Waiting In

If you’ve ever had to wait in for a delivery or a repair man, you’ll be only too aware how frustrating and annoying it can be. There are so many better things you could be doing. Well that’s where London based Waitingin come in.  For a fee, they will (as the name suggests) wait in for your delivery or repair man to turn up. The company take both half and full day bookings.

The hassle of domestic appointments isn’t confined to London, so this could work in any area where there are busy professionals with neither the time nor inclination to hang around waiting for that new mattress.

Streetwise Property Alert 17th October 2013

Welcome to today’s email…

BTL Basics

According to Strutt & Parker, a key part of successful BTL’ing is to set funds aside to re-invest in the property so that the chance of void periods is dramatically reduced and returns on the investments are maintained. ‘If you regularly maintain your rental property on an annual basis, even when your tenant is situ, then overall you are likely to spend less than a major upgrade every three to five years. You are also sending a clear message to your tenant that you are a conscientious landlord that cares about them and the property. They in return are likely to look after your investment and appreciate their surroundings and do their very best to keep your property in immaculate order.’

‘We do have a few clients that have enjoyed healthy rent increases over three to five years linked to RPI without doing much to their property during the tenancy. When the property comes back to market, they are shocked to learn that they need to spend significant funds in order to support the same level of rent achieved before. Like any investment the return can go up or down and you wouldn’t run any other assets dry and expect to maintain the same level of return. It is the same with rental property. You need to keep aside sufficient funds to upgrade and reinvest in order to optimise the returns.’

Chicken or Egg?

We often talk about buying into an up-and-coming area and the signs to look for. Going ‘crane spotting’ is a favorite amongst some members. Others go looking earlier on the news of (whispered) regeneration activities. Many, too many, leave it too late to profit from rapid growth as they wait until every key measure is in place and easy to spot.

An article in London’s Evening Standard this week makes interesting reading. It states, ‘Living near a quality restaurant could boost your home’s value by up to 20 per cent. Estate agent Wetherell analysed home values in five of the six districts which comprise the West End — Mayfair, Marylebone, Fitzrovia, Soho and St James’s. They then compared property values with the number of Michelin-star restaurants, other restaurants and fast food outlets. West End homes near fast food outlets ‘underperform’ average growth by as much as 15 per cent.’

It’s a chicken and egg, which comes first, argument; do restaurants move in before an area improves and help to push up prices? Or do they come in afterwards and become a sign that the area has ‘made it’? Either way, it is as we often say, no pun intended, food for thought.

 

Home Extension News

If you are extending a property with a view to capital appreciation, you need to give some thought to the do’s and don’ts. Whathouse.co.uk has a good article on the subject this week. I’ll quote the start to see if it interests you. If it does, visit the site. ‘Recent changes in regulation in the UK have made it easier for homeowners to build extensions without the need for planning permission. The Growth and Infrastructure Bill means home extensions are now within permitted development rights. However, changes have been made to the initial proposal put forward in 2012 with an amendment that means that neighbours must still be consulted. To find out whether you need planning permission, for information on how to apply and guidance on building regulations in England and Wales visit the Planning Portal.’ We do, by the by, have an updated article coming on extensions – what adds most value and what does not.

All for now, see you tomorrow.

DIY Ice Cream

How do you create some interest around a fairly generic product? Well one way is to get the customer involved in the production process.

Peddlers Creamery in Los Angeles sells ice cream. Rather than have their churns powered by mains electricity, they get their customers to contribute directly by pedalling on the in-store bicycle. This is connected to a device which turns the churn. Aside from saving electricity (and boosting the companies eco credentials) the idea gets customers really involved and connected with the product they’re consuming – and it can’t do their waistlines any harm either.

So let me ask you this, is there some way you could get customers more actively involved in the production of your product?

Streetwise Property Alert 16th October 2013

If you are reading this, I’d assume you are looking to buy or sell overseas property investments. As such, Peter’s latest monthly currencies review is a must-read…

Sterling came up trumps against almost every currency out there in September, as the UK continued to expand at the fastest pace in the developed world.

The US dollar fell sharply, as the US shutdown for the first time since 1996, as Republicans and Democrats failed to agree a federal budget.

The euro remained under pressure in September, as unemployment remained at crisis-levels of 12.0 per cent and Germany showed signs of slowing.

The kiwi dollar broke the trend by gaining against the pound as the RBNZ said it would raise interest rates in 2014, the first developed country to do so since the financial crisis.

Sterling

The UK and sterling, at the top of the world! The pound hit nine-month highs against the euro and US dollar in September and three-year highs versus the Australian and Canadian dollars, as the UK outpaced virtually every other developed economy out there.

For instance, Britain’s manufacturing and construction sectors expanded at a blistering pace, while house prices increased at their quickest since 2007. Moreover, there are signs that wages are catching up to inflation, having expanded 2.7 per cent in August compared to a year
ago.

Given this, it’s no surprise that Bank of England governor Mark Carney told the Yorkshire Post that he no longer sees any need for additional stimulus. And it’s no surprise that sterling is leading the pack!

Euro

Sterling hits the magic number! The pound briefly touched 1.20 against the euro recently as the good economic news out of the UK continues to pour in, while the Eurozone remains on the back foot. For instance, unemployment in the currency bloc still stands at 12.0 per cent.

Moreover, both manufacturing output and retail sales slowed in Germany last month which bodes ill for the Eurozone’s main engine. Lastly, the European Central Bank held rates at just 0.5 per cent emergency levels. With all this in mind, sterling should retain its edge against the common currency!

US Dollar

Washington’s loss is sterling’s gain! The pound flew to 1.6260 against the US dollar recently, close to its highest against the greenback all year. Why? Because the US government has officially shut down as Democrats and Republicans fail to pass a budget for 2014. The shutdown is said to cost the US economy $300 million a day and brings considerable uncertainty to businesses and investors. Little wonder then that the US dollar has fallen and sterling gained.

Australian Dollar

Sterling stood head and shoulders above the Aussie dollar last month, reaching 1.7413, close to its highest since 2010. This is chiefly because Australia’s economy continues to stumble. For instance, there’s talk the Reserve Bank of Australia will cut interest rates below their already-record low of 2.5 per cent to stimulate growth. Meanwhile, factory output in Australia’s biggest trade partner, China, stagnated in September, which will also keep Australia (and the Aussie) on the back foot.

New Zealand Dollar

New Zealand storms ahead! Sterling fell -5 cents against the kiwi dollar in September as good news rolled out of New Zealand like Cumberland leek sausages out of a gourmet slaughterhouse. For instance, New Zealand is set to expand 2.0 per cent in the last six months of 2013, faster than any other industrialised nation on earth. Moreover, the Reserve Bank of New Zealand has plainly conceded it’s extremely likely to raise interest rates next year, again, a first for an industrialised nation since the financial crisis.

Canadian Dollar

The pound comes up trumps! Sterling hit 1.6688 against the Canadian dollar last month, its strongest point since February 2010. This is because Canada finds itself spinning its wheels, economically speaking at least. For instance, Canadian households are extremely indebted which prevents them from spending Canada’s economy into growth, while Canadian oil sells at a deep discount, because of the high transport costs involved. Given this, it’s advantage sterling!

Brazilian Real

Brazil strikes back! Brazil’s central bank intervened to prop up the real in September, resulting in sterling falling -1.37 per cent. Why this intervention from the Banco Central do Brazil? Well, the real initially fell on speculation the US Federal Reserve would end its monetary stimulus program, by which billions had flowed to Brazil. In the end, the Fed maintained its stimulus but Brazil decided it had had enough of the value of its currency being determined by the United States, resulting in the current intervention.

Turkish Lira

Like home-baked bread, the pound just keeps rising! Sterling reached 3.2817 against the Turkish lira in September, its highest in more than 10 years. Why? First, because Turkey has cut back its 2013 growth forecast to just 3.0 per cent, just a third of the pace it was enjoying three years ago. Second, because the continuing prospect of conflict with Syria means investors are avoiding Turkey, with which it shares a border. Given this, confidence in the lira is at a low, and that’s good for the pound!

We will have Peter’s weekly review – sterling, euro, US dollar – shortly. See you again soon.

This Product Has Its Knockers

At first I thought this was a joke, but apparently not. Inventor Elena Bodnar has developed a bra that doubles up as a gas mask. She witnessed the devastating effects of the Chernobyl disaster and realised that many people could have avoided radiation sickness, had gas masks been readily available. When extolling the virtues of the products, she points out that because women have two breasts, they can also save someone else. According the article I read, a counterpart device for men is in development. Quite frankly, I’m not sure I want to think about that!

I’m really not sure about this one, but there’s no doubt that products with more than one use, can carve out their own profitable niche in many markets. Could you develop a multi-purpose version of your product?

Streetwise Property Alert 15th October 2013

Welcome to today’s email. It’s been a week or two since we have run an article and we’ll change that today. Lots of new members have been asking for BTL advice this week and Mick Rawlinson has been in touch this afternoon to tell me about the due diligence that’s being done for the JV opportunity that many of you are signing up to. Put the two together and here we have an article from Mick on the first stages of due diligence when entering into buy-to-let investing…

The Price Is Right

Always remember the price needs to be right. When it comes to property investing, we are always being told ‘location, location, location’ is all that matters. It’s very important but in terms of ‘the deal’, price is your bottom line. You need to buy low so that you lock in some readymade capital and generate a decent yield straightaway.

Getting your due diligence right is extremely important. We dedicate a minimum of three clear working days to due diligence before being certain the property ticks all the boxes – and we will go through some 90+ processes. We are happy to send readers our checklist of 90+ points on request.

Early on in your due diligence, you need to identify the price and use that information wisely. The first place to start is from the comfort of your own armchair. The internet is where everyone starts researching almost any subject these days and it’s no different for property investment research. There are many websites offering quality information. Let us tell you about the ones we use.

Sourcing Historical Data

To begin with, we’d suggest you go to NetHousePrices.co.uk. Enter the postcode of the property you’re looking at. You will then see a list of addresses that have sold in the surrounding area and the prices achieved for these properties.

The most reliable data is about similar types of property that have sold in the last six months and are as close as possible to your target property. Bear in mind that some streets have a mix of, often quite different, properties. You should really be looking for three or more good examples of ‘sold’ comparable properties and prices.

By the by, if you buy this property with a mortgage, the lender will send out an RICS valuer to check the value of the property and this is the process they will follow. So, by following the same process yourself, you will reduce the risks of not getting a mortgage because you over-valued the property by taking the agent’s views at face value.

Check Asking Prices

Once you’ve got your recent data, go straight to www.rightmove.co.uk and enter the postcode of your chosen property. What you are now doing is to look at current asking prices. You might start your search by asking for ‘this postcode only’, identifying the property type, number of bedrooms and a realistic price range.

Leave the other boxes as they are for now but do tick the box to include ‘under offer and sold STC’ (subject to contract). As you go along, you can refine your search to achieve the best data, only showing the properties next to or near to yours and of a similar type and rolling out from there.

The results will give you an idea of what other people think their property is worth – but note that this is not always the same as what the buyers think it is worth. The asking prices are subjective and may not even be close to what the vendor is prepared to accept as their
bottom line.

Do Please View

Always remember that you must see what you are buying in person. Most buy-to-let lenders will now ask if you have seen the property for yourself; so do so. Meet the vendor and ask lots of questions; how long have they lived there, why are they moving, who are the neighbours, what work have they done to the property, what’s the parking like, where are the bus routes, the nearest shops etc?

Ask yourself, is it a practical place to live in terms of access to amenities? Are there any issues with the neighbours? Most important is the seller’s reason for moving. Are they a particularly motivated seller? Don’t be afraid to ask difficult questions because this is a serious investment you’re making and you need to know everything.

Go for a walk round the surrounding area. Are other properties in a good state of repair? You’re trying to establish if this is somewhere a tenant will want to live. Get a feel for the market value by comparing, say, the nearest three similar properties. Once you’re happy with your price assessment, this will be the starting point for your negotiations.

Get More Advice: Email back for the checklist and, if you have not yet asked for it, our free property investing course.

admin@streetwisenews.com


All for now, see you again soon. The UK and overseas newsletters are being proofed as I write and should surface shortly. Sorry they’re late – it’s been a hectic month so far.

Online Marketing For Free

There’s a lot of fuss and mystique built around online marketing, but it needn’t be that hard or expensive to implement. The truth is that many of the best tools are free.

For social media, Facebook, Twitter and  Youtube are all free to use  and can be linked back to your website. For public relations, there are tools such as Hootsuite, and Google Alerts. HARO and reporter connection put you in touch with reporters who are looking for sources for their articles.  Google Analytics and Adword  Analytics show you how many people  are coming to your site and where they’re coming from. And it’s all there for free.

It’s never been easier to do your own online marketing and it can cost nothing to give it a try.

Streetwise Property Alert 14th October 2013

The Brazil Seminar – London, 21 November, evening – is filling up steadily. I would urge you to book your ticket +1 (+1 whilst available) asap. Email back. The next will be in January if you miss this one.

Never Mind The Balearics

Here’s a new service – we have, for some time, been running several small services for serious and active investors; Paris, London etc. We are looking to add to these in 2014 and may start with the Balearics.

Why? Quite simply, there is huge demand for certain sectors – as one headline reads this week, some parts are as popular as Prime Central London.

Daniel Chavarria Waschke of Sotheby’s International Realty says, ‘Due to ease of access from most northern European cities, more than 80 per cent of our buyers are not Spanish. Looking at the year to date, half of all our enquiries are from British and Germans buyers, 34 per cent and 21 per cent respectively for Mallorca and 40 per cent and 10 per cent for Ibiza.’

‘They are placing high value on location alongside quality of construction, a considered layout and a superior level of decor. Tastes are more refined and budgets seemingly limitless, but supply is relatively low, hence the surprisingly high property values we’re now experiencing on the Islands.’

‘Whilst the assumption may be that it’s Russian or Middle Eastern buyers who have been spending an average of €9,000 a square metre on property with us this year, that’s not the case. In fact two thirds of our purchasers have been British, with German, Swedish and the occasional Far Eastern buyer making up the minority third. British certainly feature very strongly in 2013. Whether the balance will switch further afield to China, Hong Kong and Russia when Spain’s new golden visa legislation takes affect remains to be seen.’ If you’d be interested in this new service, do let us know.

Turkey – Quarterly Visits

We are, from the New Year, going to be starting quarterly visits to Turkey for those who want independent and informative inspection trips.

As with all of our smaller services, these are paid-for (i.e. members pay to join) – this is simply to deter the freebies brigade and all monies are refunded in full if you go on to purchase. And, of course, the discounts negotiated for you will far exceed any costs anyway.

Why Turkey? It’s simple supply-demand economics. Haluk Sur, chairman of Cushman & Wakefield Turkey describes it as a ‘huge opportunity’ because Turkey needs to build 15 million properties by 2023 to meet population growth whilst, at present, only 500,000 are being built each year. We are, of course, talking investing to house the home market rather than holiday-makers. Again, let us know if this interests you.

Canada – More Positives

We note that the Canadian Real Estate Association, CREA, has upgraded its forecasts for 2013. Sales are expected to reach 450,000 units in 2013 and prices are tipped to rise by 3.6 per cent to $376,300 in 2013. Next year, sales and prices are expected to rise further.

As ever, Canada is a market where sub-markets skew the bigger picture. ‘The environment for home prices in Quebec, New Brunswick, and Nova Scotia will likely be shaped by ample inventory levels relative to sales. The balance between the two indicates that buyers have an abundance of listings from which to choose in those provinces, which could keep pricing prospects in check until sales draw down inventories.’ More to come at Lifestyle Property Alerts.

Lots of replies for Detroit! We cannot guarantee you will get any of those listed yesterday but we can guarantee there are other deals coming in, most of which are never revealed to the general membership. Email back to get towards the front of the queue.

admin@streetwisenews.com

Advertising On Water

We recently came across an interesting advertising medium that could be utilised in a wide variety of locations.

I’ve seen advertising on cars and I’ve seen it towed along by light aircraft, but I don’t think I’ve seen a floating billboard before. The company I came across, Sliders Inc, mount billboards on small boats and then take them on small fuel efficient boats, along the coastline. The company operate outside the swim-zone and by keeping speed down to 5mph, minimise noise and pollution, but maximise exposure. Judging by some of their clients (MacDonald’s, Mitsubishi, Disney and Red Bull) the business is a success.

Sliders Inc operate in the US, but could the same thing work here? Possibly and why stop at the sea? Might there be an opportunity to roll out the concept to lakes and other waterways?

Streetwise Property Alert 11th October 2013

It’s been such a hectic week – four days on the road with members – that we have run out of time without having sent you a free property-related, share investing report or the UK PDF newsletter for October. These will follow shortly. Meantime…

Read The Small Print

We mentioned the rate rise coming for some BTL investors with The West Bromwich and several members have been in touch to make similar points for fellow members – read the small print before signing up for a mortgage product. The small print is so often overlooked in the rush to get a deal together.

As The West Bromwich has told clients, ‘The West Bromwich has advised a number of buy-to-let borrowers who have tracker mortgage accounts with the West Bromwich Mortgage Company that their rates of interest will be increasing by 2 per cent from 1 December 2013. All borrowers affected are landlords of multiple property portfolios. These changes, which are permitted under the terms and conditions of the accounts, are a reflection of market conditions and the need for us to carry out our business prudently, efficiently and competitively.’

Free Will Check

An email exchange with Peter Esders at Judicaregroup.com makes shocking reading for those without a will. Peter writes, ‘I was out of the office yesterday at the funeral of a friend. It turns out that, despite my advice, he did not make a will, although I know that he had intended to do so. His Dad only died a couple of years ago aged 98 and he obviously thought that he would carry on in the same way but sadly suffered a heart attack whilst playing tennis.’

‘Unfortunately, the lack of a will is now causing a problem for his family. Just thought that this would be a real life reminder to your readers to make a will.’ Noted. Email back if you are interested in making a will or having a free will check; we will introduce you to our friends, David and Jeannie.

Are You Insured?

One of the services we plan to offer – when we get some more time – is a set of checklists of different BTL-related subjects. One such subject would be insurance which seems to be overlooked by many landlords. Recent data from insurance provider AXA, yes we know, suggests around one in four landlords have the wrong or no insurance and that around three quarters of these have bought regular household insurance instead of a commercial policy.

Darrell Sansom at AXA Business Insurance says, ‘While many of these people may well have never intended to become landlords and possibly it is something they would rather not have to think about, the consequences of not sorting out some of the basic admin and putting some core protection in place could make it a much bigger headache for them than it already is.’ More to come; we will do a checklist in the next week or so.

All for now, other than to say that, for overseas members looking to buy into the UK, we are expecting a monthly currencies review – all major currencies covered – later today. Email back if you would like to receive that.

admin@streetwisenews.com