The Pros and Cons of Investing in Property with a Friend
In this two-minute read, we ask if it’s wise to buy a rental property in Ayrshire with a mate.
Purchasing a buy-to-let property with a friend is an appealing prospect – on paper, at least.
But it’s important to carefully weigh up the risks and rewards before taking the plunge.
Here’s a list of the pros and cons of becoming a landlord with a friend.
The pros
- The role of landlord comes with a plethora of responsibilities. Sharing these duties with a trusted friend will lighten the load.
- Your co-investor may have a different skill set to you, meaning you can play to your strengths while they play to theirs.
- Most lenders require larger deposits for buy-to-let mortgages. Splitting your investment means you don’t have to pay as much cash up front.
The cons
- You never really know someone until you’ve gone into business with them. If the two of you disagree on how to manage the property, the friendship could suffer.
- If your tenant falls into arrears, as landlords, you’ll have to stump up the cash. However, if your investor buddy can’t pay their share for whatever reason, you’re liable for the shortfall.
- You might be on the same page as your friend right now, but people’s circumstances change. Further down the line, your friend may decide that they want to sell up when you don’t, or vice versa.
Tips
If you’re still keen to invest with a friend, here’s how to mitigate some of the risks.
Get a good lawyer
You need a legally binding agreement that states:
- How much each party is investing
- The ownership split
- Responsibilities regarding bills and maintenance
- What happens if one or both parties want to sell
- A dispute resolution mechanism should you disagree on an issue
Get a will
In some cases of co-ownership, if one party dies, the property automatically goes to the other person unless otherwise stated in a will.
Don’t feel pressured
If your friend thinks a formal agreement is unnecessary – they may see it as a sign that you don’t trust them – politely, but firmly, pull out of the deal.
Without the right paperwork in place, you risk getting caught up in a protracted and messy dispute later on.
Going ahead based on a wink and a handshake could cost you the friendship and much more if things don’t turn out according to plan.
For more advice on investing in the buy-to-let market, contact me, Janice Molloy at Parkview Property 01292 442888
Why Ayrshire Landlords Could Be Taking Expensive Shortcuts
In this two-minute read, we look at the false economies many landlords in Ayrshire are making regarding their rental properties.
Many of us realise doing a bit of DIY can save you money. But it comes with a caveat that you must know what you’re doing first.
For every successful bit of hallway decorating, there are dozens of tales of lopsided shelves, incorrectly fitted taps, and a whole host of other DIY disasters and fails.
And this risky approach doesn’t just apply to home DIY – we often see it when a landlord tries to do everything themselves.
Here are five of the most common mistakes landlords make when they think about the pennies but take their eyes off the pounds.
- Marketing matters – There’s much more to marketing a rental than simply slapping it on Facebook or Gumtree and hoping for the best. It’s nigh on impossible to achieve a property’s optimum rent by using this approach.
- Poorly referenced tenants – An excellent letting agent will carry out all the proper referencing needed to ensure you get a good, reliable tenant. Skipping this process and ‘going with your gut instinct’ can be hugely expensive further down the line if the tenancy turns troublesome.
- Maintenance mistakes – The most significant error landlords make when it comes to maintenance is not having money set aside in their budget to keep their property in good condition. A general rule of thumb is to put away £100-150 per month towards maintenance and general upkeep.
- Cheap is not cheerful – Many landlords make false economies by scrimping on things like flooring, windows, and taps and fittings, only to have to replace them more quickly than they would have if they invested a little more in the first place.
- Temperamental tradespeople – The nightmare scenario for many landlords. A call comes in on a Sunday evening (usually when you’re on holiday) from a tenant telling you the boiler has packed up. DIY landlords often rely on their own trade contacts in this situation, which can be great but is often not. However, a good letting agency has access to a pool of tried and trusted tradespeople who fix things fast and professionally.
Of course, we understand that you want to get the best possible returns from your rental investment. But experience has taught us that using a letting agent to find tenants and manage your property is money well spent.
We’d be delighted to offer a free review of your rental property/properties and highlight where you can save money but also protect your assets.
Call us on 01292 442888 or email info@parkview-property.co.uk
HOME MOVERS - HAVING SECOND THOUGHTS?
Whether You’re Buying Or Renting in Ayr, You’ll Regret Not Reading This … Probably
In this two-minute read, we look at avoiding regret when it comes to buying or renting a new home.
We’ve all had it – that gnawing sense of buyer’s remorse when we’ve made a purchase.
It could be the make of that new car you’ve ordered. Or the colour of that dress that looked good online, but will it have a wow factor when the delivery driver drops it off?
Or something as simple as ordering a dish in a restaurant that you suddenly wish you hadn’t as your friend’s requested meal sounds infinitely more appetising.
On a more serious (and expensive note), according to research by insurance company Aviva, over a quarter of people who bought a home during the pandemic now have some regret linked to it.
It was either the cost, location, or the property itself that created the nagging feelings of doubt.
The good news is the risk of buyer’s or renter’s remorse can be reduced by following these nine simple steps.
- Have a realistic budget and stick to it.
- Work out what you want from a home and what you actually need.
- Think ahead, will this home be providing what you need in five years’ time?
- Consider all the moving costs like removals, storage, legal fees etc.
- Consider any commute time, transport links, and even broadband speeds.
- Research the area if it’s new to you. The steps below are worth following.
- Consider speaking with people who already live in the area you’re looking at. If you’re brave enough, knocking on doors in the neighbourhood and asking direct questions can be priceless and very revealing.
- Jump on social media and ask in Facebook (other social networks are available) community groups what the area is like to live in.
- Speak to me. As a local property expert, I’ll give you an honest opinion on areas and the types of property you’re interested in.
And remember, it’s natural to have second thoughts about something as big as moving home – so don’t beat yourself up about it. But by taking a little more time and applying some more research, you’ll be more confident and comfortable about moving.
I’ve been helping people in Ayrshiremove home for more than 17 years and having a chat with me is something you won’t regret.
Call me on 01292 442888
Beginners Guide to Building A Buy To Let Portfolio
Beginner’s Guide to Building a Buy To Let Property Portfolio in Ayrshire
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. Call me for a chat or arrange a meeting to tell me what you’re looking for, and your budget. I will keep you in mind when anything suitable comes up. Similarly, my Lettings experience and knowledge regarding the types of tenants attracted to Ayrshire and their property requirements 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 in Ayrshire, give me a call on 01292 442888.
A Landlords Dilemma
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 in Ayrshire
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 Ayrshire rental property, give us a call on 01292 442888
Landlords Insurance
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 Parkview Property to discuss whether you need landlord insurance or about how we can help look after your Ayrshire rental.
Parkview Property Sends a Big Well Done to GB’s Brilliant Paralympians
In this two-minute read, we look at the amazing achievements of our Paralympians.
The word ‘inspirational’ gets thrown around a lot these days, but when it comes to our Paralympic heroes, there really is no other way to describe them.
The grit and determination they displayed in Tokyo provided a much-needed reminder that human beings can do incredible things when they set their minds to it.
We could all learn lessons from this remarkable bunch of people about staying positive, working hard and not quitting. (Useful lessons if you’re moving home, but also for life in general.)
Here are three GB athletes who epitomise the Paralympic spirit.
Micky Yule – From Scotland, stepped on an explosive device while serving with the Royal Engineers in Afghanistan and lost his legs. After undergoing 21 operations to stabilise his injuries, Micky felt ‘good for nothing’ – until he threw his energy into powerlifting.
After years of hard graft, Micky qualified for the Paralympics and this year, won bronze in the men’s 72kg category after lifting a whopping 182kg.
Ellie Robinson – Ellie, who won gold in Rio, finished fifth in Tokyo in the S6 50m butterfly final. In a heartfelt post-race interview (check it out on YouTube, it’ll have you welling up), she explained why the result was ‘a story of triumph, not of defeat’.
In the run-up to the games, medical experts told Ellie to quit swimming due to a worsening hip condition called Perthes disease.
But Ellie pushed through the pain and made it to the final because she wanted to finish her sporting career ‘on her own terms’.
Dame Sarah Storey – The Queen of the Track and the Road, Dame Sarah has won 17 gold medals and is Britain’s most successful Paralympian.
Incredibly, she’s competed at eight Paralympic Games over a 29-year period – and hopes to be a contender in Paris in three years’ time.
The 43-year-old mum-of-two started her career as a swimmer; she won two golds in the pool in Barcelona at the age of 14.
When an ear infection forced her to take time away from swimming, Dame Sarah discovered the joys of cycling – and became a champion on the bike, too.
If you enjoyed the Paralympics, let us know your favourite performance from Tokyo.