessment if they are competent’, it could be very misleading because this advice doesn’t go on to give any guidance as to what ‘competent’ means in this context.

You may not be an expert in water systems management but if you are the Responsible Person or Duty of Care Holder (being the owner or operator of a water system) you cannot delegate your responsibilities under L8.

Assessors should be aware they could to be at risk of a law suit against them personally if they are not adequately prepared experienced, knowledgeable, and trained with the correct insurance cover to carry out a risk assessment specifically for Legionella.”

LRA Solutions is a team of experienced property and water management experts dedicated to the delivery of legionella risk assessments for private and public sector landlords to ensure that you can demonstrate full compliance with the HSE’s ACoP L8.

Our team has the depth and breadth of qualification and experience to satisfy the standards you should require of your assessor and comply with the Legionella Control Association Code of Conduct www.legionellacontrol.org.uk and the British Standards Institute Standard for Legionella Risk Assessment. ⌂ www.lrasolutions.co.uk

LANDLORD INVESTOR April 2015

EXPERT ADVICE

WHAT QUESTIONS SHOULD I ASK TO ENSURE THE COMPANY WHO OFFERS A PROFESSIONAL SERVICE?

IN SUMMARY, MEL SAYS:

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INVESTMENT

THE SECRET TO CREATING WEALTH THROUGH PROPERTY Peter Licourinos Prospect Investors Club It’s no secret that property is one of the most lucrative avenues to invest in, but how simple is it to truly become wealthy through property?

PROSPECT INVESTORS CLUB IS ONE OF THE UK'S AND CERTAINLY BERKSHIRE'S ONLY DEDICATED INVESTMENT CLUB, COMPLETELY RUN

BY PROPERTY PROFESSIONALS WITHIN AN ESTATE AGENCY GROUP. Peter Licourinos, Owner Director, Mentor and successful Investor himself, talks with us about becoming wealthy through property investment, the goldmine areas, their monthly Property Investors Network (PIN) meetings and the long awaited launch of their new website.

April 2015

LANDLORD INVESTOR

SO PETER, IS IT TRUE THAT PROPERTY INVESTMENT IS AN EASY ROUTE TO BECOMING WEALTHY? Yes, it is! Property investment is easy – IF you seek the correct advice. Many believe that you can buy a property and just watch the money roll in, unfortunately, it’s not quite that simple. There are many things to consider when investing in property.

Finding an area and a strategy that suits your aims is important, keeping up with the changes in the property market, trends and evolving strategies is imperative.

WHAT ADVICE WOULD YOU GIVE TO A NEW INVESTOR? I would recommend you always take your time and seek advice from professionals before investing in a property. This is to enable you to find a strategy that suits you and helps you understand what the local market, schools, unemployment rates, transport links and above all, demand, is in that area.

Often people are uncomfortable seeking advice and that can lead to investing in the wrong property or area. Not to mention costing lots of money!

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INVESTMENT

YOU MENTION INVESTING IN THE RIGHT AREA A LOT, IS AREA THAT IMPORTANT? Area is one of the most important things to consider before investing. Many people used to use sourcing agents to find them properties from all across the UK. Since the crash in 2008, many Investors have stayed closer to home, which we feel is the best option. Investing closer to home enables you to view any properties before purchasing, do your own due diligence with local agents as well as keeping a close eye on demand, unemployment rates and schooling.

Asides all of this, we are lucky enough to live within the top ‘Goldmine Areas’ in the UK – so why would you invest anywhere else?

GOLDMINE AREAS? TELL ME MORE! In and around Berkshire there are some really great areas to invest in. With high yields, continuous demand and excellent transport links these areas offer such lucrative returns, we’ve named them our local ‘Goldmine Areas’.

Areas such as Reading, Bracknell and Maidenhead have so many attributes that they have unquestionable Goldmine status; they offer a high return on investment as well as the option to use a variety of strategies and tenant demand increases daily with the new Cross Rail developments.

I'M NOT PARTICULARLY "CASH RICH", CAN I STILL INVEST?

YOU SAY THE INVESTORS CLUB IS THE SECRET TO CREATING WEALTH THROUGH PROPERTY. CAN YOU TELL ME YOUR SECRET? I’d love too! You can join me at our monthly PIN Meetings on the first Tuesday of every month at The Holiday Inn, Basingstoke Road, Reading and I’ll be happy to disclose the secrets! You can also arrange a private one2one meeting, free of charge, where I’ll not only tell you the secrets, I will work with you to find the right strategy, find you a property (or several!) and really help you on your way to becoming wealthy through property.

WHAT CAN ATTENDEES EXPECT AT THE PIN MEETING, EXCEPT FOR YOUR SECRETS OF COURSE! We believe one of the best ways for you to become more successful is to surround yourself with like-minded successful people, from whom you can both learn and be inspired by.

That’s why we teamed up with Simon Zutshi and his Property Investors Network (PIN) team to create Reading’s biggest and best property networking event. Each meeting brings together some of the top speakers, trainers and investors throughout the UK, gives you great insights of the local Goldmine Areas, including case studies on various strategies with figures and yields, current market trends, new and upcoming legislations, lettings and investment updates, financial updates and of course the chance to network with other local investors… Plus much, much more!

Yes you can! Most money makers and Property Investors, believe it or not, started with little or no money at all! So it goes to show, making money isn’t just a dream, it’s a reality which is available to everyone.

LANDLORD INVESTOR April 2015

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WOW, SOUNDS ACTION PACKED!

INVESTMENT

It is! The property market is ever changing so we try to ensure we cover as much as possible in every meeting. Every day is a school day!

OKAY, SO IS THERE ANYTHING YOU CAN TELL ME TODAY? Yes, visit us online! We have just launched our new website www.prospectinvestorsclub.co.uk which keeps you up-to-date with property news, legislation trends of both national and local councils, insights into different strategies we are successfully using, detailed information on the local goldmine areas, top tips and so much more. It really is a onestop-shop for everything you’ll need when investing in property, and it’s free to join!

We provide you with our Power Team to assist you every step of the way and we have carefully handpicked and build ours over the past 10 years with the very best in Agency’s knowledge and experience, goldmine managers, lettings and property managers at your disposal, wealth managers, creative financial experts, solicitors, land and new home experts, sourcing team and so much more.

IS THERE ANYTHING ELSE YOU'D LIKE TO TELL US? Just don’t be scared to seek advice! We don’t bite and actually, once an investor joins our community they are part of our property family! After-all successful investors will be working with us for many years to come.

OH, SO I CAN SEE EVERYTHING ONLINE?

FINAL WORD

Not everything! Our website is jam packed full of information, data, resources and certainly gives an insight in to what we do. As I mentioned earlier, it’s quite a simple formula, but it needs explaining in context. Plus you don’t get unrestrained access to our Power Team online!

Well it’s clear after speaking with Peter that Property Investment is a sure fire way to becoming wealthy but how, it looks like we’ll find out at his next PIN Meeting on 5th May!

If you are interested in becoming wealthy through property, then I recommend coming in and having an informal, confidential chat about your goals and aspirations. Together, we can tailor make you a plan and work together to ensure you achieve them.

Join Peter at the next Reading PIN Meeting to find out the secret to creating wealth through property, listen to some amazing guest speakers including Daniel Hill, Young Entrepreneur of the Year 2013 and pick his brain for yourself. Book your place now by visiting www.readingpin.co.uk

POWER TEAM!?

One of the most important aspects of property investing is having a trustworthy, loyal and well positioned as well as priced Power Team that understand property investing with experience themselves.

IF YOU'D LIKE TO MEET WITH PETER ON A ONE2ONE BASIS, THEN EMAIL PETER TODAY AT PETER@PROSPECTINVESTORSCLUB.CO.UK OR CALL 0118 955 9712.

April 2015

LANDLORD INVESTOR

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The one-stop shop for all your property needs. You can rely on us for any of the following services: Tenancy Cleaning Oven Cleaning Carpet & Upholstery Cleaning

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LANDLORD INVESTOR April 2015

FINANCIAL

INTEGRITY

We believe successful relationships are built on trust.

Our business is built on the foundation of personal relationships, with a commitment to sustainability and transparency that has delivered over £1bn in lending to property professionals, investors and SMEs. Shawbrook helps property professionals succeed: •

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ANY PROPERTY USED AS SECURITY, INCLUDING YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT