Further to our last blog post on the rising levels of repossessions in the UK, we have compiled a free report for investors on dealing with repossessions.
Please do feel free to add your comments and questions below…
Archive for February, 2009
Repossessions up to 200 a day in 2009
The news of rising repossessions comes as no surprise to many investors and business owners as the effects of the recession begin to take effect. There are many active investors who are continuing to buy pre-repossessed property in the UK and working with vendors to ensure that the bailiffs do not come knocking on the door.
However, at the same time, many homeowners (perhaps those who bought over the last few years and those who took out highly geared mortgages) are now finding themselves in negative equity and often struggling to keep up with their repayments. Unfortunately, investors cannot purchase these properties as there is not a sufficient amount of equity for it to make sense from their perspective.
For this reason, Property Solvers has set up a partner ‘advice’ site aimed at helping homeowners that are facing this predicament – Repossession Information: www.repoinfo.co.uk – please feel free to refer your clients to this website.
“It is optimism that is the enemy of the rational buyer…” Warren Buffett*
“It is optimism that is the enemy of the rational buyer…” Warren Buffett*
It’s the latter part of February 2009 and the real value of the housing market continues to slide (despite recent optimistic figures by the Halifax and Rightmove). Across the pond, the US cash injection of almost $800 billion (the majority if which is going towards tax cuts for the cash-strapped general public) should help boost its economy but – in the UK – it’s fair to say that the market has still got a way to go. However, for property investors now is proving to be one of the best times to buy. Take a look at the facts:
- The lowest interest rates in history – EVER!
- There is an increased demand for rental property as more people are renting rather than buying;
- General prices are about 20% off their peak and still falling;
- Vendors are desperate sell direct to investors;
- Estate agents are continuing to close down;
- Developers struggling to sell and accepting huge discounts on residual stock;
- Property Investors are buying property at massive discounts.
* Quote taken from Mr Buffett’s Letter to Shareholders (1990)
Your time is yours and does not belong to your property business!
“Effectiveness is doing the things that get you closer to your goals. Efficiency is performing a given task (whether important or not) in the most economical manner possible. Being efficient without regard to effectiveness is the default mode of the universe”
Tim Ferris
When asking experienced investors what they ultimately want to achieve from being involved with property, the following answers commonly appear:
“I would like to leave the day job completely and work for myself”
“I enjoy my day job but would like to cut down my hours so I can spend more time with the family (but still earn the same level of income)”
“I would like to expand the portfolio to a level where it’s running itself”
“I want to retire early.”
Notice that there is one common thread which underlies all these answers – time. This post is aims to encourage readers to think more about running their property businesses rather than the other way around. Indeed, when managing a property portfolio, it is often easy to fall in the trap of running around and ensuring that all the issues are being dealt with. So below I’m going to discuss a handful of common issues that property investors and landlords have to deal with and some potential solutions. These are, of course, open to debate
“I’m always having to deal with issues happening with the properties myself…”
Work at building effective, win-win relationships with your support staff. Offer incentives, such as bonuses for work completed on time (it’s sometimes easier to pay someone an extra bit of money than have an empty property). Lettings agents can also often help dealing with the day-to-day issues of portfolio management and you could also develop ties with trustworthy tradespeople to help view properties, conduct inventories and explain what work needs to be done.
“I have no time to be looking at property and making investment decisions.”
Many investors are finding that because they are so busy (either with a job or running their existing businesses) they simply don’t have the time to look at acquiring new property. Armchair Investing can relieve the hassle of having to source and buy yourself but advertising for your own property and buying qualified leads can also help you save time as it means that motivated sellers who are willing to sell at a discount come to you.
“I have tenants not paying.”
Times are difficult for tenants and some are defaulting on their payments. Having a pre-determined system (letter, section 8 , section 21, court) to deal with any arrears will help save some time and there are several landlord eviction assistance companies that can offer packaged services. However, you should also consider exploring the housing benefit option - this could be an extra weight off your mind as rental payments are guaranteed.
“I’m no good at paperwork.”
It’s hard to gain much enjoyment out of managing the administrative side of your business so consider outsourcing to a book-keeping company (ensure you ask them to sign a Non Disclosure Agreement). Some investors use lettings agents who can deal with income statements, receipts and invoices.
