Billionaire Andrew Carnegie famously said that 90% of millionaires secured their wealth by investing in real estate. But is there still money to be made in property, despite Covid-19 and the Government’s recent BTL tax measures?
Recent research from the National Residential Landlord’s Association survey that the Coronavirus has not so far had any significant impact on their business. Surprisingly, only a fifth of landlords said the virus had had a ‘significant’ impact in the last three months. Meanwhile, a third reported an increase over the previous three months in the demand for private rented housing.
Of the 2,000 landlords questioned, one in six of those surveyed said they planned to purchase at least one or more additional properties over the next year, twice as many said they intend to sell one or more properties. Stop the
Over the last two decades, property investment has been shown as the preferred method of investment for generating returns for 40% for Britons. It is well recognised that a good property investment can bring better returns than stocks, shares and pensions.
According to The Mistoria Group, the key question is how much control should you take in managing your investment, or is it wise to leave it to the experts? Mish Liyanage, Managing Director comments: “The biggest challenge for an investor is finding tenants. It is important to secure the right tenants to ensure your property is cared for; the rent is paid on time; and you prevent void periods. Deciding where to advertise your property; screening tenants; sorting the tenancy agreement; and organising the inventory can be time consuming. The longer it takes to find tenants, the less revenue you will have.
“Agents’ fees for a yearly management charge will probably equate to two months’ rent. A good agent will have a waiting list of potential tenants ready to move in as soon as the property is vacant, almost paying for their service immediately. Agents will charge between 10%-15% to manage your property portfolio. In the case of student lets, it is usually only 1%-1.5% of the total yield, still leaving a very healthy 9-10% cash return on investment each year.
“If you have an agent looking after your property, all you have to do is check your bank account on the first Friday of each month, to make sure your investment yield has paid. You won’t have to worry about obtaining the correct licenses and keeping them up to date; paying utilities; organising repairs; resolving tenant complaints; chasing rent arrears; and providing the annual gas, electricity and PAT certificates. Some local council require you to get selective licences and if you don’t have this you can be liable for a fine up to £20,000.
“Another important consideration is taking advantage of some of the best yields across the UK, for example student accommodation in the North West, with the help of the right property investment firm. The secret to a successful ‘armchair’ investment is to work with the right partners. It is important to buy from a developer with a proven track record; use a letting agent that specialises in the rental sector you are looking to be in eg student, residential, DSS, commercial or retail. Each of these is a specialist field and if not undertaken by an experienced agent, can lead to the failure of a potentially good investment.
“If the property investment is to provide an extra income or a pension, it is best to use an agent. But if you want to be a full-time investor, and have the time to do so, go it alone. Whatever you do, make sure you carry out thorough research, before making any decisions on how you will manage your investment.”
The Mistoria Group is a high yielding student buy to let investment specialist, offering HMOs and armchair investments in the North of the UK, generating combined net cash yield up to 13% (Rental and Capital Growth). For more information on the firm’s current available investments and the services it offers, visit us at www.mistoriagroup.com or email firstname.lastname@example.org or call 0800 500 3015.