Party Equipment Rental

I really like rental businesses. You get to make money from what you own – and keep it! But what can you base a rental business on? There are many possibilities, but the key criteria is usually something which people need and use rarely. Party equipment falls into that category.

Things like canopies, tables, chairs, and large quantities of crockery and cutlery can be expensive to buy and troublesome to store when you’re only going to use them for special occasions.  Renting makes a great deal of sense for the customer. From the business side it makes sense too. These things needn’t cost a fortune if you buy carefully and in bulk, and can often be rented out for a sizeable percentage of the cost – again and again and again.

So what will you need to start a party equipment rental business? Just two things really – somewhere to store your stock and a means to deliver and pick up from your customers. If you have those two things – and a little capital to get started – you can be up and running very quickly.

Streetwise Property Alert 30th August 2013

Welcome to today’s UK property news and views…

PCL Bubble?

According to new research by Development Securities and Fathom Consulting, prime central London (PCL) property is in a (modest) bubble and could see prices fall by up to 20 per cent. ‘Economic drivers partly explain London’s residential property price escalation in relation to the rest of the UK. But only around one half of the further substantial appreciation of PCL property prices through 2012 and into 2013 can be justified by economic fundamentals. On that basis, we find some risk that a modest bubble has started to form in the PCL market.’

‘It is more overvalued than we’ve ever found it to be before – and our model goes back to 1995. Demand is not inexhaustible and supply is not inelastic. The three key factors are the value of the pound, the performance of global equity markets and the (perception of London as the) ‘safe haven’ of world markets. It could inflate yet further – but we are now in a position where, once you’re overvalued,  I can’t predict where exactly the trigger will come from, but you are vulnerable to a correction.’ Let us know if you are active in this sector – we are at work on a report.

An Update

Off the top of my head, the Bristol student accommodation units have all gone (other than just-released penthouses which we are discussing with six to eight members). The care home has now been fully taken too, other than one member who has reserved but not yet signed. That may come back to market and we have a reserve list for members who want to snap it up. We still have availability with storepods. These have been very popular.

BTL Mortgage News

Aldermore has amended its BTL lending criteria to accept clients with up to two missed mortgage payments over the past 12 months, CCJs and defaults registered over three years ago and any missed unsecured credit payments such as credit cards etc.

The Aldermore range starts from 3.98 per cent for a two-year fixed product with a 2.5 per cent fee at a maximum 75 per cent LTV through to a 4.98 per cent deal with a £1,999 fee and 80 per cent LTV. As ever, talk to your broker.

Group DD Meeting

I’ve had some members asking if there are any plans to do a group due diligence meeting with Bastien Jack regarding their development propositions. I’m very keen on doing group site visits as you know but it hadn’t even crossed my mind until it was suggested! I thought why not if there is sufficient interest!

It would actually be an office visit to Lincoln giving potential investors the opportunity to meet and interrogate Mick Rawlinson the development project manager. You’ll be able to meet the team and see the resources behind the scenes and Mick will take you though the whole sequence in detail including selection criteria, cost analysis, project planning, legal structure and how it all fits together.

You’ll obviously have the opportunity to ask any questions you can think of, the advantage with a group is that we should be able to come up with a lot of intelligent and testing questions to really put Mick on the spot and get a thorough understanding of the proposition in as much detail as you deem necessary. If you’d be interested in a group visit email me back and we’ll see the level of interest and take it from there? I’ll come and join you for the day.

Portfolio Review Time?

According to Townends, the estate agents, the UK residential market is steady but some areas, and they name London, have seen rent falls this year so it is a good time to review your properties and adjust to these changes as appropriate.

‘Landlords have had to be more realistic in the last few months and adjust their expectations and prices accordingly in order to maintain their competitive edge. To attract the best calibre of tenants and avoid a void period, landlords need to be reviewing their properties objectively to ensure that what they are providing warrants the asking price. Even the smallest re-investment can make a big difference, not least that it increases letability but helps to hold on to good tenants for longer.’

‘If landlords are unable to afford basic maintenance with rent levels as they are, then they are working their finances too tight. Price fluctuation within the rental market is the nature of the business and shrewd landlords will work this into their business model.’

Carbon Monoxide Reminder

Catching up on some reading of the regional press, we note that a Yorkshire newspaper reports that ‘Up to 99,000 rented households across Yorkshire and Northern Lincolnshire have had a fire or gas leak in their home. Only one in four tenants say their landlord has a carbon monoxide alarm fitted in their property and one in ten say they don’t have a smoke detector.’ Food for thought?

An Outlook

We are currently looking at three student accommodation deals and we should have at least one ready to go this weekend. We are also working on a second care home project. We have a hotel in London that we are going to introduce soon; I am in London next week for some dental work and a visit to the BFI Imax and will pay a call then. We are also looking at some BTLs in Yorkshire. We are also looking to run one or two seminars soon as well.

Fractional Ownership

Fractional ownership and timeshare – what is the difference? Our friend Peter Esders comments that there is often a lot of confusion regarding fractional ownership and timeshare and many people are confused about the differences and similarities. In fact, many people selling fractional ownership do not understand the differences and similarities and often come out with statements which are based on common held beliefs but are wrong. Over to Peter…

The Basics

Let’s start with the basics. Both fractional ownership and timeshare are a way of buying property where the ownership is divided up between many people. Basically they are the same product. Timeshare has a definition, according to The Timeshare, Holiday Products, resale and Exchange Contracts Regulations 2010, as being where somebody ‘acquires the right to use overnight accommodation for more than one period of occupation and which has a duration of more than one year, or contains provision allowing for the contract to be renewed or extended so that it has a duration of more than one year.’

The most common misconception is that with timeshare you only have a right to use the property whereas with fractional ownership you own the title to the property. Well yes, that can be the case, but it can also be the reverse as well. Anybody who is telling you this is either simply regurgitating what they have been told by other people rather than understanding the actual situation or is trying to hide something from you (as is the case when timeshare companies try to persuade you to buy more weeks in order to ‘upgrade’ to fractional ownership).

There are two basic forms of timeshare – the trust system and the escritura (title deed) system. In the trust system a property is put into the name of a company which is then controlled by a trustee. The trustee then issues a certificate allowing the buyers to use the property for a certain period of time. In the escritura system the buyers get their name registered at the Land Registry directly and effectively own the property jointly with a number of other people.

Similarly with fractional ownership there are effectively two different models – the corporate model and the personal ownership model. In the corporate model the property is registered in the name of a company and then the buyers buy shares in that company. Those shares allow the buyers the right to use the property that is owned by the company. In the personal ownership model the individual buyers are registered directly at the Land Registry with the other owners.

So, in summary, both timeshare and fractional ownership and timeshare can be structured where you have your ownership registered at the Land registry directly. Similarly, both fractional ownership and timeshare can be structured in a way where the property is in the name of a company and then you get a right to use the property.

Long-Held Myths

Another myth about fractional ownership is that it is a new product that has come about in the last few years. Absolute nonsense. Fractional ownership has been around for years. One of the first cases that I dealt with when I was a trainee solicitor was a fractional ownership case where the buyers were buying a tenth of a property which was owned through a company. Of course, back then, it was called co-ownership rather than fractional ownership but a rebrand doesn’t change what the product is.

Having said all of that, there is no need to run away from fractional Ownership (or timeshare for that matter). Both have their place and can be great products. Unfortunately, the lack of understanding of the products is what is stopping fractional ownership from selling as well as it could be. The public see through the misunderstandings and the more that salespeople deny that the product is similar to timeshare the more people get worried. Similarly, the more timeshare people con their existing owners into thinking that they are magically changing their product into something else simply by buying more of it the more fractional ownership gets a bad name.

Fractional Ownership Reminders

Fractional ownership can be a good product, if set up and sold correctly and the price is right. The problems that the timeshare industry created were that they overpriced the shares in the properties, meaning that they were never a good investment and used dubious sales tactics to sell the weeks. Since then, the maintenance fees have also sky rocketed, meaning that people want out of their timeshare. There always has to be a price uplift when selling fractional ownership but this needs to be a reasonable rather than extortionate increase. Similarly, fractional ownership must be sold responsibly and the ongoing management costs must be kept to a sensible level.

Fractional ownership can have many advantages. It allows you to buy a property when you weren’t otherwise able to afford one. It can allow you to buy shares in several properties rather than just the whole of one property – and therefore allows you to spread your risk. It allows you to have a property that is used for more of the year round rather than having a property that empty when you don’t use it. It allows you to share the cost of maintenance with other people.

Of course, it also has its downsides, such as the co-owners falling out, getting divorced or dying, which is why setting up the structure of the co-ownership at the beginning and thinking of the worst-case scenarios at that stage are vitally important. I have seen many cases where people decide to buy a property together and then fall out afterwards. Usually the fall out is over payment of maintenance or who is going to use the property this Easter. Many of these potential problems can be sorted out in advance and avoided via the use of proper documentation.

Peter Esders is a solicitor at Judicare. He can be contacted at peteresders@judicaregroup.com

Tel; 01438 840258

Skype; Peter_Judicare

Judicare Group,Suite 3,29 Mill Lane,Welwyn, Herts AL6 9EU

www.judicaregroup.com

Streetwise Property Alert 29th August 2013

Our most popular UK introductions at present are – by far – the JV and P2B offerings (which include a due diligence meeting with me). Do have a look. Overseas-wise, the Brazil social housing and the Chicago social housing are the most popular by some way. Seminars are coming. Email for full details. Other popular introductions are as follows…

Student Accommodation, Yorkshire, England
Built and fully operational!
Operating at 100 per cent occupancy.
10 per cent returns guaranteed for years one and two.
Luxury twin apartments at £64,495.
Luxury duplex apartments at £74,495.

Family Resort & Hotel, Hungary
This project has now broken ground, a viewing platform has been constructed on site and regular site visits are taking place.If you would like to join me in a visit, please do not hesitate to contact us.

The current deals? A double room – £89,950 with 50 per cent developer finance – is available, offering a 10 per cent return for 10 years.

There is also a family suite – £140,000.00 with 50 per cent developer finance – available. Again, 10 per cent return for 10 years!

UK Commercial Investment
Store pods.
20 locations across the UK.
Invest from just £2,250.
Initial guaranteed returns of 8 per cent.
Projected returns of 10 to 12 per cent.
Buyback after 5 years if required.

West Texas Crude Oil
Invest from $15k.
Set purchase price on 7 year contract.
Current selling price $101.18/barrel.
Purchase price from only $15 per barrel.
Fully managed hands off investment.
Two investment options: sell and take the profit or re-invest.

Student Accommodation, North-East England
From £55,000.
35 per cent non-status finance available.
Finance at fixed 3 per cent rate.
Fully managed by top student management company.
Fully furnished.
Huge student demand here!

Hotel, Gran Canaria

This is a family run hotel and is fully operational and is proving very popular. The last update we’ve had is that Hotel Nogal is running at 100 per cent occupancy.

Site visits are available for this project so please contact us for more information.

Current deal? The most popular is a 13th fraction – £28,000 – with a 10 per cent fixed return for two years.

And what’s coming up? UK-wise we have some off-plan apartments in Liverpool plus a new care home. (Those of you on the reserve list for the Manchester care home sellout will get first choice here). Overseas, we have two luxury model homes on a new resort in Orlando; if you are interested, you can join me on a visit. We also have more BTL deals from Detroit, Cleveland and Memphis. Something for everyone… 

Lessons In Table Manners

If you’ve had a meal ruined by the behaviour of children (either yours or someone else’s) then you’ll appreciate the need for a service created by The Kensington Hotel in London. The hotel are offering dining etiquette classes to 5-10 year olds which include, correct posture, cutlery handling, saying please and thank you and the do’s and don’ts of all dining situations from sandwiches and cakes to a full blown formal meal.

Now you might feel all of this is the parents job, but you only have to dine out a few times to realise that they’re just not doing it!. The hotel launched the service after surveying 2,000 parents and discovering that 48 per cent were embarrassed by their children’s table manners, and that 19 per cent have had to leave a restaurant due to their kids’ bad behaviour. Worrying about how their offspring will behave in restaurants is apparently the biggest cause of stress for 28 per cent of parents.

It sounds like there’s both a need and demand for this, and how hard can it be? Needless to say, one hotel in London can’t possibly cope with the potential demand for this. Every town and city in the UK could be the basis for a profitable enterprise in this field.

The Instant Drunk

You might argue with some justification, that the last thing the British need is help getting inebriated quicker, but a new invention from French and American scientists may have novelty appeal. It’s a  mouth spray that can instantaneously intoxicate a person for a few seconds without the harmful effects of alcohol. One spray from the “WAHH Quantum Sensations” device is enough for “a few seconds of intoxication,” according to its makers, French designer Philippe Starck and American scientist David Edwards. One spray amounts to 0.075ml of alcohol – the minimum quantity of micro-particles needed to trick the brain into feeling drunk.

I think this could be a big seller here in the UK. Perhaps something for an ambitious entrepreneur to investigate further.

Streetwise Property Alert 27th August 2013

Welcome to today’s email of news and views…

BTL Mortgage Update

Teachers Building Society has made changes to the criteria on its buy-to-let products. The rental calculation has been changed to 125 per cent of the mortgage payment at 4.99 per cent. It was previously 125 per cent at 5.74 per cent.

The restriction on the maximum number of mortgaged properties in a landlord’s portfolio has been moved from three to eight.

There is also a reduction to minimum earned income requirements for buy-to-let products to just £15,000 per annum. As always, do talk to a broker first. We can introduce you to brokers if you do not have one at the moment.

Best BTL Locations?

New research by Move with Us and Home.co.uk reveals their top 10 BTL locations – based on those locations that deliver the highest gross yields.

B7 (Birmingham), 10.6 per cent

TN28 (Kent), 10.5 per cent

L14 (Merseyside), 9.6 per cent

GU6 (Surrey), 9.5 per cent

TS1 (Middlesbrough), 9.2 per cent

B35 (Birmingham), 9.2 per cent

L4 (Liverpool), 9.1 per cent

RH4 (Surrey), 9.1 per cent

B18 (Birmingham), 8.7 per cent

EN8 (Hertfordshire), 8.7 per cent

Worth mentioning, of course, is that yield is only one criterion for savvy BTL investors. And a generic gross figure can be quite different from a specific net figure. The only yield figure that is is of any relevance is your own. Still, food for thought…

admin@streetwisenews.com

Wind Farm Impact

Had a pizza with my wife in a restaurant last night. At the end, the waiter presented us with two coffees. He then hurried back with a look of alarm on his face. He had forgotten to warn us they were hot drinks which, apparently, he has to do every time he serves ‘anything hot’. (‘That pizza is hot’, the garlic bread is hot…’ etc). Madness.

I thought of that this morning when I read that the government has commissioned a report to assess whether wind farms affect local property prices or not. It’s really stating the obvious – would you buy a property near a wind farm? No? Then there’s the answer – it affects property prices.

Frontier Economics is to examine the impact of a range of technologies, including onshore and offshore wind farms, shale gas, anaerobic digestion plants, overhead power lines, coal, gas, nuclear and biomass power stations and coal mines on local property markets. Clearly, these will all impact although, to be fair, it will be interesting to see by how much in hard cash terms. More to follow.

All for now – see you again soon.

The Milk Crate Farm

Restaurants across America have hit on a novel idea. Instead of buying in their vegetables from local farms, they’re growing their own on roof top gardens and bits of waste land near to their premises. How do they do that? By planting in old milk crates? As you might imagine, I know nothing about growing vegetables at all, let alone the process of growing them in milk crates,  but if it can be done in a busy city centre like New York or Los Angeles, it can surely be done pretty much anywhere.

Would it be possible for UK restaurant owners to ‘grow their own’ in this manner? I don’t see why not. Might it be possible for an entrepreneur without land or experience to set up a milk crate farm supplying local restaurants? Very possibly.

This would take a bit more research, but it sounds an interesting idea.

Streetwise Property Alert 23rd August 2013

Here we are at the end of the week with a round-up of overseas property news and views…

Upcoming Freebies For You

Our friend, international property lawyer Peter Esders tells us that he will soon have series of guides that we can introduce to members. These will include ‘Buying a property in Spain’, ‘Spanish Timeshare’, ‘Spanish Golden Visas’ and ‘Litigation in Spain’. We’ll keep you posted.

Sterling – Dollar Update

The pound takes poll position! Sterling was its strongest against the greenback since 19 June last week, at 1.5657.  How come? First, because UK recovery statistics sent the pound soaring. Second however, the dollar dived, as American industry suffered a sharp and sudden slowdown in July, which could convince Fed head Ben Bernanke to extend his economic stimulus (called quantitative easing). Given this, expect sterling to exceed this eight-week peak against the greenback soon! Exchanging soon? Email back for a free, no-strings chat with Pure FX.

US – A Balanced Recovery?

According to recent figures from analysts Core Logic, the US market is shaping up to achieve a balanced recovery. Anand Nallathambi, CoreLogic’s CEO, says, ‘Across the country, pent up demand and continued low interest rates are fuelling strong demand for a limited inventory of properties. We expect that trend to continue to drive up prices throughout the balance of the summer. June home price trends and forecasts were nearly all positive across the country. We saw quarterly, yearly and six month forecasts all tick up, relative to the past few months’ performance. These improved trends signal spring buying activity continues to have a positive impact, while our forecasts point to moderation ahead.’

‘Certainly this is an interesting and important dynamic unfolding and while it could seem contradictory at the surface, perspective lends clarity. Increasing gains are great news for homeowners and to be expected at this time of the year, when home buyers are typically most active. While there is a lot of buzz right now in terms of double digit housing gains, over the long run, we don’t expect to see the current rates of growth sustained. Keep in mind this is really not a bad thing. National growth for all of 2013 is expected to hit 6 per cent, lower than current yearly growth of 8.6 per cent, yet higher than historical norms between 4 per cent and 5 per cent. After more than a full year of recovery, we consider the current momentum and expected moderation a really healthy move toward a more sustained recovery.’

France – A Market Boost?

Following on from the news that the exoneration period for capital gains tax (CGT) will fall from 30 to 22 years from 1 September, Budget Minister, Bernard Cazeneuve, says there will be a temporary tax allowance of 25 per cent that will apply to sales between 1 September 2013 and 31 August 2014. Property agent Trevor Leggett of Leggett Immobilier offers a view.

‘The government are determined to boost property sales over the next 12 months. Last year France saw a 12 per cent drop in house sales down to 709,000 and this year we’ll see a further decrease. President Hollande recognises the danger this presents to the wider economy and has acted to halt the decline.’

‘Whilst these changes have still to be ratified by parliament I see this as a formality, although some of the detail still has to be clarified. Over one in ten UK buyers of French property now purchase their homes through Leggett Immobilier and I’m sure that they will be delighted that President Hollande finally seems to accept that the property market is the cornerstone of French foreign investment. We see this as a big step forward for the Hollande government and we are expecting a spike in sales from September onwards.’

Pound – Euro Update

Our friends at Pure FX write this week, ‘The pound goes for gold! Sterling hit its highest since 4 July against the common currency last week at 1.1756. Why? Because Britain is back in business with sales in Blighty’s shops soaring a super +1.1 per cent in July, easily exceeding expectations for a +0.6 per cent increase.’

What’s more, -29,200 fewer Brits claimed jobless benefits in July too, bolstering the belief that the UK job market is bouncing back. Given this, prepare for the pound to shoot up sharpish against the euro, as the UK economy at long last hits its stride!’ Email back if you’d like further sterling-euro analysis and outlooks.

Spain Property Sourcing

We have a new property sourcing agent! He writes, ‘I will say that we will check all complexes and properties out thoroughly before offering them to you, especially the prices, values and locations to make sure there is an immediate equity of at least 25 per cent on current prices and good rental potential.’

If you want to buy in Spain, do let us have your  requirements – type of property, price range and area/location etc. Let us have as much information as you can so that we can make sure we only offer you what you are interested in. Please note, serious replies only please.

All for today, see you over the weekend with some property introductions for all you investors out there.

admin@streetwisenews.com

Cocktails By Subscription

There seems little end to the number of possible subscription businesses out there, and here’s another one. Julibox is a subscription service that provides information and materials to make cocktails at home.

Subscribers pay $36 a month for a six-month subscription, which will provide a package containing recipes, spirits and mixers for two different types of cocktail each month.. The delivered ingredients are enough to make two of each cocktail and recipients can use their box as a way to entertain guests during a night in.

As we’ve said many times here before, subscription businesses give a continuity and certainty to income. What subscription business could you add to your money making portfolio?

Streetwise Bulletin 22nd August 2013

Welcome to today’s UK property news and views…

Mortgage Asap?

According to the Telegraph, ‘mortgage borrowers who want to lock into current low rates are being encouraged to act quickly as recent high rates in the capital markets are likely to drive up mortgage prices.’

It follows news that banks are pushing up interbank borrowing rates – i.e. what they charge each other – and that this will soon see higher rates for mortgage borrowers.

Ray Boulger of John Charcol is quoted as saying that ‘mortgage rates have bottomed out. Fixed rates are on the floor and for most people there is little or nothing to be gained by waiting.’ Time to act?

University Hotspots

A new survey by mortgage lender Landlord Centre suggests that would-be buy-to-let investors should look at university towns outside of London. The survey indicates that London yields are 5.7 per cent compared to 6.2 per cent nationwide (although, we should point out, you can generally expect greater growth in London).

The best yields, according to the survey, are in Leeds at 7.6 per cent, Liverpool at 7.4 per cent and Nottingham at 7.0 per cent. ‘While the potential for long-term capital growth is greater in London, you may get a similar monthly income from rent on a much cheaper property outside the capital.’ More to come on HMO investments in university towns soon.

Market Positives

For those looking for confirmation that the property market is moving back up – and that it’s time to buy in sooner rather than later – we note that asking price discounts are falling sharply according to Zoopla.

‘The proportion of properties on the market in the UK today with an asking price that has been reduced at least once has fallen from 37 per cent one year ago to 32 per cent today. And the average discount to the original asking price has come down from 7.6 per cent last August to only 6.3 per cent now.’

‘A fall in the proportion and level of asking price discounts suggests sellers are feeling more confident and happy to wait it out to achieve their target asking price. Banks, sellers and buyers are all more bullish about the state of the economy which bodes well for the months ahead. And the Bank of England’s forward guidance on interest rates has generated a greater sense of certainty about the future, which should lead to even more activity.’