Client Case Studies - Looking back at success

We took some time out to capture the kind of experiences our clients have had with their property investments, before and after they started their Midas journey. So here are just a few of our clients who were happy to share their experiences. We hope you find this useful. Liz Hodges, business owner and mum, 47, runs her own catering business in Topsham, and has for some time had a property portfolio. However, with growing demands on her time with children and her expanding business she realised that she was not able to manage all her properties as well. Midas Estates have been helping Liz manage her existing portfolio and expand it by adding a property in London. Liz sees this London property purely as an investment as all her others are close to home, and she looks after the tenants herself. Her long term plan is to continue to build the portfolio so that she has some security for her children in the future, and a nest egg for herself. As a business owner, Liz has used the income from her existing portfolio to help build and expand the business which now includes a café, bar, apartments and bicycle hire. Liz says “I had known about Midas for a long time, and when I realised that I need some help and support, they were the obvious choice. Their contacts and support have been invaluable, and the all inclusive package has meant that I have not had to worry about anything.” Malcolm Wilson, 47, is an Engineering and Management Consultant in the Rail Sector and would probably say that he fell into Property Investment by accident. By 1999, having moved jobs a couple of times and let out his previous house, Malcolm had accumulated a couple of rental properties. Realising that property could provide the passive income and financial freedom he desperately wanted, he and his wife Suzy had assembled a portfolio of five properties by 2005. Then he became stuck! The portfolio wasn’t yet large enough to provide a retirement income, and yet the repayment type bank loan already required extra cash every month. Adding more properties would simply mean more stress on the couple’s finances. Malcolm couldn’t see a way forward and felt like he was on a hamster wheel! In 2011, Malcolm and Suzy’s property experience turned a significant corner. Malcolm was introduced by chance to Midas Estates whom he quickly realised had knowledge and expertise that he was missing. Although sceptical by nature Malcolm probed the Midas team and became excited at the possibilities available from the existing portfolio given the right expert advice. The Midas team set to work, restructuring the existing portfolio, switching to interest-only mortgages and releasing equity as a deposit for three more properties. Midas showed Malcolm and Suzy how they could help them build the portfolio to provide a nest egg for retirement, without requiring constantly topping up with cash. Malcolm’s confidence in his investment portfolio grew, helping him to overcome his scepticism, and he quickly became happy to let Midas handle everything. Research into his and Suzy’s next purchases took into account vital factors such as location, amenities, demand for rental property, and confidence in good capital growth – exactly the priorities on Malcolm’s list, and freeing up time for Malcolm to concentrate on his day job. He realised his portfolio could be productive, low-stress and fun despite his having limited time and knowledge. Now Malcolm and Suzy have a portfolio of eight properties, including a show home, flats in Bristol, London and Newquay, and they have a solid retirement plan. The last 18 months have been a lot easier than the previous 17 years! Malcolm’s long term plan is to continue to build his portfolio, working closely with Midas who will monitor his investment and help him ensure that it continues to perform and build his retirement fund. Mike Anthony, a High Performance Player Development Manager for NZ Rugby and his wife Jane, a Marketing Manager currently based in New Zealand have been building their property portfolio since 2006. Mike says “We were living the UK at the time and looking for a good sound investment project that could be managed from overseas. A friend had been working with Midas and recommended we talk to them, he was very positive about their services. "We have now been working with Midas Estates since 2006 and have four properties in our portfolio. It is a secure investment but has been challenging with the economic decline a number of years back. That said things are gradually picking up so if you stay in for the long haul then returns can be good. “Midas helped us from the outset; giving us advice on purchasing, dealing with the developers and helping us arrange the mortgage. They introduced us to their lettings agency, and now manage our two UK properties in Winchcombe and Cardiff. We have another two properties in New Zealand. " We have found that the easiest thing is having one point of contact for our rental management, receiving regular updates and I'm pleased to say that our houses have always been rented out. The team is extremely helpful, and nothing is too much trouble. Being the other side of the world, it is important that we have peace of mind.” Mike and Jane plan to use their property investments to facilitate a change of lifestyle for their family. He says “We are in the process of consolidating things, having recently sold a piece of land in New Zealand, and we are selling one of our UK properties. We are looking to buy a reasonable sized piece of land and build a house in New Zealand in the not too distant future.” Sarah Rousselle, 35, is a solicitor and had saved through an ISA whilst living in England, before moving to Jersey in 2005. She realised that she had a lot of capital sitting in savings accounts and that this money wasn’t actually working for her, given the low interest rates currently paid on savings. Sarah had also contributed to a pension and made other investments but started to question this ‘accepted’ form of retirement planning when she considered the fees charged and her projected pension income. With a young family she wanted an alternative form of investment that she could pursue in addition to the more traditional approach, and looked for something that would offer her flexibility, as she did not want to tie her money up until retirement age. Sarah began researching alternative forms of investment for her money and read a book on property investment given to her by a family friend. This led to an introduction to Midas Estates, the property investment company. Managing a property portfolio needs time and experience, and following extensive discussions with Ian Clarke, MD of Midas, she realised that they would be able to help her through the process of not only buying a property and building a portfolio but managing it too. Sarah says “I had the money to invest and knew that it made sense to build up a buy-to-let portfolio in the UK, but I also knew that it would not really work if I tried to do this myself from Jersey. " I was concerned that I did not have the time or sufficient expertise, and it was clear that I needed guidance. When I spoke to Ian I knew he had plenty of experience and we discussed a long term plan to gradually built up a portfolio. He explained the need to maintain a buffer of money so that I didn’t overstretch myself. This reassured me, enabling me to take the plunge and buy my first property. "I look forward to the future and feel confident that, at some point, our family will have more options. As my husband is French, we may decide to go and live in France for a while. “Being offshore restricts us somewhat as many saving opportunities are only available to UK taxpayers. My employer does not have a pension scheme, and there is a very limited choice of personal pension schemes locally. In a low tax jurisdiction, the tax benefits of investing in a pension are also less clear cut. All of these reasons and the fact that property is a more tangible asset meant that investing in property was a sensible choice for me, and our family.” Sarah has now bought two flats in London, both of which were recommended to her by Midas Estates. She and her husband plan to continue building their portfolio working with Midas. Sara says “When you are busy working and raising a young family, it is vital to have a company that covers all aspects of the process, which is fairly time consuming and complicated. "Midas has been fantastic in holding my hand and ensuring that everything has gone smoothly. Ian and his team have sourced some great properties for me and have been extremely helpful and responsive, making sure that all the different parties involved – including developers, solicitors, letting agents, contractors - have been kept informed and that everything happens at the right time.” Ian Summers, 65, is a paramedic from Cheltenham and had spent some time researching what would be the best investment, not only to secure his future, but also to provide an income for his wife, who is younger than him, and also a step up the property ladder for his children. Ian decided upon property investment as he feels strongly that it is important to know where your money is, the value of your investment, and that it is accessible with no hidden extras. In the past five years, Ian has built up a portfolio of six properties, two in Cornwall, two in Cheltenham and a further two in Spain – one of which is being renovated and which he retires to in March. Ian says “The one thing I did find was that I needed help in researching and then managing my portfolio. The most difficult thing for me was to get a mortgage at my age, but Midas helped with all of this. I had tried to start the whole process by myself but found that I did not have the knowledge, contacts or expertise. “An important aspect of property Investment is finding the right property to invest in that will hold its own and produce an income. My investment portfolio has given me another five years of my life and financial freedom. Without it, I would surely have had to work for at least another five years.” Elizabeth Sama is a translator/interpreter in semi retirement and also works in online marketing. In August 2012, she attended a Midas Estates property school because she was looking for help with her existing property portfolio. Over a number of years her portfolio, mainly based in London had been managed by a number of estate agents, that had crippled her financially, so it was time to find a company that could offer a full service. Strong family beliefs in property investment led Elizabeth to start her portfolio. From a young age, she was given a small plot of land in the village she grew up in. Now her portfolio numbers five properties based in London, Bristol and Cheltenham. Elizabeth says “I met Midas, or more importantly Ian Clarke just at the right time. My existing portfolio was poorly managed and costing me too much money to run. Having had a consultation with Ian, I moved all my properties to Midas and the team got to work on sorting it all out. "Their work involved carrying out outstanding repairs, transferring or renegotiating tenancies with more transparency, collecting rents, and more importantly, paying the income into my account without spurious deductions". Midas now sends Elizabeth end of month accounts, which she simply forwards to her personal accountants for her tax return. Most importantly she now has some money in her bank account. Elizabeth says “I will always be involved in property investment and look forward to continuing to build my portfolio working alongside Midas. So much so that I have joined the Midas team as an Introducer as I feel very strongly that the advice that is being given by estate agents is so often incorrect.” Paul Bray, 41, is a workshop supervisor from Bristol. He and his wife Sarah decided that they wanted to move house and attended a Midas Property School to get some ideas. Midas suggested that Paul and Sarah kept their original house, rent it out and buy another property. Having not previously considered property investment they decided this was a great idea. Paul does not have a particularly good pension and is keen to build a nest egg for retirement and have something for their two children. Paul says ”When we decided to embark on this it was quite daunting. However, having a specialist company who could guide us through the process was invaluable. Midas helped us with the mortgages, solicitors and we made use of their whole team. With our investment in property we are on our way to financial freedom, something I had never thought was possible.” Paul now owns three properties in and around Bristol which include the house they now live in. He plans to continue building on his portfolio. If you have any property related questions then please do not hesitate to get in touch. No question is too trivial for us, and we'd be delighted to help you. Wishing you every success. Robin Robin Campbell (Director @ Midas) ....helping people profit from property and design a life of choice 0117 9117590 | 077 6660 6662 | Website | robin.campbell@midasestates.com Watch our Online Property School >

Property Investment UK - Capital Growth or Yield - What is YOUR Strategy?

With your financial appraisal complete and your mortgage offer issued, you will then be equipped to make a decision on your investment property. It's vital that we understand what you are looking to achieve first, so we structure your mortgage products accordingly and make sure we are looking for the right properties for your budget and game plan. For instance if you have a 10 year plan we could look for a strong rental income with focus on growth. If you are looking for an immediate income, then you might want to look at our Student Rental HMOs in Cardiff which pull in a huge monthly income. Lets take a look at some capital growth strategy properties first. These are past examples and are in line with our research criteria giving you a great return on your investment. Hayes - Highpoint Village Hayes Highpoint village stands to benefit from several growth indicators which offer investors attractive returns. Firstly, the location is set to benefit from being at the start of the £16bn 2018 Crossrail project. Just 6 minutes from Heathrow and 17 minutes from Paddington Station, this site beside the canal and the Hayes & Harlington Station offers everything we look for in an investment. The old EMI record factory is being re-developed as major multi-million town centre developments. These properties come with concierge service, gym, Jacuzzi and communal area. • Price for 1 bed studio - £145,000 • Rents £800 pcm (6.5% yield) • Parking worth £10,000 discounted from the purchase price. Stratford - Lett Road These one bedroom apartments on Lett Road, Stratford were perfect for investors because the site had a ready made growth story to buy into, with the Olympics being held in 2012 and the use of the stadium and local area guaranteed from an economic point of view. West Ham FC took the stadium and Westfield Shopping Centre, the largest in Europe brought 30,000 new jobs to the area. The image on the right hand side was taken from the rooftop of the property, and in the distance you can see the Olympic stadium. So this site fitted our research criteria of seeing a growth story emerging and where an unloved area is becoming loved, with lots of investment in the area for the long term. Here is how the numbers stacked up for this property. • Market Price from £235,000 • Negotiated Discount Price from £199,750 • Equity= £35,250 (17.6% discount) • Rental PCM - £1300 (7.8% yield) • Deposit required £49,940 • Mortgage Monthly Payment £998 • Management Fee £196 • Monthly Income £106 This property has now re-valued in 2013 at £255,000, so the investor is able to remortgage and draw down further equity to build his portfolio. Ann Arvor - Cornwall Two bedroom apartments with open plan living / dining room and kitchen. A fantastic holiday home or first time property! All have allocated parking spaces and overlook mature woodland. These new homes are located close to St Austell and Truro making them ideal for first time buyers, home movers, investors, or as a holiday home as it is close to The Eden Project and two golf courses and a private beach. • Market Price £160,000 – • Negotiated Discount Price £134,995 • Equity= £25,005 (18.5%) • Rental PCM - £625 • Deposit required £33,750 • Mortgage Monthly Payment £422 • Management Costs £110 • Monthly Income £93 (5.5% yield) • Value in 10 years £355,592 assuming 8% per annum growth. David WIlson Show Home Leaseback Here is another strategy that the Midas team can offer when the timing is right. It's called a Show Home Leaseback and is a strategy which offers a guaranteed rental income at twice the market rent. It also offers a guaranteed capital growth strategy because the first owner on the plot benefits from the price rises that occur for equivalent properties within the development as each phase is completed. This one was in Yeovil with David Wilson Homes. They required a 25% deposit at the time, but some lenders will start at 20% deposits. Basically, you are the landlord and David Wilson become your tenant and they are probably the best tenants you could wish for because they keep the property in immaculate condition as it's their sales office and show home, so it has to be in top condition. After the rental guarantee period is over you can keep all the fixtures and fittings. • Purchase price £345,000. Discount £15,000. • Rent guaranteed at £2512.00 per month for 3 years. Mortgage payment of £873. Rental profit = £19,668 per annum. (5.7% yield) Wyndham Park is a stunning flagship development of two, three, four & five bedroom homes set on the edge of stunning countryside. The development will encompass both relaxing riverside walks as well as new local amenities such as a planned new community centre, sports hall and swimming pool. The environment has been a key factor in the design of Wyndham Park. There is provision for children's play areas and green public spaces as well as new public transport links and cycle ways. Wyndham Park is also ideally located for the A303 and the Yeovil Junction mainline station. Frederick Mews - Fistral Beach - Newquay With 247 flights per week, Newquay is arguably the best location in the UK for surfing and its the most desirable holiday hot spot for its wonderful Cornish beaches and coastline. Jamie Oliver and Rick Stein both have restaurants in Watergate Bay and Padstow and with rental incomes being so high during peak season, the apartments we source can be run either as a holiday rental home or on 6 month tenancies. Frederick Mews is kitted out with surfboard racks and dry rooms for the wet suits, so it's tailor made for the surfer. • Market Price £220,000 • Midas Price £180,000 (40k equity = 18% discount) • Rents £825 pcm on 6 month tenancies (5.5% yield) For all of the showcase properties we have shown you so far, the strategy is to get you maximum capital growth so we can grow your portfolio as quickly as possible. So, we are looking for a growth story in the medium term to help us do this. Without any capital growth, your capital will be tied up and not working for you. We understand that for a truly diversified portfolio we must source properties that are going to give massive value in terms of yield. So we have identified a very effective strategy which delivers both capital uplift and a yield in a stunning manner. Cardiff Student HMOs An HMO is a House of Multiple Occupation and we know that in Cathays, the most densely populated and most desirable student location in Cardiff, we have found the "Golden Triangle" as it is affectionately known to investors. With our excellent relationship with local agents, we are able to source a three bed terrace student house for £160k and then with £100k investment, turn it into a money making seven bed HMO, generating a massive £25,600 per annum rental income. After expenses, this works out at £1159 per month net income. What's more, after six months, these properties can be re-mortgaged at £300k, which means a full £97k is drawn back out of the deal for the investor. This represents a 22.4% return on capital invested and the yield is a stunning 10.5% after 1 year. Take a look at the build process. The entire build process is managed by the Midas team, and your property is rented out for you with minimum fuss and maximum income for you. These are just a small fraction of the properties we have on offer at any given time at Midas. We'd love to take the opportunity to show you what we can do for you to get your money working really hard for you. The sooner we achieve financial freedom for you, the closer we are to achieving our aims. Wishing you every success. Robin Robin Campbell (Director @ Midas) ....helping people profit from property and design a life of choice 0117 9117590 | 077 6660 6662 | Website | robin.campbell@midasestates.com Watch our Online Property School >

The Pitfalls of Managing Properties to Corporate Clients

When asked recently by the Telegraph for comment on the pitfalls of corporate clients, Andy our  Director at Midas Lettings said:

“In my 15 years of experience corporate clients generally are difficult to deal with.  We find that they put any employee in and the properties get treated like hotels.  A professional couple or family are far more secure tenants and look after the properties better.

The worst client I ever had was corporate. The Director of the Company took on a property, trashed the place leaving an £8000 cleaning and replacement furniture bill. The Company then threw the weight of its legal department behind it and it was months before the landlord got any money back.

I do get landlords saying they want corporate clients as they are under the impression that they are perfect.  The problem is that a company will have a property for a year and put 30 different people in so wear and tear is high.”

The question to ask yourself is: when you stay in a hotel when do you ever worry about the condition you leave it in? If you regard it as your home even for 6-12 months you will invariably treat it with respect!

For a full breakdown of how we manage our properties have a look at our What We Do page on our website

10 Frequently Asked Questions and 10 Should Ask questions of #Buytolet #Investment‏

We get asked an awful lot of questions here at the Midas Estates office and at our Property School events - so I thought I'd put electronic pen to paper to catalogue our top 10 Frequently Asked Questions , but also what our team think should be the top 10 Asked Questions. If you have different questions of your own then please comment below and we'll respond right here on this blog.

 

 

 

 

 

 

10 FAQs

1. How much of a deposit is required to secure a new build buy to let these days?

2. What’s the property market like these days?

3. What sort of properties do you recommend and why?

4. Where do you recommend to buy these days?

5. Do I have to have an income to get a buy to let property? 

6. What’s the minimum sort of investment to get started these days?

7. Can a parent gift a deposit for a buy to let investment?

8. What is the maximum age for a buy to let investment?

9. Wont the property market run out of steam?

10. Will legislation change to make property investment difficult? 

Answers

1. 10% for 2^nd hand buildings 20% for new build – though better mortgage rates are achieved the higher the deposit value

2. The market is strong in some areas – especially an area where a growth story is emerging – like Hayes Harlingdon because of the unloved area getting a makeover and being at the heart of the cross rail 2018 project which will ensure new jobs and commuter business coming through the town.

3. We recommend new build because with the right negotiation a profit can be achieved from day one with the minimum of fuss. Any run down property or older property will need more care and investment sooner than a new build with 10 year guarantees being offered on a lot of the fixtures. Its also a lot less hassle with new build because no initial works are required other than the snagging before completion. Flats are often the most lucrative and smaller properties are easier to rent. We always find out how many in a block – anything below 14 is open to housing association and is also easier to control the management company.

4. We recommend the following places in the South West and London – Coastal Devon and Cornwall, Bristol, Bath, Cheltenham, the Cotswolds, Oxford, Hayes & Harlingdon, Lewisham, Blackheath, Muswell Hill and Highgate.

5. Not necessarily – although some lenders want to see evidence of income to secure a buy to let mortgage – there are still some that are purely interested in the rental potential of the property. They will expect to know what type of property it is and how many are in a block. Large numbers are often harder to secure borrowing on as they are deemed higher risk due to increased competition on the rents.

6. For around £25k you can buy a property in the UK that will cash-flow , i.e. generate a monthly profit and discounts be available and be located in a growth area – your objectives of growth first and yield second will usually demand that the properties are in a good location – for instance a 1 bed studio on the water in Bristol will need about 22k deposit.

7. Yes it is possible for a parent to gift the deposit for their children to buy an investment property.

8. The maximum age lenders allow to own a buy to let mortgage is 85 surprisingly so there is no real barrier to entry into the buy to let market.

9. The UK population is projected at 63.5 million by 2013, 65.6 million by 2018 , 67.8 million, 69.8 million by 2026, 71.6 million by 2033 , Rented sector – provides to 4.3 million houses, That figure is expected to grow by 20% in next 5 years. We are under supplied by over 500,000 properties nationwide at the moment and building is too slow to meet the current projections so the supply and demand picture is very strong. We have low interest rates, very motivated vendors – therefore best prices and very high rents at the moment. There are 8 applicants for every one tenancy on average in the UK and that’s just the average. In high demand areas you are looking more at 15-20 applicants. In fact tenants are gazumping each other with higher rent offers just to secure the property.

10. Ask yourself you are the biggest landlords in the country? The Lords? They make the law – and can you see them changing the law to penalise themselves? The current fiscal policy is quite predictable at the moment – increase the money supply with quantitive easing to reduce the national debt. If you water down the purchasing power of the pound – you reduce the proportional size of your debts. This affect is replicated with any mortgage debt you hold reducing its proportional size. But the result of this policy is inflation. The consumer price index which is often banded at between 4-5% is supposed to be a measure of the inflationary pressures on consumer items like electrical goods, but it doesn’t take into account items like food, energy and fuel – which have all raced away with inflation in recent years. Commodity prices have risen steadily as a result of the increase in money supply – and this means that things like sand, cement and building materials, the things that go into property construction will rise. Property investors are therefore well placed in such times as their asset price rises and the proportional size of their debt reduces.

 

 

 

 

 

 

 

 

      10 SAQs

1. How do you vet a letting agent?

2. How do you do due diligence on a valuation to make sure it’s a genuine one?

3. How do you find a good location for investment?

4. How do you protect against unforeseen circumstances – like boilers breaking down, interest rate rises, competition on rents in the area?

5. How do you negotiate the best price?

6. Should I instruct a tax specialist?

7. How do you minimize void periods?

8. What are some of the misjudgements made by landlords?

9. How can I best protect my assets from a delinquent tenant? 

10. What is a good overall strategy for property investment in a nutshell? 

     Answers

1. We email 30-40 agents and wait for a response on a rental property – if they don’t come back within 2 days – bin them. For the rest – ask them about their service – their attention to detail and hunger for business will show. We look for credit, employers and landlords references being taken. We look for the use of all the major property portals for marketing the properties. We also look for flexibility on the finder’s fee – to negotiate this fee down – we promise more on the basis that we are an investment company.

2. We always ask for a Royal Institute Chartered Surveyors evaluation report and a comparable from the market to show the price achieved in the market against the surveyors report. Once this is known we can now be clear on our negotiation on price and know we have a genuine discount being offered. We ask how many have been sold to other investors because if the number is too high , on completion we will have to compete with other landlords marketing their properties to let. Smaller properties of under 14 units make the management company easier to manage and the service charges will be less for things like security and shared amenity maintenance.

3. We look for good quality universities and schools , tourism hot spots and centres of employment to ensure large demand for rentals and we especially like beside the water as this is prime – so riverside, dockside, lakeside and seaside properties all achieve a premium over properties further inland. We also look for a growth story – so news of an insurgence of investment in the area – like the Crossrail 2018 or the Olympics for instance heralds new demand and investment potential. We make sure the transport links are good – like motorways, rail links or airports. We spend time in nearby cafes , restaurants and bars by day and night to see what kind of clientele frequent them. These are the future tenants of the prospective property and you should be looking for respectful, civilized people. We ask parents at the schools – “what’s it like to live here” and we also find out where the local housing association houses are. We also go to planning permission websites to check for up and coming changes in the landscape – the last thing you need is a by-pass to come right through your investment community spoiling the views – so it pays to find out 1^st.

4. We make use of something called a buffer which is a nest egg set aside to protect against those unforeseen circumstances which it they occur in quick succession across a portfolio can wipe an investor out. This can take the form of a drawdown facility on the mortgage or the use of a high interest account – but we say as a rule of thumb you should have about 5k for every 200k of property invested. Larger portfolios require larger buffers and its essential to keep this topped up using your rental income and ensure that should the worst happen on all your properties you can ride the storms.

5. Developers will be open to negotiation at the beginning and the end of the development; at the beginning because after securing some reservations for the first few they can go to the bank for lending to start the project and at the end they are already thinking of moving on and they are most motivated. Before you start your negotiation, see an independent mortgage broker and get your finance in place – and this means getting approval for your lending figure. Tell the developer you have finance in place and that you can go to exchange in 4 weeks. This will differentiate you from the average customer who will be buying to live and can string them along for 12 weeks and then bail out of the sale for innocuous reasons like a leaky tap. You should check the valuation is genuine by seeking a RICS evaluation and a comparable – check also that you are not competing with lots of other investors on completion for tenants. Once you know this information ask for a discount.

6. Yes – a good accountant should understand the principles of property investment and some are property specialists. Their advice will position you for the mitigation of tax – because you are liable to personal gains on your monthly income and for capital gains on the sale of your properties should you wish to dispose of one in the future. They will be extremely helpful in keeping you appraised of budgetary or legislation changes and they will keep your books in good order. We use some fantastic cloud based software which is open to our landlords to download their annual statements which contain all the income and outgoings on each property. Ask your lettings agent whether they use LettMC or similar software and can allow you to login to your account. This will take the stress out of submitting your annual tax return and keep your books as straight forward as possible.

7. We never allow a contract to expire in a dead time like Xmas and New Year so in June and July we only sign 8,10 or 12 month tenancies so that tenancy end date comes out in the spring – which is a much better time to have a property on the market. We also insist on a 2 month notice period on all tenancies – this means that there is more chance to market the property and serve notice if the tenant wont accept an increase in rents and process an incoming tenant in time for the end date , making the handover as smooth as possible. Using this method our void periods are kept to a matter of days rather than weeks. We also utilize multiple agents to do the tenant find and tell them about each other so that there is competition and they are therefore hungry for the business –this ensures your tenants are found quickly.

8. According to a recent survey – 44% of landlords invest within 15 miles of their home. This is a mistake if the property is not in a good growth area. If you use a good management company you will hardly ever have to visit your property. 43% of landlords only use one agent to get a rent appraisal. 3 or more should be your minimum – because your 1^st and only one could give you a low appraisal and you may miss out on higher rents. We take an average of the higher half or 20-30 agents in the area to give us an achievable figure. The number one factor influencing a landlords decision to choose a letting agent is proximity to their office. This is a mistake – it has to be the location of the property because the agent with the best database of prospective tenants will be in the vicinity of the property and not your office. 65% of landlords would accept a renewal from a good tenant rather than accept a new tenant on a higher rent. This is a big mistake because good tenants are well behaved because they know they are on a good deal – they know the market rent and will never volunteer that their rent is too low. We had a landlord who said – “but he sends me a Xmas card every year and always pays on time” when offered another £120 per month more on the rent. We said “We will send you a Christmas card every year if you gave us £120 per month!! – would you give your sister or brother £120 for nothing? No , well why are you giving £120 to a total stranger?!”

9. The best way of protecting yourself is to ensure the tenant signs an insurance policy guaranteeing the rent if they fall out of work or become made redundant. As soon as their rent becomes one month in arrears, the policy then kicks in and your rent is paid. We also include £50k legal cover , so if the tenant becomes really difficult and you need to serve a section 8 eviction – your legal fees are paid and all damages are covered. We insist all our landlords have this insurance in place because the bigger the portfolio , the higher the likelihood this situation will occur – no-one is immune and it can be devastating when it happens with bills mounting up into the £1000s.

10. Buy into a growth story in a good location by the water or in central areas where there is good rental demand. Negotiate a good price at the right time. Hold your properties until you have enough equity to refinance, and use this amount to buy your next property. Top up your buffer each time so you are covered for the risk. Diversify your portfolio in more than one location. Use the professionals: property sourcer, mortgage broker, accountant and lettings agents to do the work for you and don’t cut any corners. Above all enjoy your portfolio and start with the end in mind.

We hope you found this blog post useful - thanks for your interest.

Until next week

Robin

www.midasestates.com