Cash From Candles?

Web based businesses and opportunities are extremely popular these days, but some people are looking for something more real-world based – something involving good old fashioned products they can make and sell. Candles seem to offer an interesting opportunity.

Go back a couple of decades and the range of candles available was quite small. Today, the range of shapes, sizes, colours and scents is mind-boggling and it seems there is no end to the possibilities. What’s really interesting is that  candles lend themselves to small scale, home based production. Hit on a popular combination of  shape and scent and you could have the beginnings of an enjoyable and lucrative home-based business. The following site is a good place to start looking at the possibilities.

http://www.makingyourowncandles.co.uk

Streetwise Property Alert 28th March 2014

any of you are interested in buying off-plan property overseas. Here, to end the week, are some words of advice from Peter Esders…

Research the development, the surrounding areas and the town itself.

It’s easy to do some initial desk research towards your due diligence. There is plenty of official and unofficial information out there for you to read from your computer at home. You can Google.com and Yahoo.com for the nearest town to source official and other websites. From these, you can uncover estate agents and letting agents and tourist offices etc. Wherever you are buying, the developer and their agents will usually say something like “prices here are going up by xx per cent a year”. See if local contacts agree; and particularly those who do not have a vested interest in saying so. If you are buying into a development, visit it rather than buying sight unseen. You should not really buy anything without seeing it. Even if the website, brochure and specifications all look good, you need to see the area for yourself. You may find, for example, that there is a huge patch of land between ‘your’ development and the sea. That’s likely to be filled in by the time the development is completed.

Looking for fast profits from capital growth?

Make sure you Can sell the property onwards at completion. A developer or agent will often tell you that it is easy to sell the property on or around completion to someone else so that you only ever have to pay out for the deposit. This may be true – but equally, it may not be the case. Your solicitor – always employ a solicitor before signing anything – should check the contract to see that it is assignable as and when you want; and that there are no hidden-away restrictions. You should also research to see that the property will actually be in increasing demand on or around completion. There are always various ifs, buts and maybes than can occur between now and then. There may be many similar units coming to market at the same time. The development may be incomplete. The expected infrastructure may not have been completed. The low-cost airline may have stopped its regular flights. Work through the possible ‘what if?’ scenarios and be sure you can
handle the worst case situation.

Do some due diligence on the developer and their agents.

Most are perfectly respectable and honest, although you should always bear in mind that they are trying to sell to you. So you can expect them to highlight the positives. You cannot expect them to showcase any negatives. But you should not have to listen to lies and half-truths. You can start by making various checks to see if they are well-known and established, are registered in the UK (so they are covered by UK legislation) and don’t generate any negative comments when you Google.com and Yahoo.com for them. You should also talk to them and follow through on what they say. Some common comments that often turn out to be incorrect are as follows. “There is no problem getting a non status mortgage” is often stated, but not put in writing, prior to you paying a deposit. Read the small print early on. “A new golf course/marina/other major attraction is to be built close by soon” is a favourite – but the development never gets built and the expected wave of tourists never arrives. Visit the local town hall!

Seeking long-term lettings and capital appreciation?

Be sure you can rent the property out after completion. The developer and their agents will tell you that you can easily rent that property out for most of the year. Few will put that in writing though or make any sort of guarantee. Of course the developer and the agent are selling the property so you need to check what they are saying is correct. If an estate agent in the UK told you you’d let a property easily, you’d check with local letting agents first. You need to do the same in an overseas market. If you are holding on beyond completion, number-crunch your finances as it may take several months to find a tenant. That’s especially likely if the development and infrastructure are incomplete or, vice versa, the development is complete and many similar units are available to rent. With a holiday let, you will do well to get a 60 per cent occupancy rate over the year. Number crunch your finances with three, four and five void months and/or 60, 50 and 40 per cent occupancy. Talk to other investors with comparable properties to see what they achieve.

Always get your own independent, professional advice.

Increasingly, developers offer you a complete package; a mortgage broker, a surveyor, a solicitor, and so on. All you have to do is to pay the deposit! Everything else is done for you and you can sell on completion and recoup your deposit and more besides. If only it were that straightforward and easy! If you bought a property in the UK, you would source your own mortgage via a broker anD would have your own survey and valuation done. You would not rely on the seller of the property to provide this information. Nor should you overseas. Similarly, you would not use the seller’s solicitor (especially if they put 100’s of deals via the solicitor and you are only doing the one). You may hear comments such as “No, you don’t need an independent lawyer – everyone uses ours. It’s quicker and easier.” Your own English-speaking solicitor who is close to hand is a must. The developer or agents will tell you, for example, “Of course the property has planning permission”. Your solicitor will check!

More to come on off-plan buying and other ‘hot’ topics such as fractional ownership shortly. Do also let us know what topics most interest you, which countries, and so on.

The Evasive Alarm Clock

Sometimes you have to think beyond the obvious if you operate in a crowded market, or have a ‘me too’ product with no unique selling position. Clocky is an alarm clock with a difference. It’s on wheels and when the time comes for it to go off, it doesn’t just ring – it scoots off and hides! The owner has to get out of bed to find it before switching it off. This overcomes one of the major problems with ordinary alarm clocks – the owner switching it off and going back to sleep.

So is there a commonly experienced issue with the product or service you offer – and might there be a lucrative market to be had by offering a unique version of your product or service which tackles the issue head on. This will mean different things to different people, but it’s something for everyone to think about.

Streetwise Property Alert 27th March 2014

Welcome to today’s email…

Licences – More News

We don’t know how long it will take but we are pretty sure that the BTL/HMO licence issue is going to run and run, with more and more councils setting up schemes. There will come a day, not too far off, when you will have to get a licence from your local council when letting – and if you have, say, 12 BTLs across the county, you will need up to 12 licences.

Milton Keynes looks set to be amongst the next area to introduce licences according to local press reports. Let’s quote, ‘Licencing of the private housing sector could help Milton Keynes Council track landlords not doing their job properly. Councillors said that licencing would put HMOS not up to scratch more accountable and they felt landlords could easily afford it themselves without passing the fees on
to residents.’ More to come. Much more.

Value-Adders!

A good article has come over from MortgageIntroducer.com – good site, pay a visit – on increasing the value of property.

Space Is Key

Converting a loft can add instant value to a house. It may seem like a large project to take on but the returns for a conversion can take a property from a two bed to a three bed, which is a strong move. Dependent on property type and location this can cost anywhere between £15,000 – £80,000. This type of conversion has the potential to increase the value of a home by 10 – 20 per cent.

Central Heating

A home must be fit for purpose when it’s sold. Adding or updating the central heating system will add more to the value of a property than it costs. It will be considered a crucial selling point by most buyers.

A Lighter, Bigger Space

People who are looking to build a conservatory have the right idea about increasing the living area in their household in order to increase its value. The cost of a conservatory will set a client back between £3,800 and £10,000; averaging at around £6,236.

A Lick Of Paint

Getting potential buyers through the front door is a key factor. To give the outside a few coats of paint could cost anything from £100 to £1,000 (size dependent) but has the potential to provide a 400 per cent return on the initial investment. Painting the inside rooms a neutral colour will create a minimal clean feel, while giving the potential home owners a blank canvas to build an image of ‘their new home’.

Window Of Opportunity

Changing the windows can also be a solid way to guarantee value increase. However, bear in mind the windows must match the general aesthetic of the property. This visual aspect should factor into the decision process in this case. New windows have the advantage of insulation and contemporary design, however if the age and originality of the property requires a certain style of window your clients should be wary of jumping straight in as they could end up with a warmer yet uglier home.

A Lighter, Bigger Space

People who are looking to build a conservatory have the right idea about increasing the living area in their household in order to increase its value. The cost of a conservatory will set a client back between £3,800 and £10,000; averaging at around £6,236.

The Kitchen

As a showpiece this is a priority room. For many people the kitchen has evolved into the family room where most time is spent. The typical spend on a new kitchen is £8,000 but a good quality kitchen can be achieved on a much smaller budget. If money is tight and a full refit is not in their budget, suggest they consider changing certain elements of the kitchen such as cabinets and furnishings to give it a fresh new look.

First Impressions

It’s good advice to touch up the paint work and the flooring in the main reception room. Whether that is the corridor leading through to the house or the just the first room buyers step into. Sellers should de-clutter and create a tidy and presentable first impression for visitors. Many buyers are looking to move into a house that is ready and functional with little refurbishment necessary.

Knock Knock!

It’s amazing what people notice when they are viewing a property. The front door should tell them what they need to know about the interior of the house. It can make a big difference for your seller clients just by buying a new doorknob, letterbox or stainless steel house number.

This article came from Mortgage Introducer.com. Do check out the site now.

London – Some Figures

A five year outlook from Savills makes interesting reading; it suggests inner London boroughs will see 23.1 per cent price rises whilst other London locations will rise by 22.7 per cent. ‘The gap between prime central London and its prime commuter markets has probably peaked and wealth has finally begun to flow out of the capital. We have already seen the predominantly domestic markets of outer prime London out-performing prime central London over the past year and anticipate that 2014 will be the year when the value gap between London and the lead suburbs and prime inner commuter belt finally begins to narrow. ‘

‘A number of risks to the prime London markets, most particularly around Eurozone default, have receded over the past two years. But because the taxation of high value property is likely to be a contentious policy issue in the run-up to the 2015 general election, a lull in price growth in the period prior to polling day is expected.’

That’s it, see you on Friday.

Praying To Lose Weight

I recently read about a church in Los Angeles (where else) which is offering weight loss advice and support to it’s attendees alongside spiritual guidance. I’d imagine the rationale behind this is that converts are difficult to come by, and anything that  gets people through the door has to be a good thing.

Businesses face the same problem as churches – how do you attract more customers? Perhaps what this LA church teaches us is that it can be fruitful to look beyond our core offering, and find something else that we know our customers want. Give them that, and there’s a good chance that they’ll end up buying what we really want to sell. So what could you offer prospective customers to get them in through the door?

Streetwise Property Alert 26th March 2014

Many of you are interested in buying off-plan property overseas. Here, to end the week, are some words of advice from Peter Esders…

Research the development, the surrounding areas and the town itself.

It’s easy to do some initial desk research towards your due diligence. There is plenty of official and unofficial information out there for you to read from your computer at home. You can Google.com and Yahoo.com for the nearest town to source official and other websites. From these, you can uncover estate agents and letting agents and tourist offices etc. Wherever you are buying, the developer and their agents will usually say something like “prices here are going up by xx per cent a year”. See if local contacts agree; and particularly those who do not have a vested interest in saying so. If you are buying into a development, visit it rather than buying sight unseen. You should not really buy anything without seeing it. Even if the website, brochure and specifications all look good, you need to see the area for yourself. You may find, for example, that there is a huge patch of land between ‘your’ development and the sea. That’s likely to be filled in by the time the development is completed.

Looking for fast profits from capital growth?

Make sure you can sell the property onwards at completion. A developer or agent will often tell you that it is easy to sell the property on or around completion to someone else so that you only ever have to pay out for the deposit. This may be true – but equally, it may not be the case. Your solicitor – always employ a solicitor before signing anything – should check the contract to see that it is assignable as and when you want; and that there are no hidden-away restrictions. You should also research to see that the property will actually be in increasing demand on or around completion. There are always various ifs, buts and maybes than can occur between now and then. There may be many similar units coming to market at the same time. The development may be incomplete. The expected infrastructure may not have been completed. The low-cost airline may have stopped its regular flights. Work through the possible ‘what if?’ scenarios and be sure you can handle the worst case situation.

Do some due diligence on the developer and their agents.

Most are perfectly respectable and honest, although you should always bear in mind that they are trying to sell to you. So you can expect them to highlight the positives. You cannot expect them to showcase any negatives. But you should not have to listen to lies and half-truths. You can start by making various checks to see if they are well-known and established, are registered in the UK (so they are covered by UK legislation) and don’t generate any negative comments when you Google.com and Yahoo.com for them. You should also talk to them and follow through on what they say. Some common comments that often turn out to be incorrect are as follows. “There is no problem getting a non status mortgage” is often stated, but not put in writing, prior to you paying a deposit. Read the small print early on. “A new golf course/marina/other major attraction is to be built close by soon” is a favourite – but the development never gets built and the expected wave of tourists never arrives. Visit the local town hall!

Seeking long-term lettings and capital appreciation?

Be sure you can rent the property out after completion. The developer and their agents will tell you that you can easily rent that property out for most of the year. Few will put that in writing though or make any sort of guarantee. Of course the developer and the agent are selling the property so you need to check what they are saying is correct. If an estate agent in the UK told you you’d let a property easily, you’d check with local letting agents first. You need to do the same in an overseas market. If you are holding on beyond completion, number-crunch your finances as it may take several months to find a tenant. That’s especially likely if the development and infrastructure are incomplete or, vice versa, the development is complete and many similar units are available to rent. With a holiday let, you will do well to get a 60 per cent occupancy rate over the year. Number crunch your finances with three, four and five void months and/or 60, 50 and 40 per cent occupancy. Talk to other investors with comparable properties to see what they achieve.

Always get your own independent, professional advice.

Increasingly, developers offer you a complete package; a mortgage broker, a surveyor, a solicitor, and so on. All you have to do is to pay the deposit! Everything else is done for you and you can sell on completion and recoup your deposit and more besides. If only it were that straightforward and easy! If you bought a property in the UK, you would source your own mortgage via a broker and would have your own survey and valuation done. You would not rely on the seller of the property to provide this information. Nor should you overseas. Similarly, you would not use the seller’s solicitor (especially if they put 100’s of deals via the solicitor and you are only doing the one). You may hear comments such as “No, you don’t need an independent lawyer – everyone uses ours. It’s quicker and easier.” Your own English-speaking solicitor who is close to hand is a must. The developer or agents will tell you, for example, “Of course the property has planning permission”. Your solicitor will check!

More to come on off-plan buying and other ‘hot’ topics such as fractional ownership shortly. Do also let us know what topics most interest you, which countries, and so on.

Flat Flowers

One the occasions I have  arranged for flowers to be delivered, one thought always dominates – will the recipient be at home to receive them? It’s a common problem, and the issue behind the business idea of  Bloom and Wild, a company that deliver flowers in letterbox sized packaging. The advantage is obvious – the recipient doesn’t need to be home to receive the flowers.

I don’t know exactly how this works, and it must certainly restrict the flowers that can be included, but it does overcome one of the big problems with sending flowers, and may well encourage a customer to  use the Bloom & Wild service rather than a competitor.

So are there other products which could be redesigned or repackaged to fit through a letterbox?  And if you did that, would it provide a competitive advantage? Something to think about.

Streetwise Property Alert 25th March 2014

Welcome to today’s email of news and views…

Latest BTL Scam

‘Scam’ may be too strong a word but, from emails received from members this week, a pattern is emerging. See if this rings any bells. You are offered a BTL unit at an excellent price, no need to do any due diligence, no need to use your own lawyer, no need to even visit (d’uh, d’uh, d’uh) – it’s a perfect armchair investment. All you have to do is pay some money…a reservation fee…some mortgage and legal fees etc, no more than a few thousand, and it’s all yours!

Now, here’s what seems to be happening – a survey is carried out (at your expense) and the report comes back at £10,000 to £20,000 below the stated priced. Oh dear. Well, I never. Can we have our money back – the reservation fee, the mortgage and legal fees etc. A deathly silence…

If you are offered a BTL deal here’s what you do (I feel I need to speak very slowly and loudly here). You read what’s sent to you. You do your own desk research, zoopla, google maps etc. You visit! Go and see it – talk to estate agents and letting agents locally. Take some advice. Do your due diligence. Have a lawyer in place. Everything stack up? Not too good to be true? Then you look at proceeding and not before…

Rents – Onwards & Upwards

Move With Us reports that nine of 11 UK regions are seeing rising rents – the national average advertised rent is now £923 per month, up by more than £20 on February 2013. Advertised rents in Scotland saw the biggest increase of 3.96 per cent on the year, with the average now at £695.

‘2014 is shaping up to be a good year for landlords with rents increasing in most regions. The Council of Mortgage Lenders (CML) recently announced that gross mortgage lending was an estimated £15.5 billion in January 2014, a third higher than the same time last year when it was £11.6 billion. It’s likely that many of these mortgages have been granted to buy to let investors as we have seen a growing trend for people investing in property instead of using low performing savings account.’

‘The best places for investors however, aren’t necessarily where average rents are the highest but rather, the places with the highest rental yields. This means that, for example, the high rents in Greater London may be deceiving from an investment point of view. Rental yields actually tend to be better in places where property prices are lower like the North East, and the Midlands,’ he explained.

‘Any aspiring buy to let landlords looking to invest in property should follow the golden rules of finding a place with a good rental yield that is in a nice area and is close to local amenities and transport links. Landlords should also check that the property can easily be upgraded to meet the legally required energy performance rating that will be introduced in 2016.’ Food for thought but, of course, let’s not forget capital appreciation is as much a factor for many investors as rental yield.

Newcastle, Sunderland & Durham

I’m familiar with the Newcastle, Sunderland, Durham market not least because I looked to buy an apartment there when my daughter, Sophie, went to Durham University in 2011. I’ve kept up my research ever since, visited often, and regularly check what is coming through the system – at present, some expensive units in Durham (close to University), some okay-ish apartments in Newcastle and (in our view) not very good units in Sunderland!

We are, from April, going to do a region-by-region report for would-be buy-to-let investors and I think we will start with this corner of the North-East where there seems to be a lot of supply coming through, some is rather good and much is rather bad from what we can see. If you are looking to buy here, drop us a line for a free report, out around 9 April. You will need to register to receive this.

All for now, see you soon.

Part Time Love

If you’ve been reading this newsletter for any length of time, you’ll know that we often refer back to the growth of the dating market, and the myriad of different niches therein. The latest thing we’ve seen is a website called PartTimeLove.co.uk which connects partners who don’t have the time or inclination for a full time relationship. The site attracts people looking for friendship, affection and intimacy but without the expectation that the relationship will lead to marriage or moving in together.

Twenty years ago, the dating market was very one dimensional. Today there are agencies and websites for widely varying expectations and needs. It’s almost certain though,  that there are still criteria not catered for by current services. Why not see if you can come up with one?

Streetwise Property Alert 24th March 2014

Our latest update is in from Peter, a.k.a. Mr Mortgages. Email back to talk to him.

admin@streetwisenews.com

The Budget

Not much of interest for mortgages and property in the Budget except the Help to Buy scheme has been extended from 2017 to 2020. I personally think that once the government started interfering with the property market, they will not be able to withdraw, putting the element of risk on the taxpayer instead of indemnity insurance companies. (You have to ask yourself, “Why would the insurance companies not underwrite the percentage of lending above 75 per cent loan to value of a client’s mortgage”. They used to; clients were charged an insurance premium such as ‘mortgage indemnity guarantee premium’ or ‘high loan to value premium’. Could it be the risk factor do you think? ). The other changes in the budget included an attack on people buying in a company structure. This especially affects offshore purchasers for high value property in London as they will now pay stamp duty land tax at higher rates than before. The general view is that prices in London may dip a bit when this comes in but will recover quite quickly.

I suppose there is a significant benefit on the horizon when people can get at their ‘pension pots’ in 2015. I can see many disenchanted pension investors pulling funds out as soon as they get to 55 and investing in property, which will strengthen the property market at the same time as providing the government with tax revenue and pushing up the money supply in the economy. Additional capital and business incentives were announced and together with the improved economic forecasts suggest that ‘affordability’ will start to rise for the first time in several years, again good for the property sector making rents and mortgage payments more attainable.

Off Plan Caution

Are you considering buying new build apartments as ‘contracts off plan’ where they should be completed in a year or two’s time? Selling agents are promoting many new developments with nice glossy brochures and detailed models and even a demonstration suite kitted out on site. Most agents offer a professional attentive service where you are cocooned within a pleasant suite of offices to discuss your purchase. However, remember, they work for the developer, not you, and do not be afraid to haggle.

Also be aware that once a new build has been sold, it tends to lose value (the new build premium goes when completed as the property is now classed as secondhand, a bit like buying a new car). This can be offset by buying ‘off plan’ where the deal is a genuine discount on today’s prices with the hope that, over the time it takes to complete the build, there will be an increase in value. However, you need to be careful here, If a large percentage of the new build is being sold off plan then, when they all complete, those contract purchase prices will be registered at Land Registry and that would be the open market value at completion as far as surveyors are concerned.

On the mortgage front, there are still some lenders that will allow 5 per cent grifted deposit from the developer on new builds, so this could be incorporated in the pricing structure to enable mortgage percentage to fit price. In short, completion finance would most likely be available (subject to changes in interest rates and product criteria ) Think the potential investment through and do your research of comparable values in the site post code and within ¼, ½ and mile radius, easy to take a look at Zoopla and Rightmove. Then assess the risk, do your homework. If, for some reason, suitable mortgage finance is not available to you at the time of completion (e.g. your circumstances change or no mortgage products fit) you could lose not only your deposit and reservation fee but the developer could sue you for breach of contract for the balance of price (very stressful, unless you can get a clause in the contract for sale that says, ‘subject to suitable finance being available’ to you – which is unlikely the vendor will allow. In addition, make sure there is a ‘long stop’ clause in the contract, this basically says that if the developer fails to complete the development within (say) six months of the target date, they will be in breach of contract and must pay you back you deposit and reservation fees with interest. (Again. many developers try to avoid having this in the contract).

Developers often offer cashbacks and other incentives (such as white goods, stamp duty and legal fees gifted deposits etc.) However all lenders now require a CML declaration form (provided by the Council of Mortgage Lenders) of all incentives and may deduct the aggregate value of these incentives from the price when calculating their maximum lending (loan to value). Some lenders will allow white goods, legal fees and stamp duty paid by the developer, but not all.

Generally, investors for new build, especially apartments, aim to get at least 15 to 25 per cent off the listed price, especially if they are registering to buy more than one apartment. It would be wise to instruct a major professional RICS surveyor firm to do a ‘desk top’ valuation on the basis of ‘if the apartment completed today, what would be the open market value?’ This will cost you a valuation fee, but you would then have a clear idea of value verses price before you commit and could save you thousands or confirm you have a good prospect.

Don’t get me wrong, I am not trashing new build apartments and the buying off plan process, there can be some good deals in a rising market, but there is much to consider and more risk involved than buying built property. When our existing clients are looking to buy, new or built properties, we carry out initial research for them and provide our ‘view’ at no cost (This is not indemnified professional advice under our indemnity insurance protection policy, but simply, from years of experience, our opinion. Some of our clients are re-mortgaging to release funds for their deposit on an off plan contract, having done their research of course. Next week, by the way, I will be looking at the buying at auction process.’

Want to talk to Peter? Email back and we will put you in touch.

admin@streetwisenews.com