UK Property Investment Blog

We are not exaggerating when we say that stacking is a vitally important part of your property investments.

Not only will it help you to ferret out the good properties from the bad, but it will save you money too.

It’s simple – by knowing the rental prices/ tenancy demand of your potential investments before you buy, you can save yourself a lot of future hassle and maximise your return!

More importantly by taking charge of your success at this early stage, you can enjoy the satisfaction of investing solely in properties that you know will consistently generate you a positive cash flow each and every month!

Okay, so how do I learn to stack?

Compared to the average homeowner, your goal is not to live there – no, no, no – your aim is make a positive cash flow that exceeds £300+ a month.

The key is finding multiple properties.

For that reason you cannot research your properties one at a time – that would take forever. The best tip is to research a multitude of properties first, before narrowing this list down to just those which will make you money.

Surely that too would take ages?

Not if you use the right systems, techniques and software.

At Property Mentor we can understand the temptation to invest before you have completed your research, especially when faced with the prospect of having to examine hundred’s of properties by hand.

Yet, this process doesn’t have to be that complicated.

By attending our full weekend workshop we can offer you all of the software, systems and techniques to effectively research your properties; assess their profitability and check out which are the best mortgage rates for you, all at a click of a button.

We want to make your route to becoming a successful property investor easier, and we feel our deal analyser and research software can do just that.

By simply providing it with details of your properties current rental prices and interest rates, our software can judge which of your properties will generate you the best cash flows and allow you to invest in only the most profitable properties.

Some tenants are facing excess charges of £600+ a month according to Citizens Advice.

Speaking to 1,300 tenants across the UK between August and November of 2008, of those interviewed the vast majority were found to be paying hundreds of pounds to their letting agents for tasks that bore no actual relation to the cost of their service.

What are these extra charges?

The worrying part about this discovery by Citizens Advice was the revelation that many of these extra costs were being charged out to both landlords and tenants:

Non-refundable holding deposit
Deposit administration charges
Administration fees
Check-in/check-out inventory charges…

A part from each of these tasks existing beyond the letting agents actual expected responsibilities, they are vastly over priced.

Take their reference checks. Typically a procedure performed by all letting agents as part of their setup agreement, tenants were expected to pay reference charges of £10-£275 as well as a fee of £12-£200 for renewing their tenancy agreements. Both un-necessary charges.

How can these charges affect tenants?

Whilst the Association of Residential Letting Agents code of practice is designed to ensure letting agents fees are clear and reasonable, this survey by Citizen’s Advice clearly proves that many are doubling their charges in order to increase their profit margins.

The consequence of such charges though is that letting agents are creating a barrier for people on low to average incomes which is preventing them from entering onto the property market.

Luckily with the governments plans to implement registration charges for landlords and letting agents, this shall worm out rogue letting agents and put a stop to these additional charges.

So, how these additional charges can affect your property investments? Click to find out!

In a survey conducted by Paragon Mortgages nearly 33% of landlords never run a background check on their tenants – a check that could prove to be the pivotal difference between finding a quality tenant and a bad one.

Traditionally a landlord would be expected to perform a series of credit/ background checks to ensure that their tenants can afford their rental property. For example the following precautions:

Identity verification
Employment status
Credit/financial history
References

Yet as this report by Paragon proves a startling number of investors choose to not perform this search.

Continuing in their survey Paragon found of the 1,000 investors questioned that nearly 14% of them – at some point in their career – had been forced to evict a tenant due to them falling into arrears.

This figure is further confirmed by the National Landlords Association. In their annual company review they reported that 75% of their calls were from property investors asking for advice on rental arrears.

What can investors do to prevent this?

In light of the current financial climate, the surest way to secure your rental property and your monthly cashflow is to make your tenant fill out a Tenant Application Form.

By utilising this simple form you can acquire the following details about your tenant: their property details; employment status; previous/current landlords references and their bank details.

One of the key elements to attaining a successful property portfolio is ensuring that you offer your rental properties only the best in quality tenants.

Yet in a recent survey by LPS, of the 10,000 investors they surveyed, LPS discovered that 42% of them had received fake references from tenants aged 29 and below.

With at least another 50% having received a fake reference at least once during their career.

Yet this statistic is only a sample of the numerous deceptions investors have encountered from their potential tenants.

Continuing in their report, LPS noted that investors had also experienced similar instances from other age groups; some of which you may find surprising:

Aged 50 and above: 43% offered fake references
Aged 60 and above; 21% offered fake references

Without proper measures in place, the above figures could prove to have a detrimental affect upon the size of your passive income, by removing a vital part of any property investment strategy: a paying tenant.

So what do you do?

The only sure way to guarantee that your tenants are sending real credible references is to request these references yourself. Plus during this time it is essential that you have access to resources that will enable you to check out the validity of your tenant.

The key areas you will need to establish are:

1. Their credit history
2. Current/previous employment
3. Current/previous landlord references
4. P roof of income.

And in terms of external character references, LPS have proven that given the opportunity tenants will opt to send fake references in order to acquire a tenancy agreement.
So, are you building your property portofolio?