Tag Archives: Cashflow

Referencing Services for Landlords Latest Articles, Lettings & Management

Referencing services for landlords come in several varieties and with numerous options and price structures. 

You can get anything from a credit check for a fiver through to full referencing which guarantees rent on the due date if your prospective tenants and guarantors are considered to be a good risk.

The larger referencing companies have been around for several decades and are used by literally thousands of letting agents across the UK. They have, therefore, also developed huge databases over the years of bad payers, anti social tenants and tenants who have caused wilful damage to landlords properties.

If you are offered referencing for under £10, chances are that you will get what you pay for which at best could be described as an indicative report only. A company which previously provided lifestyle referencing free of charge now only offer this service when combined with a £4.99 credit check for example.

The advice from Property118 is to pay slightly extra and buy the real thing. If you are heavily reliant on your rental income and could not afford the legal costs associated with evicting a bad tenant we also recommend you to purchase rent guarantee insurance. The entire package is generally available for less than £100 a year. Do check the small print on RGI policies though as your claim might not be valid unless you follow time sensitive claims processes.

As of next month (August 2013), a new service will be launched into the market for complete peace of mind. It is a rent collection product with a difference; in that rent is paid to the landlord on the due date whether it has been collected or not. The company offering the product is new to the market but the scheme is underwritten by FCC Paragon, established in 1996 and regarded by many in the PRS as one of the UK’s most established referencing companies. The legal services for possession are outsourced to Landlord Action.  Rent continues to be paid on the due date until such time as possession is recovered, all at the expense of the underwriters. This scheme will be competitively priced at just 5% of rental income when it is launched towards the end of August 2013. It’s an ideal half way house in terms of pricing between self management and full property management, however, the major benefit is the certainty of cashflow. For more details see LettingAgentsOnline.co.uk Referencing Services for Landlords


Tenanted houses in Lincoln city for less than £90,000 Landlord News, Latest Articles, Property For Sale, Property News, Property Sales & Sourcing

Willow tree pic“Your Property Concierge ” Kelvin Kingsley has discovered some more bargains, and these are already let!

If you are looking for a low cost, low maintenance freehold property which is pre-let and will return instant cashflow then look no further.

These are almost new, ready tenanted, two year old, two bed terrace houses with a rental income of £500 pcm.

They are priced at £87,950 which equates to a gross yield of 6.82%. With the benefit of a mortgage of up to 75% of the purchase price the cash on cash return could be much higher.

NOTE – there are only three of these two bed units available and they will be sold on a first come first served basis.

There are also a few three bed semi-detached houses available at £109,950 with a rental income of £580.

Details about the development area:

  • Excellent rail and motorway access nearbyWillow tree kitchen pic
  • Off road parking included
  • Booming University population
  • 19 miles to A1 motorway
  • Lincoln city centre 2 miles away
  • Lincoln County Hospital 2.5 miles

There are several comparable sales listed on HM Land Registry in the last year for similar properties in the area. These units were selling between the range of £100,000 and £110,000.

To download a full copy of Kelvin’s “Due Diligence”, property specs and to get details on how to arrange a viewing or reservation please complete the form below.

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The Property Ombudsman Logo

Your Property Concierge is a sister brand to Property118.com. Your Property Concierge does not charge fees to investors as we are retained by vendors which are typically developers or insolvency practitioners. According to the Estate Agency Act 1979 this makes us estate agents. Therefore, to keep ourselves compliant the Trading Name “Your Property Concierge” is registered with the ICO and is also a member of The Property Ombudsman redress scheme (membership number – D8072)


Lowest ever BTL interest rates released! Cautionary Tales, Financial Advice, Guest Articles, Guest Columns, Landlord News, Latest Articles, Mortgage News, Property Investment News, Property Investment Strategies, Property Market News, Property News, UK Property Forum for Buy to Let Landlords

Lowest ever BTL interest rates released!“Lowest ever BTL interest rates released!”

It’s a great headline grabber isn’t it?

Well I actually saw this on another property forum and I thought I ought to respond. Continue reading Lowest ever BTL interest rates released!


Due diligence on buying a property with a tenant in place? Latest Articles, UK Property Forum for Buy to Let Landlords

Due diligence on buying a property with a tenant in place?My business partner and I are about to purchase our first buy to let property – a one bed flat in Southsea with a tenant in place.

We are keen for the tenant to stay on (he has indicated he is happy to) so what is the best way of handling deposits and AST’s in this situation?

The solicitor has advised that as long as some sort of AST is in place, the mortgage company will be happy.

The managing agent (who is also handling the sale) has told us that his deposit will not be returned due to extensive cleaning required (fairly dirty tenant who smokes). Our concern is that the tenant might struggle to find another deposit for us, when we buy the property.

Has any one had experience of this situation before? Although on the face of it this sounds less than ideal, we are happy to buy the flat in a ‘dirty’ state if the tenant is happy to stay, as he is paying good rent and is a reliable payer apparently.

Whenever he moves out, we have factored in around £4k refurb as it will need a new kitchen/carpets and redecoration of at least one room.

Our plan is to try to get a new 1 year AST in place prior to Exchange or completion, to minimse our risk and guarantee cashflow prior to a subsequent refurb in (for example) 12 month’s time. However we won’t have a date of commencement for this AST until a completion date is known so I am wondering how feasible this is?

Any other suggestions of how to minimise risk in this situation, prior to incurring cost of solicitor/IFA/surveyor would be appreciated.

Is it appropriate to ask the managing agent for records of payment history and any disputes?

Thankyou

Jon Baker


Interest only or Repayment BuytoLet mortgages Advice, Buy to Let News, Landlord News, Latest Articles, Property News

Ying and Yang imageA common question from new Landlords is why are so many BuytoLet mortgages taken out on an Interest only basis rather than Capital and Repayment.

First of all it helps to understand that a BuytoLet mortgage seems very similar to a Residential mortgage, but it is not regulated in the same way by the Financial Conduct Authority FCA (the FCA has now replaced the FSA). This is because it is treated as a commercial loan, and investors are assumed to have a greater understanding of the commitments they are entering into than someone who may have no financial understanding buying their own main residence. The key is that a BuytoLet is seen by regulators as a business loan and BuytoLet investors should treat their property purchases using a mortgage as a business themselves.

If you were to offer any business, no matter what the industry, the option of:

  • a loan on Interest only with lower monthly payments or
  • a capital and repayment loan with higher monthly commitments but a reducing balance

Nearly every business would choose Interest only, because as the saying goes “Cashflow is King”

Now in practical terms, the biggest risk to a landlord is not being able to make the monthly mortgage payments. Therefore this risk is reduced using Interest only.

But what about reducing the loan size I hear you cry.

Interest only should hopefully produce a cash flow surplus on a reasonable yielding property and this should then be saved in a separate account for a rainy day to cover future mortgage payments, or used at your convenience to pay lump sums off the mortgage when there are no redemption penalties.

The control is now in your hands and not the lenders, vastly reducing your exposure to risk. If you take out an interest only loan it is easy to get the lender to convert this to Capital and Repayment, but the reverse is true with lenders being reluctant to convert a mortgage to interest only from Capital Repayment when you need to.

If you are sensible and treat all your rental income as part of the business e.g. don’t rush out on holidays or buy a Ferrari, you can now manage your cash flow and total debt outstanding yourself.

It is important to note that this strategy is not available or right in all circumstances, but a summary of why it is extremely popular for BuytoLet investors.

If you would like to view the most popular Buytolet mortgages available in the market today, see how much you can borrow and what it would cost please feel free to CLICK HERE for our BuytoLet mortgage calculator.


Landlords Life Insurance Calculator Buy to Let News, Insurance, Landlord News, Landlords Insurance, Latest Articles, Property Investment Strategies, Property News

What is the minimum amount of Landlords Life Insurance we really ought to purchase?

I suspect the reason most property investors choose not to purchase Landlords Life Insurance is cost. For example, if you are 40+ years of age and your buy to let mortgages balances are £1 million plus the premiums can appear to be very scary if you ask for a quote for enough life insurance to repay all of your mortgages in the event of death.

For borrowers without family and/or business partners whose finances could be affected adversely by death during a mortgage term, the risk of having no Landlords Life Insurance is perhaps an acceptable one for them. However, for people who have borrowed jointly or would like to leave their properties to loved ones the risks are far higher.

In the event of the death of a borrower, even if it’s a joint mortgage, it is usually well within the rights of a mortgage lender to call in their loans. This is more likely to happen post credit crunch as several lenders have closed their doors to buy to let lending and want to recover as much money as possible. Lenders which are still actively in the market can now lend money at far higher profit margins so there is every incentive for them to call in their loans in the event of death too.

I am not a financial adviser and the following should not be construed as financial advice. It’s just my opinion as a landlord on what the minimum amount of Landlords Life Insurance should be purchased.

If I were to die tomorrow my wife would have two or three choices:-

1) Sell the property portfolio and pay off the loans

2) Refinance

3) Do nothing and force the mortgage lender to call in the loans, eventually reposes the properties and sell them. This would cost a lot more than options 1) and 2) above.  The reason is that substantial fees and penalties would be incurred and the mortgage lenders primary incentive would be to recover as much money as possible. Now I know that mortgage lenders have a duty to sell the properties for as much as possible, however, is that really what you think happens?

In my case, I want my wife to continue to receive rental income as I genuinely believe that property is the best form of investment. Therefore options 1) and 3) are out of the window for me.

On that basis, refinancing is her only viable option. However, to get a decent deal and retain the same level of cashflow she will need to be borrowing around 50% LTV. This is because it will cost her a lot of money to refinance and the interest rates she will be paying are far higher these days than when I arranged my tracker mortgages at bank base rate plus 1% to 2%.

I have concluded that the minimum amount of Landlords Life Insurance I should buy is the difference between my outstanding loans and the amount those loan balances would need to be to get 50% lending. As a simple example, if I were to own one property worth £100,000 with an £85,000 mortgage, I reckon I would need to purchase £35,000 of life insurance to enable my wife to be able to pay £35,000 off the mortgage and take a new mortgage for £50,000 (which is likely to have a higher interest rate) in order to maintain the status quo in cashflow terms. Now that’s very much a rough estimate as everybody’s circumstances are different but I hope you will find it a useful rule of thumb. The other reason I think the minimum amount of Landlords Life Insurance should be enough to reduce loans to 50% LTV is because at that level of lending, most mortgage lenders would be falling over themselves to offer decent interest rates, pretty much regardless of any market conditions I can realistically imagine.

To help you to work out the minimum amount of landlords life insurance you would need based on the strategy I have outlined above I have created a very simple calculator, see below …….


Landlords Bank Account Question Landlord News, Latest Articles, Property Investment Strategies, Property News, Tax and Accountancy

Landlords Bank Account Question

Scott Hymas has written in to ask what other landlords do in terms of bank accounts. Scott said  …

“I have always used the same bank account for all my finances.

What I want to know is what does everyone else do and what is best practice?

Should I have one account for my personal banking and one for each property, one personal and one for all my properties or keep it as it is.

I keep an account of each properties cashflow separately and so far it has been worked.” Continue reading Landlords Bank Account Question


My New Build Property Investment Strategy Landlord News, Latest Articles, Property Investment Strategies, Property News, Property Sourcing

My New Build Property Investment StrategyTwo bedroom new build houses are my favourite type of property to invest into. They are easy to let, offer good rental yields and appeal to first time buyers when you want to resell.

I recently purchased the one pictured left at the price it cost the developer to build it.

The majority of the development has been sold to owner occupiers who paid considerably more than I did. Continue reading My New Build Property Investment Strategy


Property Buying Motives Landlord News, Latest Articles, Property News

Property Buying MotivesProperty buying motives intrigue me based on the fact that we all think very differently so I thought I share a bit of deep thinking with you.

The four primary motives for purchasing property, so far as I can think of, are Comfort, Cashflow, Kudos and Capital Appreciation. Every property purchaser will have at least one of these primary motives and possibly secondary motives as I will go on to explain in this article. Continue reading Property Buying Motives


Agents paying landlords 6 months rent up front to secure new business Landlord News, Latest Articles, Lettings & Management, Property Investment Strategies, Property News

Since running an article about rent in advance earlier this week I have received a number of telephone calls asking me to clarify whether this really is a lettings product/service which genuinely pays landlords 6 months rent up front despite charging rent to tenants monthly.

Many of the people who asked me about this are surprising when I tell the that the answer to their question is YES!

6 months rent up front

I thought I’d save myself some time explaining how it works over and over again on the telephone by writing a personal of the scheme. NOTE: Advanced Rent is not our scheme. Continue reading Agents paying landlords 6 months rent up front to secure new business


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