From some angles, the UK property market has never looked busier – but how do you learn to get into it and make a profit?
Despite the coronavirus lockdown – or perhaps because of it, if you take into account pent-up demand and the incentive of the Stamp Duty holiday – the UK property market has never been busier. As Property & Home’s celebrity guest editor Martin Roberts says, “The UK property market will not stop for any pandemic due to the simple fact that people need somewhere to live.”
But understanding it properly and being able to take advantage of the opportunities that exist isn’t easy. So how do you educate yourself about the ins and outs of what can be a complicated, stressful and confusing business?
With his book The Property Auction Guide Martin Roberts has been passing on pearls of property wisdom for many years, and for a more personal approach, he also developed training courses under the banner Making Money From Property and the 12-part online Property Auction MasterClass course which covers everything you need to know about buying and selling property and land at auction.
While it’s not been possible to present courses during the coronavirus pandemic, Martin continues to educate ordinary people with free one-hour introductory webinars to give an insight into this proven training programme, and equip people with the tools and support to develop their winning property investment strategies.
“We live on an island with a limited supply of homes” says Martin. “Since the re-opening of estate agents post lockdown there has been a surge in activity. There’s lots of talk around how the market may perform, what the lifting of the ban on evictions will mean, changes to planning regulations and much more. It may seem to be an uncertain time and it’s easy to feel daunted by this fast-changing landscape. That’s why we are have been continuing to education ordinary people on how to navigate the market and take advantage of the opportunities that exist.”
In his webinars, Martin introduces subjects such as:
* Why banks and building societies are desperate to unload the mountain of bargain properties on their books fast
* Everything you need to know about investing in property at auctions
* The quick and easy ways to decide instantly whether or not to bid for a property
* Three simple sums you can use to work out the profit potential of your target property
* The sneaky tricks auctioneers use to “rev up” auctions, and inflate the price to trap the unwary Investor
* The best auctions to buy property at (and which ones to avoid like the plague)
* The only three kinds of property you should ever considering investing in.
…and plenty more tricks and tips. You can find out more at www.martinrobertspropertyeducation.com.
Like all investments, the property market can be a bit of a gamble – no one could have predicted the coronavirus pandemic, for instance. But again, the basic principle of ‘buy low and sell high’ always applies, and with careful management a single property, or a portfolio, can be made to pay off.
There are three basic property investment strategies:
- Buying off-plan
So which of these strategies look best in the current environment?
Over the last 20 years or so, buy-to-let landlords who built up a portfolio should have done very well, as rental property has been popular and return on investment high. While increasing regulation and legislation can make BTL a demanding field to be in, it’s still a popular and lucrative investment, because it combines rental income with capital growth.
While property prices remain high, and some people can’t get on the property ladder at all, rental properties will continue to be in demand.
If you can stay on top of requirements such as Minimum Energy Efficiency Standards (MEES), Right to Rent rules, Health and Safety regulations, taxation changes and maintenance costs, BTL can be a sound additional or replacement income for landlords, particularly if regarded as a long-term investment.
Property development – what the Americans call ‘flipping’ – can be a better short-term option, though TV shows like Homes Under the Hammer have brought lots of small and medium-sized investors into an increasingly competitive market.
The idea is to find an affordable property in need of renovation, do it up, resell it at a profit, and move on to the next. Each individual project can provide an excellent return – but it’s also possible that it could go wrong for a multitude of reasons, leaving you out of pocket.
For instance, in the time you take to complete your project, the market could change (again, no-one could have predicted the coronavirus pandemic).
Costs will inevitably rise, never decrease, and unexpected setbacks such as problems with contractors, materials or construction hitches like subsidence can knock a project off-track. Elsewhere in this issue we give you some advice on winning at auctions, and making sure that you don’t land yourself with an unprofitable prospect.
What is MEES?
In 2016, The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 established the new Minimum Energy Efficiency Standards (MEES) in the residential and commercial private rented sector. It is now deemed unlawful to let properties with an Energy Performance Certificate (EPC) rating below an ‘E’ rating. Find out more at www.gov.uk/environment/climate-change-energy-energy-efficiency.
If you’re interested in the property business, research is the key to success
To flip or not TO FLIP?
You can also ‘flip’ a new property, simply by buying it before it’s even built (‘off-plan’), perhaps adding some value, then re-selling at a profit. In theory, this can’t go wrong – property prices will always go up, right? – but what if there’s a property market crash and you’re left with a property worth less than you paid for it? If it works, buying off-plan can offer excellent returns, but it’s a high-risk strategy.
Whichever scheme you choose, there are likely to be five main stages to your plan.
1 Get your finances in order
The more capital you have to start with, the more profit you could potentially make. If you have to borrow, make sure you calculate your costs properly. Always leave some margin for error in your calculations as it’s easy to lose your profit on the smallest of miscalculations.
2 Do your research
Look at your target market, whether it’s the private rental sector or sales, and make sure the property is suitable – for instance commuters will look for somewhere near a railways station, and families will look for good local schools.
3 Shop for mortgages
If you have to borrow, shop around. There are still good mortgage deals around, though you may need a broker to help you find them. Since April 2020, landlords have been able to claim only a 20% basic rate income tax deduction for their mortgage interest, so getting the right mortgage in the first place is even more important.
4 Buy low, sell high
Whether you intend to live in a property or rent it out, making the right offer is key – for investors, paying too much will have a direct impact on your short- and long-term profits.
how do you educate yourself about the ins and outs of what can be a complicated, stressful and confusing business?
Solicitors, conveyancers and surveyors are your friends. Good ones can save you time and money, and ignoring their advice can cost you a packet!
The full article can be found here: https://issuu.com/digital.magazine/docs/property-home-martin-roberts-2020?fr=sZDM3ZDE0Mjk4NDY