Your HMO Expert

testiun

Popularity: 3% [?]

Share This

I read an interesting article the other day about negative equity and how up to 40% of landlords could face themselves in this situation by the middle of next year.

Standard and Poor’s Rating Service stated that between 20%-40% of buy-to-let borrowers may owe more on their mortgage than their house is worth if prices fall between 25%-35% from their peak.

With most property investors geared around the 80%-85% mark following the recent boom years, this may indeed by true.

Furthermore, they also commented that following a review of 200,000 securitised buy-to-let loans, there arrears were running at 3.7% to the end of June verses 2.9% for prime mortgages to owner-occupiers.

But lets not get depressed right now because there are several issues at play here.

1. If you buying your properties with a healthy discount to the market value, then you are already locking in any downturn in the market.  So, it doesn’t matter if the market crashes by 20% if you have a seriously good margin already locked in - if you don’t then you may have some issues on paper.  However, this goes onto my next point.
2. It doesn’t really matter if you are in negative equity because property is a LONG-TERM investment.  The days of making a quick £20K profit from doing a quick refurb and selling it on have ended.  Its been proven by many commentators, experts, pundits and statistical evidence that long-term, property prices keep on rising.
3. Cashflow is king.  I talk about this all the time but you need to be investing for cashflow NOT capital appreciation.  If you have 10 houses making £500 pcm gross cashflow;, then do you really care if you are paying more for the house than its worth?  No, because cash is what pays the bills not capital appreciation.
4. If you are on a tracker, then potentially you might owe more on the mortgage than the value of the property but you’ll still be saving money because of the recent rate reductions.  I have a new-build property which I purchased for £340,995 a few years ago.  Given that I had a larger new-build valued in May for £40K less, I doubt that my property is worth anywhere near £340,995.  However, do I care?  Not a hoot really - I make around £336.58 gross cashflow from this property and come January, my mortgage payments drop by another £200 per month.
5. According to the British Bankers Association, buy-to-let lending in September was £3.2 billion up from £2.8 billion in August.  This upturn is good news for property buyers everywhere as it will strengthen the market and start to build-back demand and prices again.

To sign-up for my exclusive 10-part ecourse on building your own successful HMO business which gives you massive cashflow every month, please sign-up today in the opt-in box at the top of the page.

Popularity: 5% [?]

Share This

Some new changes to the HMO Regulations have come out - and it appears that 2-storey HMO’s may not require fire doors provided that they are off reasonable risk!

I’ll be finding out more details and posting shortly but thought that you should know that there is bright news at the end of the tunnel.

Also, check out if your council has an accreditation scheme as they may pay for works to be done to your property - I’ll write further about this later in the week about our experiences with this.

Popularity: 8% [?]

Share This

Interesting times we all live in.  Property investing is still alive but you’d be surprised at the rates out there.

I checked the LIBOR yesterday and as of November 14th, the £ Libor was at 3.00000% with reduction of -0.213 in the last week. 

I’m getting letters every other day now from lenders reducing my interest rates on my tracker mortgages (I almost wishes I had gone for more of them to be honest!) but whats happening in the current buy-to-let market?

Well, some new rates were issued last week by Birmingham Midshires and their lead-in rate at 75% loan-to-value is a staggering 5.89% fixed or 6.19% tracker.  So, at current LIBOR even future-forecasting where it may end up, they are making a nice 2.89% to 3.19% on their lending.

But that’s not all; you also have to pay an arrangement fee of 2.5% for the priviledge.  And if you did go for the tracker, its a staggering 3.19% above base rate for 36 months - wow.

So much for the days of 4.99% rates from the leading ex-player in the market, Mortgage Express; I think the new buy-to-let rates are going to hover around the 6% mark despite the recent and forecasted future reductions in the Bank of England base rate.

So for property investing to work smart; keep your eyes peeled on the latest developments and if a good product comes out, snap it up or get a DIP done asap to lock in the rate.

Popularity: 9% [?]

Share This

“There are no property bargains out there that meet my criteria” wails one investor. Well yes, actually there are - its just a matter of opening your eyes…

See how I found a positive cashflow property after 5 minutes searching on Right Move.

Popularity: 16% [?]

Share This

OK, so you’re in the midst of the credit crunch, some of your mortgages have come down, the pressure eased a little bit but you’re still not making enough to either give up that dratted job or support your lifestyle.

So what can you do?

In the good times you could have:

• remortgage onto a better rate, pulled out some money and still paid less than you were paying
• sell a house, use your capital gains allowance and bank the difference
• bought and sold a house in 60-90 days
• gone and done another cashback deal

Sadly, in todays market, its become slightly more difficult to do this.

So, if I may suggest a HMO strategy that anybody can do - and it will even help you understand whether or not you want to get into HMO’s in a big way.  So what do you need to do?

1. Face up to the fear of doing a HMO and do it anyway!
2. If you own a property, then ideally chose one which is at LEAST 3 bedrooms (it just doesn’t work doing it for less rooms than that).  If you don’t own a property, then focus on getting a property with at LEAST 4 bedrooms (or 3 bedrooms if you are still feeling the fear!)
3. Follow the steps in my FREE ecourse (you can sign up at the top right) and get your first HMO set up.

If you have any questions, then put them under the “Ask Matthew” section and I will answer them as soon as I can.

Popularity: 31% [?]

Share This