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Beginner’s Guide to Building a Property Portfolio

In this two-minute read, we look at the basics of building your portfolio and how to try and make your investment a sound one.

Building a property portfolio might sound like a great way to build an additional income, but it can be a tricky area to navigate with lots of pros and cons.

Getting started

First things first, where is the cash coming from? Have you already got a property and looking to buy a second? Or maybe you’re tentatively dipping your toes into the rental property market for the first time.

Whether you’re refinancing an existing property, or you’ve won the lottery (fingers crossed!), your initial pot needs to be big enough to cover the deposit (minimum of 25%) and legal costs. This is the minimal starting point when looking to buy additional properties.

Create a property profile

Have a clear idea of the kind of properties you’re looking for. Do you want to renovate and add value, or do you want something that tenants can move into straight away? Sticking to a checklist of requirements will help you stay focused and find a deal that really works for your budget.

Always know your numbers

Money money money… no this isn’t an ABBA song, it’s the core of building your property portfolio. A savvy landlord or property owner needs to know exactly where the money is coming from (or going to) for every step of the process. There’s your deposit, legal costs, stamp duty, renovation costs, rental yield, agency fees etc. It’s basically a never-ending spreadsheet that you need to keep on top of.

Knowing your numbers and carefully planning a budget is the key to successfully growing your portfolio.

Get chatting

Building a property portfolio requires you to build relationships. Pop in for a coffee at Nest in Essex,tell us what you’re looking for and your budget so that we can keep you in mind when anything suitable comes up. Similarly, our Lettings team has a wealth of knowledge regarding the types of tenants attracted to areas such as Rayleigh, Leigh on sea, Hockley, Hullbridge, Wickford or other neighbouring towns and their property requirements. So, this will help shape your initial property searches and buying decisions.

Create a network

Trust is so important when you’re buying property. Make sure you’re working with people you can rely on and that have the relevant experience. This applies to your solicitor, mortgage broker, and your builder (if your purchase needs some TLC).

Once you’ve established these working relationships, next time, hopefully the process will be easier. Personal recommendations from a friend or family member are a great place to start, but never feel like you have to settle for the first professional you meet.

To get started with your buy-to-let property search give us a call on 01268 500988

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To Furnish or Not to Furnish? A Landlord’s Dilemma

In this two-minute read, we ask some questions you should think about before renting out your property.

Once the last lick of paint has been applied and the carpets have been laid, it’s time to decide whether or not to furnish your rental property.

It’s a question that has many landlords scratching their heads. Does a furnished property command a higher rental yield? Or is it more hassle than it’s worth?

What type of rental property do you have?

Certain rental properties need to be furnished. For example, if you own a House in Multiple Occupation (HMO) it’s wise to provide furniture, even if it’s the basics of just a bed, wardrobe, and chest of drawers.

Freehold properties are best left unfurnished so that tenants can make the property more homely.

What type of tenant does your property attract?

Furnished properties are very attractive to short- and mid-term renters such as students and professionals. So, if your property is located close to a university, a furnished property is a good idea.

Students will move in straight from their family homes so are unlikely to bring bulky furniture with them. Professional tenants prefer furnished homes as it saves them money and they can move in quickly.

An unfurnished property is more suitable for families or elderly tenants who rent for the long term and tend to bring their own furniture with them.

Do you have insurance?

If you furnish your rental property, you may want to think about landlord’s insurance to cover any damage that can occur to items within the premises. While this is an additional outgoing, if a large item of furniture needs to be replaced due to breakage or tenant damage, you’ll usually be protected.

Other points to think about when considering furnishing your rental are:

  • If tenants are moving large items of furniture in and out, there is a higher risk of damage to your walls/floors
  • As a landlord, you are not responsible for insuring tenants’ furnishings
  • Tenants in furnished properties can move out easily, so you can get your rental back on the market quickly
  • Depending on the location of your rental and the quality of your furnishings, you may be able to command a higher rent

If you want more help and advice as to the best furnishing option for your rental property, give us a call on 01268 500988

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Landlord Insurance: Do You Really Need It?

In this two-minute read, we look at the ins and outs of landlord insurance and consider how it might just save you money in the long run.

As a private landlord, you’ve got to stay on top of repairs, damage, and unexpected costs. So how do you safeguard your property and income? Do you cross your fingers and hope for the best? Or have you taken the necessary steps to protect yourself?

What is landlord insurance?

First off, there’s no legal obligation to have landlord insurance – unless your buy-to-let mortgage offer specifically requires it. But be warned, if you’re relying on a standard home insurance policy to cover your rental investment, this may not protect you when the property is occupied by tenants.

Landlord insurance is designed to cover various aspects of your property/rental agreement. Think of it as an umbrella policy, protecting you against different risks. It normally includes buildings and contents protection as standard, and you can choose to add different types of cover such as:

  • Rent guarantee protection
  • Tenant or accidental damage cover
  • Boiler or plumbing issues
  • Legal expenses

 Remember, the more you add to your policy, the more it costs.

What if I’m a leaseholder?

If you own a leasehold flat, the freeholder covers the cost of buildings insurance. However, this doesn’t protect you if there are issues within your rental property such as the boiler breaking down or someone injuring themselves on a loose floorboard (for example).

If you’re a freeholder, landlord insurance is advisable. The buildings insurance cover means you don’t have to worry about big outgoings in case of physical damage to the property, such as damp, cracks, and so on.

How much does it cost?

As with any insurance plan, the price varies depending on what your policy covers, so it’s difficult to predict. However, you can expect prices to start from around £200 per year. Use comparison websites to find the best deal and most suitable cover for your needs.

What happens if I don’t take out landlord insurance?

While it’s not the end of the world and not legally necessary, you may have to pay out a large sum if something goes wrong with the property or if a tenant or tradesperson makes a claim against you.

Many landlords choose not to take out this type of policy, especially those who own a leasehold property. As a bare minimum, freeholders need landlord buildings insurance to protect themselves and their tenants.

Talk to us at Nest in Essex to discuss whether you need landlord insurance or about how we can help look after your rental.

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Why Homeowners Should Sell Before They Start Looking

In this two-minute read, we look at the BIG reasons why your home needs to be up for sale at the very least before you start seeking a new one.

Picture the scene.

You’re house hunting and have been trawling the internet for what seems like forever. Then one day your eyes are drawn to a beautiful looking home that ticks all your boxes.

You visit the property and boom, fall head over heels with it. It’s the one.

You make your offer and start dreaming about waking up in this place you’d love to call home.

If this all sounds too good to be true, it’s because, in this scenario, it often is IF you’re making that offer without your current home being on the market already.

Why?

In our experience, when people start looking for a new home before their existing one is under offer it creates several potential issues that can mean being thousands of pounds out of pocket.

When you see a property you love, you can be blinded by emotion and pay over the odds for it.

And while you may be smitten with it, sellers usually find buyers who already have their homes under offer much more attractive than those who don’t.

The downside

The real downside in this scenario is you may feel pressured to accept less for your current home because you don’t want to miss out on the one you’ve fallen for. However, if you pay more for your new place and get less for your old one, you can see how that creates a crater-like dent in your finances.

So, here’s our advice for homeowners on why it’s a wise move to sell first and seek later.

First, put your home on the market with an agent who has a clear plan and strategy to achieve the best possible price for your property.

Once your property is under offer, it puts you in a much stronger position when offering on a new home. This is because you now fall into that attractive buyer category in the eyes of sellers.

And you won’t have that pressure of being in a rush to sell your home and potentially accepting under asking price offers because you’re desperate to move to the new place you love.

We’re on your side

We’re here to help you make the best decisions when it comes to moving home. And we’d gladly give you advice on buying and selling.

To speak with one of our friendly, experienced team, call 01268 500988 or send an email to info@nestinessex.co.uk

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Tips for Avoiding Rent Arrears

In this three-minute read, we look at the steps landlords can take to protect against a tenant falling into arrears.

Landlords have always worried about tenants falling behind in the rent, but that fear feels particularly pertinent right now due to the pandemic.

There are many reasons why a tenant might be unable to pay their rent – such as illness, job loss, or relationship breakdown – but the bottom line is it’s stressful for both landlord and tenant.

The good news is there are things landlords can do to protect themselves from getting into this predicament. Here are some tips.

  • Always carry out credit and reference checks before a tenant moves in.
  • Make sure your tenant signs a contract. 
  • Keep your records up to date and when rent is paid, send the tenant a receipt – this is particularly useful if it’s a joint tenancy. If there’s a dispute, it’s easy to identify who has missed a payment.
  • If you’re dealing with a joint tenancy, ensure that all tenants understand they are equally responsible for the rent – and any unresolved debt. (If there’s an underpayment, often the tenant who has paid up can be a valuable and persuasive ally in getting the errant tenant to pay.)
  • Keep all tenants in the loop about the situation as they bear joint responsibility (even though they might tell you otherwise).
  • If a tenant misses a payment, talk to them but don’t go in all guns blazing. You’re trying to find a constructive way forward, not score points. Always remain professional.
  • Keep records of all conversations.
  • Consider adding rent protection cover to your insurance for some peace of mind.
  • If the tenant has a good track record, and you feel they can turn things around quickly, consider a payment plan. This is a revised payment schedule that gives the tenant a chance to get back on their feet. 
  • If you do agree a payment plan, make sure you put it in writing.
  • The tenant may decide that they can’t meet their obligations and serve notice that they want to move out. If this is the case, contact your tenant deposit scheme and ask them to deduct the unpaid rent from the deposit.
  • Legal eviction proceedings should always be the last resort. There is currently a huge court backlog, and lawyers are expensive. Do everything you can to find an alternative solution.

Contact us today on 01268 500988 and find out how we’ll help you avoid rental arrears.

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Now’s the Time to Sell if You Want a New Home for Christmas

A two-minute read.

The summer holidays have ended.

The kids are back to school, and the distractions of Euro 2020 and the Tokyo Olympics have gone.

What have we got to look forward to? Easy, Christmas.

Yes, we know it seems a long way off, but if you’re thinking of celebrating it in a new home, it’s time to get things sorted.

Here’s why.

Recent research from one of the most respected organisations in the estate agency industry, Propertymark, highlights the need to get your selling skates on if a new abode is at the top of your Christmas wish list.

The organisation’s findings show the average time taken from an offer to exchange is now at 13-16 weeks. This doesn’t consider the period from when your property goes on the market, and an acceptable offer is made.

A statement from Propertymark’s CEO said the average time used to be around 6-8 weeks, but the post-pandemic market across the UK and is ‘a very different beast.’

This is due to several factors. Record levels of transactions, pressure on solicitors, mortgage companies and even overworked removal firms are slowing the process.

There are just over 15 weeks until turkey time (other culinary options are available), so speed is of the essence.

Here’s a simple ABC plan to put you on the path to opening presents in a new home on 25 December.

  1. Action – Take the first steps of calling in three agents to give you a valuation of your home. Always ask this question of them: How will you go about getting me the price you say my home is currently worth?
  2. Be Ready –Now is the time to get your house in order, literally and metaphorically speaking. Do those little maintenance jobs that have been left for ages. You’d be amazed how off-putting peeling fence paint or missing cabinet handles are for prospective buyers. And get all your paperwork organised. You’ll need warranties and receipts ready to help speed up the legal side of any sale.
  3. Check –We’re expecting a surge of sellers and buyers looking to move in the run-up to the festive season, so it’s worth thinking ahead. Call removal and storage companies for quotes and get dates pencilled in with them. The good moving companies get booked in advance even when the market isn’t as busy as it is now.

If you’ve a dream about waking up on Christmas morning in a new home, get in touch with us on 01268 500988 or info@nestinessex.co.uk and we’ll help make it a reality.

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Why Rental Property Is a Good Investment Right Now

In this three-minute read, we look at the rental property market and why now is a good time to invest.

Have you ever considered becoming a landlord? Investing in property can be a great way to make the most of any money you have to invest. Generally, it’s best if you’re prepared to invest over a long period of time. So, why is right now a great time to get into property?

High numbers of tenants

The latest stats* from May 2021 showed that numbers of prospective tenants continue to increase. Per letting agency branch, the average number of tenants jumped from 82 up to 97. In 2020, the highest average number in May was 70.

Low numbers of properties

The average number of properties managed by each letting agency branch for this year was at 203 in May. The year before, it was 208. This seems like a small reduction per branch but that’s an average and multiplied across the whole of the UK, it has a significant impact.

Limited negotiating

Some tenants want to negotiate over rent. Perhaps because of the lack of available properties, this number has reduced. This could be because they would rather secure the property than worry about negotiating. The number of tenants that negotiated rent reductions is at the lowest since records began – at 0.9% in May.

Mark Hayward, the Chief Policy Adviser from Propertymark, a respected estate agent industry organisation, said: “Yet again, we continue to see incredible demand from home seekers. There has been a record-breaking number of people registered per branch for the month of May. This demonstrates the continuation of a booming rental market.

We will be keeping a close eye on the sector in the coming months. The current strength of the sales market may be off-putting to private rental investors. Also, any potential impending taxation on property will be a consideration for all landlord types. But overall, it remains fantastic to see rent continuing to flow this month.”

Contrary to opinion

Between April 2020 and March 2021, the numbers of landlord possession claims have fallen. This suggests that tenants and landlords have invested in a collaborative approach to the challenges of the pandemic. This bodes well for the future of those relationships and the industry.

If you’re not sure how to become a landlord, or are a seasoned pro but want to maximise your yield, get in touch with Nest in Essex for a free, no-obligation chat.

*Figures from ARLA Propertymark

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Seven Ways a Prepared Seller Can Speed Up a Sale

In this two-minute read, we look at how sellers can fast-track property transactions.

We’ve all heard horror stories about property sales that drag on for months or even years, leaving the seller frustrated and frazzled.

But the sales you don’t hear much about are the ones that rattle through quite efficiently without any drama.

As a seller, you can’t control every element of the process, but you can influence the progress of a transaction.

By being proactive and accepting that selling a home takes a little effort and energy, you can minimise delays.

Here’s how to speed up the sale of your home.

Declutter

A home that is piled high with boxes and bric-a-brac is a turn-off for buyers. Have a good clear-out and put bulky items in storage (or take them to the tip). Decluttering will allow you to market your property at its best – and achieve the maximum possible price.

Have a good clean

Roll up your sleeves and get scrubbing or get professionals in to help. Either way, make sure your home is sparkling clean from top to bottom.

General repairs 

Fix wonky fences, broken cupboards, and dripping taps. Address all minor maintenance issues before you show buyers around.

Dress your property

Present your home so that it appeals to your target market. For example, if you’re marketing your property as having a home office, set the relevant space up with a computer, keyboard, desk, and chair.

Choose a solicitor

Instruct a solicitor (ideally one recommended to you by your estate agent, as they will have the most up-to-date knowledge and experience). Knowing who you will use for conveyancing will save time later in the process.

Be prompt with paperwork

Expect your estate agent to ask you to fill out a property information questionnaire detailing your home’s features, recent building works, etc. Meanwhile, your solicitor will need to see ID (as part of their anti-money laundering checks) along with deeds, notices, and lease information. Provide all relevant documents and complete all paperwork swiftly.

Be flexible

Once your property is on the market, respond to queries promptly. Whether it’s your estate agent, solicitor, or the buyer’s surveyor, be as efficient and amenable as possible.

Want more advice on achieving the best possible price for your home? Talk to us here at Nest in Essex on 01268 500988