Welcome to Andrews buy-to-let

Property Session

By Debbie Franklin, Bristol, Bath & Stroud Area Manager

About Andrews

• Established in 1946 • 85 estate agency and lettings branches throughout

the South of England

Not just sales and lettings: • Mortgage Services• Landmark Surveyors • Homemover Conveyancing • Andrews Property Services • Leasehold Management• Land and New Homes

Andrews Letting & Management

• Last year, we helped more than 7,000 landlords let their properties

• 1,000 tenants on average register with us each week

• 30% shorter void period than the UK average

• Multi-award winning

• Members of ARLA and TPO

Why invest in property?

• Rents in UK forecast to rise by 2% in 2015

• The av. UK rent for tenancies starting in Dec 2014 was £867pcm, 6.6% higher than Dec 2013

• The av. void period fell in 2014 to 2.6 weeks

Source: RIC, netrent.co.uk, homelet.co.uk

Buy-to-let

10 steps to become a successful property investor

1. Define your objectives

How much do you expect to earn from rental income and/or capital

growth?

2. Consider the risks

• Costs exceeding income, through void periods, or maintenance issues

• Mortgage increase

• Tenants not paying rent

• Property prices go down

• BTL new government regulations

• New European Mortgage Credit Directive

• Legal responsibilities

3. Plan your finances

• Cash investments

• Buy-to-let mortgages

• Gearing

• Mortgage fees • Survey fees • Solicitor fees • Stamp Duty • Buildings insurance• Repairs and running costs• Empty property • Mortgage payments • Letting agent’s fees

Calculate your target requirements

Budget for every cost

4. Do your research

Where are the best:

• Rental yields

• Tenancy demands

• Buy-to-let mortgage deals

• Capital growth areas

5. Find the right property

• New build or second hand properties

• Flat or house

• What type of tenant you’d like to attract

• The sort of property most in demand

• House in Multiple Occupation (HMO)

6. Calculate the yield

Investor purchases a property for : £200,000

Rental income: £950 Per Calendar Month

Using the following formula, you can calculate the gross rental yield:

Monthly rent @ £950 pcm x 12 Months = £11,400 per annum rental income.

£11,400 annual rental income divided the purchase price of £200,000 x 100 = 5.7 % Gross Rental Yield

Now you need to factor in property maintenance costs, insurance and mortgage payments

7. Find the right mortgage

• Repayment mortgage or interest-only

• Fixed or variable rate mortgage

• Best rate and fees

• Get the best buy-to-let mortgage deal

Speak to an independent mortgage advisor for more information

8. Manage your property

Benefits of using an agent

• Knows and understand the legislation

• Can source tenants and collect rents

• Organise viewings, advertise your property and deal with repairs

• Set up the tenancy agreement

• Letting and management fee can be tax deductible

9. Tax on buy-to-let properties

• Stamp Duty

• Income Tax

• Capital Gains Tax

• Inheritance Tax

Seek advice from an Independent Tax Advisor

10. Landlords’ obligations

• Mortgage consent to let

• Hold a Gas Safety Certificate

• Electrical Safety Check

• Meet the safety requirements for furniture and furnishings

• Fire Safety Precautions

• Energy Performance Certificate (EPC)

• House in Multiple Occupation licence requirement (HMO)

• The Tenancy Deposit Scheme (TDS)

• Immigration checks

What next?

• Register with Andrews Investor Club

• Speak to an independent mortgage advisor about gearing

• Purchase more properties

Andrews Investors Club

• Portfolio assessment

• Advice on how to maximise and expand it

• Facilitate the purchase of future investment

• Market for sale property in your portfolio

• Designated independent Mortgage Advisor

• Monthly market update with top properties to invest in and list of mortgage best buys

Any questions?

To sign up to Andrews Investor Club

visit andrewsonline.co.uk/aicor

call your local branch