LANDLORD INVESTOR
WRITTEN BY INDUSTRY EXPERTS COVERING ALL ASPECTS OF BUY-TO-LET
LANDLORD | PROPERTY | INVESTMENT
58TH EDITION | 2020
LANDLORD SURVIVAL GUIDE VI
IN THIS ISSUE... Getting back to basics: top five finance tips for landlords
Landlord Insurance – impact of Covid-19
Three simple tips to renting your property fast
Most asked questions by portfolio landlords
What will be my property tactics be in the post-Covid property market?
Impacts and ways out of the Covid-19 crisis
75 THANKS AND
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A warm welcome to the 58 Edition of Landlord Investor Magazine, and the Sixth Landlord Survival Guide. TH
Welcome to the Sixth edition of LI Magazine Landlord Survival
IN THIS ISSUE...
Guide. This week's issue has more superb content, which we hope you find helpful. With each issue our audience grows and the response to our Survival Guide and Online Seminars remains positive. Again we
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Landlord Insurance – impact of Covid-19
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What will be my property tactics be in the postCovid property market?
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Three simple tips to renting your property fast
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Most asked questions by portfolio landlords (Part 2)
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Getting back to basics: top five finance tips for landlords
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Impacts and ways out of the Covid-19 crisis
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Reach 20,000 viewers per month
hope its reassuring to hear a positive voice during this uncertain and troubling time. Some may see no communication as the best strategy, but we see ourselves as a beacon for information for the BTL community, and as such have a responsibility to keep you informed as information and opinion comes into us. Our Online Seminars feature some great content too, visit the dedicated section of our website www.landlordinvestmentshow. co.uk/online-seminars to find out more. The service is completely FREE and we'll be updating constantly over the coming weeks. With regard to our shows calendar, we remain optimistic and are working on a revised show schedule. We'd also like to hear what Landlords have to say regarding their challenges / concerns during the Covid-19 crisis. If you're a landlord and wish to write a 400 word article detailing your specific challenges the please get in touch. Furthermore, we'd like to know what you may be doing differently, and anything else you have to say about the subject, so we can really understand how it impacts the plight of the private rental landlord. Please email your submissions to landlordguide@landlordinvestmentshow.co.uk and we may publish your article in the coming weeks. You can find digital copies of all back issues at www.landlordinvestmentshow. co.uk/li-magazine and if you have questions for any of our guest columnists then please do not hesitate to get in touch via our dedicated email: help@landlordinvestentshow.co.uk As we say here at isolated LIS Towers: 'it's a tight ship and we all have to row together'. On that note, enjoy reading this issue of our Landlord Survival Guide. Stay Safe. Keep Well. TH
LANDLORD INVESTOR MAGAZINE
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LANDLORD SURVIVAL GUIDE VI
STEVE COX ALAN BOSWELL GROUP
Landlord Insurance – impact of Covid-19
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LANDLORD SURVIVAL GUIDE VI
The disruption caused by the COVID-19 pandemic on businesses has been nothing short of phenomenal and never been seen before.
We spoke with Steve Cox, specialist in Property Owners Insurance at Alan Boswell Insurance Brokers, on the impact of COVID-19 on Landlord & Property Owners Insurance to consider the ramifications to the sector. Buildings & Liability Insurance “Standard Buildings Insurance is absolutely unaffected by the virus. So, this is one area where things need to stay as they are. Rebuild values remain the same and, as such, so will your premium and claims process. “Property Owners Liability insurance also remains unaffected and provides cover for costs and damages awarded to a member of the public if they suffer an injury following an accident on, or linked to, your premises. The risks remain, so cover should remain in place to protect you.” Unoccupancy insurance “Standard landlord’s insurance will include some form of unoccupancy cover, and this period differs depending on the insurance company involved. It is designed to maintain your protection during any periods of unoccupancy, such as between lets, when risks tend to increase. They increase because there isn’t someone inhabiting the building day-to-day and therefore could expose the property to higher risk of squatters, vandalism or damage caused by escape of water. “But the pandemic is seeing an increase in unoccupancy and an increase in the amount of time a building is left vacant. “Some insurers have relaxed the criteria and increased the unoccupancy period up to 90 days, but others haven’t. It’s really important, therefore, that you check with your insurers or brokers the details of your policy and consider purchasing a
LANDLORD INVESTOR 58TH EDITION
standalone unoccupied policy to give you the extended cover. “Either way, if you do have an empty property it is crucially important that you inspect it regularly. Insurers insist on this and while, again, some have relaxed the criteria it makes sense to complete regular checks.” Tenant defaults “The Government have made it clear that no tenant can be evicted within the three month period stated on 18th March. Similarly to the extension to the furlough scheme there is a chance this could be extended. While it may be troubling for landlords to have tenant defaults these are unprecedented times and the only solution is to be prepared for it. “Clearly tenants should be applying for benefits if they have lost their job and a good landlord will be armed with the appropriate information to pass on to their tenants. But if, for any reason a tenant is just trying to use the pandemic to avoid paying it would be sensible to add some level of additional support and consider Legal Expenses insurance to help with any legal costs accrued as a result of action needing to be taken.”
Due diligence “While it may seem obvious to say that you should have your house in order when it comes to due diligence, now is the time to recheck and be absolutely sure you have everything in place. “Ensure that tenant referencing is undertaken and guarantors are in place for all your tenants. Make sure you have the appropriate license if you have an HMO [House of multiple occupancy] and evaluate whether you’re best placed to have one tenancy agreement in place or individual agreements in any form of houseshare. “Finally, consider Property Emergency insurance. Everyone is working from home and so there has been a huge increase in the demand on electrics, plumbing and drainage. Now is not the time for a big bill to fix a faulty boiler.” Getting advice If you feel you may benefit from some extra advice on any aspect of landlord’s insurance please call Alan Boswell’s landlords team on 01603 216399 or email landlordenquiries@ alanboswell.com
While it may be troubling for landlords to have tenant defaults these are unprecedented times and the only solution is to be prepared for it.
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LANDLORD SURVIVAL GUIDE VI
JOHN HOWARD JOHN HOWARD PROPERTY CONSULTANTS
What will be my property tactics be in the post-Covid property market?
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LANDLORD SURVIVAL GUIDE VI
No one really knows what is going happen to the Investment or Development Market over the next 18 months. However we can all have an opinion.
Having survived three property recessions in the past the first thing is to mention is that we don’t know whether this will be a property recession or not. The circumstances surrounding it are very different, we’ve had a market that is literally been suspended for weeks and nothing like this has ever happened before. However one of the main barometers I believe in the property market is employment and we have to assume that many jobs will be lost over the coming months. How quickly people will find new employment is clearly be the key to the extent and length of any property downturn. So while we are all waiting and holding our breath wanting to know what will happen to the market there is little point in taking any silly risks in terms of acquisitions. However that doesn’t mean you should not look and see whether or not there are any bargains out there that fits your criteria. For me personally I want to be relatively fleet of foot in other words I don’t want to get into developing any large developments whilst not knowing what the market might be like in 2 to 3 years time , when those developments are completed and ready to sell. So the first place that I will be looking for deals will be in auctions because auctions is where we will likely see the first bargains. What happens in auctions happens to the rest of the property market, it just takes longer to happen. So when the property market starts to decline its seen more rapidly in the auction world and when it starts to
LANDLORD INVESTOR 58TH EDITION
pick up auctions are the first place you will see the market return. I’m going to be on the lookout for part completed projects that I can quickly finish, residential portfolios that I can break up and resell with income coming in the meantime to cover my interest. In other words properties that I can turn around quickly and get back on the market in case the market declines. I don’t want to be holding stock for the medium term if the market is declining. For those of you who are looking to purchase for the long-term Buy to Let type investments I would be fairly relaxed Even if the properties go down over the next few years, history tells us that they will recover and go beyond their current prices over 15 to 20 year property cycle.
The first place that I will be looking for deals will be in auctions because auctions is where we will likely see the first bargains.
Combine that with the fact that hopefully you will be on a repayment mortgage so that after 20 or 25 years the mortgage is paid off and that there is still a massive shortage of housing stock currently especially in the south of the UK . So that should give any long-term Property Investor the confidence to purchase if they can see real value for money in the market going forward where they can buy and let at higher yields than they have managed to do in the past. Whatever your strategy and tactics are in the coming months please also remember that the Banks are likely to be lending you less loan to value than they have been in the past This again is likely to have an negative affect on the Investment and Development Market.
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LANDLORD SURVIVAL GUIDE VI
Three simple tips to renting your property fast { Even during Covid-19 }
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LANDLORD INVESTOR 58TH EDITION
LANDLORD SURVIVAL GUIDE VI
If you're struggling to find a tenant, here are three “instant” tips to fill your listing.
The COVID-19 pandemic has impacted the real estate industry significantly. Many workers have been made redundant which has affected landlords trying to rent their vacant listings. In response, landlords are changing their marketing strategies to try and attract more potential renters. If you’re having trouble renting your listing, here are three quick tips to present your property in the best light when advertising. Tip 1 – Use Professional Imagery To Market Your Listing
need to do is send them a 360° image of each room and they will build you a virtual tour to showcase your property. To take a 360° photo, you’ll need a 360° camera or a smartphone with the Google Street View app.
the layout of your property to envision how their furniture is going to fit and whether the space is going to suit them. If you’re wanting to attract more renters to your listing, BoxBrownie.com can transform a plain floor plan into a beautiful one from only £18.
Tip 3 – Include A Professional Floor Plan
Free Trial Available
One major study concluded that floor plans are the third most useful feature your clients want to see (after photos and description). Renters want to see
If you’re wanting to transform your imagery for your listing, you can try BoxBrownie.com for free! Simply sign up here to claim your 4 free photo edits.
If you’re wanting to rent your property out quickly, you’ll need professional imagery to showcase your property at its best. Luckily, you don’t need a professional DSLR camera (or even a photographer) to achieve this! Many late-model smartphones (such as the iPhone 11 or Samsung Galaxy S10) have a wide-angle lens which is perfect for real estate photography. Once you’ve taken your photos, you can easily have your images edited professionally by BoxBrownie.com’s services. Starting at only £1.20, their “Image Enhancement” service will transform an average-looking photo into a stunning one that sells.
BEFORE
Tip 2 – Create A 360° Virtual Tour Of Your Property A 360° Virtual Tour is a relatively new technology that allows your property to be walked through online. With the current restrictions in place, it’s a great alternative to renters who are unwilling or unable to visit a property. BoxBrownie.com offers 360° Virtual Tours starting from only £12. All you
LANDLORD INVESTOR 58TH EDITION
If you’re wanting to rent your property out quickly, you’ll need professional imagery to showcase your property at its best.
AFTER
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LANDLORD SURVIVAL GUIDE VI
CHRIS BAILEY GROUP DIRECTOR LESS TAX 4 LANDLORDS
Most asked questions by portfolio landlords { PART TWO {
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LANDLORD INVESTOR 58TH EDITION
LANDLORD SURVIVAL GUIDE VI
With signs of lockdown fatigue setting in and people eager to get back to a new version of ‘normality’, it is not surprising that Landlords all over the country are turning their thoughts to property and Estate Planning.
In this 2nd part of our ‘most asked questions by portfolio landlords’ our team of qualified experts from all areas of our business provide the answers to questions that are troubling landlords during this difficult time of uncertainty. Q. I want to update my Will but not sure how I go about this, especially getting it witnessed? If you are trying to make or amend your Will during COVID 19 then Section 9 of the Wills Act 1837 is causing the most confusion. It says that for a Will to be valid 'the signature is made or acknowledged by the testator in the presence of two or more witnesses present at the time'. Interestingly wills can be signed and witnessed remotely e.g. through Skype or video conferencing in Scotland, however the consensus appears to be that this is not possible in England and Wales. Witnessing through windows or in an open area while observing the recommended social distancing will be enough to meet S9 requirements. Q. I have an empty property and a prospective tenant who could move themselves in. Is it ok to go ahead? The current guidelines say that moving house “where reasonably necessary” during the emergency period is permitted under section 6(2) of The Health Protection (Coronavirus, Restrictions) (England) Regulations 2020. Home buyers and renters should, as far as possible, delay moving to a new home whilst emergency measures are in place but if moving is unavoidable for contractual reasons then people must follow advice on maintaining strict separation to minimise the spread of the virus. Without understanding your potential tenants’ situation it is difficult to say, but if your tenant needs a home, is willing to move themselves with no need for removal firms or contact with others and you both believe it is 'reasonably necessary' then there is no reason why he cannot move in.
LANDLORD INVESTOR 58TH EDITION
Q. A working tenant who says she has the coronavirus and needs treatment does a runner (I have a £1,000 deposit which I hold via My Deposits) and then emails me to say she has left. I get this email 12 days before her next rent (£1,300) is due. After which there are still 7 months of our Assured Shorthold Tenancy agreement left. She has left the flat in a poor state, including extra furniture, her own extra mattress, etc, which we cannot get rid of as the local authority has stopped collecting bulky residential waste due to the pandemic. Do you think I have a case for saying the flat is uninhabitable to the local authority and should therefore be exempt from council tax until we can clean it and make it ready for occupancy? You should certainly ask for an exemption from council tax from your the local authority. You should contact the council tax department and state that a tenant who has said that she is suffering from coronavirus has left the flat in an uninhabitable condition and that you need their environmental health department to assist you in making the accommodation fit for habitation.
You should copy the environmental health department into this email and you may also want to contact public health professionals on 111 to seek advice and act upon it. In relation to the council tax issue if you can show that the flat is unfit to occupy with evidence supporting this, you should get the desired council tax reduction. Q. For new applicants, is Housing Benefit now included in all Universal Credit claims? Universal Credit is an application made online on the government portal. It is separate to Housing Benefit which is administered by local authorities. So, the Housing Benefit application must be completed online but using the online portal of the local authority where your properties are situated, (i.e. the local authority you or your tenants pay council tax to for the particular property). For more information on how we can help you run a professional property business please visit our website and subscribe to our updates at lesstaxforlandlords.co.uk/subscribe.
Home buyers and renters should, as far as possible, delay moving to a new home whilst emergency measures are in place but if moving is unavoidable for contractual reasons then people must follow advice on maintaining strict separation to minimise the spread of the virus.
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LANDLORD SURVIVAL GUIDE VI
MICHAEL WILLIAMS PARTNER, JOHN CHARCOL MORTGAGE BROKERS
Getting back to basics: top five finance tips for landlords
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LANDLORD INVESTOR 58TH EDITION
LANDLORD SURVIVAL GUIDE VI
Being a landlord can be an exciting and rewarding venture. However, you will need to be fully versed on the expense the process can carry when purchasing a new investment property so ensure you do your homework and set out your budget to make sure your finances are in place.
Let’s look at some top-tips landlords may need to consider when looking at the mortgage finance of the buy to let market: 1. The first item to consider is the deposit. Traditionally 25% is the benchmark and the minimum a mortgage lender will want you to put in, however, 20% is becoming more common in the market. Naturally, the more deposit you put into the purchase, the better rate you are going to get. This means a better monthly rental income for your investment. Rates are historically low, we are seeing a very competitive market in both the residential and buy-to-let offerings from mainstream and nonmainstream lenders. 2. The monthly rental income the subject property can achieve is key. This figure is assessed by way of a ‘stress test’ which all lenders will take you through to assess how much you can borrow. Stress testing is generally more favourable on medium term five-year products. This means you are likely to obtain a higher lending figure if you opt for a five-year rate as opposed to a shorter-term rate over two years. A mortgage broker will talk you through the difference options lenders will present and make it work for your budget. 3. It is fundamental that you seek tax advice before taking the plunge into the buy-to-let world. It is always good practice to sit down with an accountant or tax advisor to go through your plans and the options available to you. We are seeing more and more transactions going through the limited company route which
LANDLORD INVESTOR 58TH EDITION
can offer cost-effective tax planning for your circumstances as opposed to purchasing in an individual name, especially if you intend on building a property portfolio upwards of three / four properties.
Remember to consider the most cost effective option over the term so you are getting the best value for money and seek professional advice from a whole of the market mortgage broker before committing to a product.
4. It is extremely important to consider the Stamp Duty Land Tax that is going to be levied against your buy-to-let property purchase. As mentioned in my introduction, one of the more costly elements to getting involved in the property investment world is Stamp Duty. If you are purchasing a buy-to-let property, there is an additional 3% so ensure you factor this into your budget.
The property investment world can be very lucrative if you find properties that are good investments, this can be for additional income to boost your own earnings or for longer term investments such as pensions and financial planning. There is no doubt being a landlord can give you good earning potential, good luck and do get in touch if you need any advice or support. Thank you.
5. When considering your mortgage rate, do not be blinded by headline rates or amazing ‘cashback’ offers.
Michael Williams John Charcol Mortgage Brokers www.charcol.co.uk
When considering your mortgage rate, do not be blinded by headline rates or amazing ‘cashback’ offers.
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LANDLORD SURVIVAL GUIDE VI
SENAKE ATURELIYA CEO, XCAVATE ROBOTICS
Impacts and ways out of the Covid-19 crisis
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LANDLORD SURVIVAL GUIDE VI
Xcavate Robotics are a technology start up bridging the property and technology sectors.
Whilst the impact of COVID-19 on larger investor funded proptech companies like AirBNB has been widely covered in the press, little minnows like ourselves have been impacted in entirely different ways. As an early stage start up in the hardware space, it’s second nature for us to struggle and innovate everyday just to survive. This has stood us in good stead and I would say that – strangely – the cards seem to have fallen in our favour. Our offering seems to be far more aligned to helping people in a post COVID-19 world than the one that we have left behind. Coming out of the crisis, the views expressed in the media, in a plethora of webinars and by people with whom we have directly spoken all predict similar outcomes. Firstly, with businesses and jobs hit hard, many will face cash flow difficulties. Many people remain concerned and the need to maintain social distancing will encourage many off public transport onto bicycles and eBikes. Using investment raised last year, Xcavate Robotics have developed ultra efficient, patent pending robotics and building shell technology that dramatically reduces the build time, cost and disruption associated with creating subterranean space. Before the crisis, our main intention was to offer a service building under-garden apartments. By bringing down both
LANDLORD INVESTOR 58TH EDITION
build and land costs, we have the potential to help many urban house owners – occupiers and landlords – unlock much needed capital by selling off their under garden space. These can be turned into one bedroomed apartments at a cost that should be viable even in today’s depressed market. On the commercial property side, prior to the crisis, we were talking to local authorities about building eBike storage locations to help reduce
pollution – now it seems these will be in more demand than ever. When the virus hit, like everyone else we were severely impacted. Having launched a Crowdcube campaign to top up our round of investment, all of the interest died within a week. It’s slowly coming back and we’re looking forward to coming out of this crisis stronger and with the potential to help others. To find out more about opportunities, please visit www. xcavaterobotics.com.
With businesses and jobs hit hard, many will face cash flow difficulties. Many people remain concerned and the need to maintain social distancing will encourage many off public transport onto bicycles and eBikes.
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LANDLORD SURVIVAL GUIDE VI
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