According to research by mortgage advisors John Charcol, more than 28% of the UK property market does not know the size or cost of their mortgage rates, whilst a further 50% doesn’t know when their existing mortgage deal is going to end.

And I have to confess that this figure worried me. How can you genuinely not know this information about your mortgage? It is the biggest debt you will ever have. No other will compare… Yet it would appear that many homeowners become clueless to this information once the deal is signed.

What is more alarming for me though is the number of property investors who are probably caught up in these statistics and who are losing out on the best mortgage deals in the industry because they don’t know any better.

The size of your repayments plays a fundamental part in influencing your positive cash flow. The smaller your interest rate, the smaller your monthly repayments will be. And the smaller your monthly repayments are, the bigger your positive cash flow will be after your payments have been deducted.

And it is not like this property information is not available. I regularly receive updates from my lender, roughly once a year, detailing how much I have paid off and what my mortgage deal will default to when my existing deal ends.

But it would seem that many homeowners and even property investors too are dismissing this information…

Now if you are reading this and cannot honestly answer the following, then I thoroughly recommend that you get your property documentation out and refresh yourself. You never know… you might be at a stage in your mortgage where you can switch to a better deal:

• What is the size/cost of your mortgage rate?
• How much do you pay in repayments every month?
• When does your existing mortgage deal end?
• What will your default mortgage rate be?
• What is the term of your mortgage?

Wendy xx

Like homeowners the last thing they want to do is live next to someone who harasses them – they want to live in peace. But the thing is… unlike homeowners who have to sell in order to get away from such neighbours; all your tenant actually has to do is end their tenancy agreement with you.

And let me tell you, this is the last thing you want to happen…

Can Nuisance Neighbours Affect My Profitability?

Surprisingly so… It is easy as a property investor to forget to check out the quality of your neighbours because you are not living in the property yourself.

Yet thinking on this subject I can see how this could quickly impact on your profitability. All you need is one tenant to say to another: ‘I wouldn’t live there the neighbours are horrible’ and it won’t matter how strong the tenancy demand is or how good the rental yields are, if you cannot get tenants to stay, it will be you who is footing the bills.

So what do you do?

You make sure you know exactly who are investing next to before you put down a bid:

1. Visit the property more than once – the average buyer views a property once maybe twice before putting down a bid and usually at the same time of day. To gain an accurate perception of whether your potential property let is actually a local hot spot for vandals and drunks, or if your neighbours are noisy, I suggest trying to view the property at least 5 times and at various times of the day. This will allow you to see exactly what conditions your tenants will be living under.
2. Introduce yourself to your neighbours – meeting someone face to face can tell you a lot about a person. Before you put down a bid, make sure to introduce yourself to your new neighbours. You’ll soon discover if you are going to have difficulties with them over noise or a shared driveway.
3. Know your covenants – if you have already invested in the property and have got tenants living there, make sure to check the covenants of the property to see if your neighbours for example are prohibited from being a nuisance i.e. playing music at certain times of the day, lighting all day bonfires etc…
4. Talk to a solicitor – this should always be a last resort, but should you find that your tenant makes a complaint; you speak/write to the neighbour and they still persist in their actions, then you may wish to speak to a solicitor. They will be able to issue a letter to your neighbour highlighting the properties covenants and the possibility of legal action.

So try to take these on board the next time you invest in property. £500 positive cas flows and a high tenancy demand are all well and good, but get a bad neighbour for your tenants and they may affect your long term profitability.

Wendy xx

In the past, any homeowner looking to sell their property in Scotland would first have to advertise their property and give a minimum property price quote, before inviting buyers to put in ‘offers over’ bids.

Now what always used to fascinate me about this process was the fact that these quotes didn’t have to be accurate estimations. Using set guidelines, sellers could in fact set a minimum bid for their property which could cause buyers to place bids more than 25% above their original quote. Meaning not only could they benefit from guaranteed capital returns, but they could easily use this extra cash to invest in their property.

However, this has now all changed…

Following the introduction of the ‘Home Report’ last year – which are the equivalent of our HIPs – homeowners must now provide an accurate valuation price of their property, meaning they can no longer experience such sizeable returns.

In fact, Home Reports have impacted on their investment system so much that ‘offers over’ are rarely seen nowadays. Instead sellers are choosing to market their properties under an ‘offers around’ scheme which if they are lucky can generate them some capital, but nowhere close to what they were used to.

I have to admit, that this change to their property investment system has made Scotland a much more accessible location for property investment. Notoriously lower in price compared to properties in the Southern regions of the UK, all the myth – and overspending – behind this region has gone, making their system not that far from their own.

Even their ‘offers around’ is basically a similar version of our own general bidding system where the highest value is usually accepted by homeowners.

I can honestly say that I am thoroughly looking forward to getting stuck into the Scottish property market now it is less of a mystery.

After all, with average house prices of £155,691, and rental incomes of £907.63 a month (based on a 4 bedroom property), the returns far outweigh the investment cost.

Wendy xx

It is a catch-22: impressive 100% buy-to-let mortgages on properties valued £250,000 and above or restricted mortgage deals on properties that are discounted at 30%.

If I am honest I don’t know which market condition I most prefer. In an ideal world you would be able to get both: a strong buy-to-let mortgage on a property that has been thoroughly discounted.

However, despite these limitations, I have begun to notice a significant improvement in the direction these mortgage deals are moving in.

I was researching the other day on moneysupermarket.com and spotted some tempting buy-to-let deals that are seriously worth taking a look at:

Mortgage Works: offering an initial rate of 3.74% until 2011 (on a maximum LTV deal of 60%), after this date you can expect to pay a subsequent rate of 4.69%. And this is not bad considering that their arrangement fee is only 3.5% of the properties borrowing price.

BM Solutions: offering an initial rate of 4.1% for the next 2 years (on a maximum LTV deal of 60%), after this date you can expect to pay a subsequent rate of 3.99% as well as a minimum arrangement fee of 3%

*NOTE: to qualify for this deal your property must produce a rental income that covers 125% of the properties mortgage payments

Cheltenham & Gloucester: offering an initial rate of 4.69% until January 2013 (on a maximum LTV deal of 60%), after this date you can expect to pay a subsequent rate of only 2.5% (with a minimum arrangement fee of 2.5% of the properties borrowing price)

NatWest: offering an initial rate of 4.99% until December 2011 (on a maximum LTV deal of 75%), after this date you can expect to pay a subsequent rate of 4.5%.

However it is important to note that this is a variable rate and is subject to change, so you might not always be paying 4.5% month on month. The other down side is you can expect to pay £1,999 in arrangement fees

Lloyd’s TSB: offering an initial rate of 5.39% until January 2013 (on a maximum LTV deal of 60%), after this date you can expect to pay a subsequent rate of 2.5% with a minimum arrangement fee of 2.5%.

These are only a handful of the top buy-to-let deals currently available on the property market; however their interest rates in particular do suggest that the lending market is improving.

The only thing left to change is their LTV’s. Lower these bad boys from 60%-75% and these product offerings would be even more tempting.

Wendy xx

It was shocking to read, but at the same time I could see why so many people have chosen not to invest in their future.

I myself have only been putting aside money during the last few years, but this is purely because of my property investments. If I wasn’t investing, I honestly don’t think I would have as my main salary doesn’t give me that leeway. It simply wouldn’t stretch that far and I think it is the same for many people across the country.

Substract their mortgage/rents, gas/electric bills, council tax and general living costs from their income and the vast majority of the public are not left with much to work with.

Take a look at these figures from Gfk NOP. Their figures are proof of a growing pension problem within the UK:

Under 30’s - only 36% of the 1,358 interviewed paid into a pension scheme
41-60% - only 55% pay into a fund

These figures are worrying and make me glad that I have got my property portfolio to fall back on.

To take my own example further, from the positive cash flow I generate from my properties every month, I have been able to put aside £12,350 in the last few years – and this was with me using the vast majority of my cash to re-invest in more properties. If I was to leave off investing for a few years, I could easily increase this amount by 5 times the amount.

Now I know I am far off retiring, and have easily got another 20+ years before I need to, but the great thing about my property portfolio is that it will still keep on working when I don’t have to. A fact that I find very reassuring.

Wendy xx

For me, my favourite episode had to be when they introduced property expert Andreas Panayiotou. Leaving school at 15 with no qualifications to his name, by 2006 he had managed to build a property portfolio worth £700m which he subsequently sold before the recession hit.

He is proof that it is possible to build a credible property portfolio without having to use your own money; that you can invest without being an experienced property investor.

Then there were their other episodes.

For those of you who were crazy enough to miss Property Watch, here is a quick run down of what they discussed:

Episode 1: Asked the question of whether now was the right time to buy and if property prices would fall further.
Episode 2: Examined mortgage and interest rates, whilst speaking to homeowners who had found bargains.
Episode 3: Discussed the pros and cons of renting, and the UK’s obessession with property.
Episode 4: Looked at property trends and the impact rising house prices will have on the market.

They are definitely worth watching

Wendy xx

As a student landlord specialist, their ultimate goal through this investment scheme is to invest in run down properties situated in desirable student areas, refurnish them and market them out as multiple occupancy homes in just 6 weeks!

Yet the best bit has to be their rental predictions. For a single person rent of £100 a week they are expecting revenues of £5,200 a year. Multiply that by 3 and one house could provide them with a rental income of £15,600 a year.

And they definitely seem to know what they are talking about. They currently have an occupancy rate of 90% to 99%!

So how can we take their successes and translate them into our own investments? Well I know I haven’t got £20m lying around to invest in multiple properties, but the principle I feel is still the same.

By doing the research, investing at 20% below value and ensuring you have got the tenancy to match the rental values, it is possible to make a substantial profit from multiple occupancy. It is just a matter of finding the right locations.

Wendy xx

If like me you were disappointed when many lender’s chose to not implement the Bank of England’s latest cuts, then this story is fantastic news. Let me put it to you clearly. In the last week the following lender’s have released an array of mortgage cuts that could be very beneficial to your monthly cash flow.

• Abbey and Alliance & Leicester: 5 year fixed rate 3.95%
• Woolich: 4 year fixed rate 3.99%
• Lloyd’s TSB: 2 year fixed rate 3.29%

And Nationwide are cutting their fixed rate loans by up to 0.58%.

Yet despite this revelation, mortgage brokers have published the warning that fixed rate loans are highly unlikely to fall any further. If anything they strongly believe they will begin rising again, so now it the time to take advantage.

Now I myself am fortunate that all my investment deals have relatively decent interest rates, but for anyone who did get caught up in higher standard variable rates, making the change to one of these lower rates could be beneficial to your monthly positive cash flow.

Take this scenario for example:

You have got a £100,000 3 bedroom property that produces an average rental income of £683 a month. The monthly mortgage repayment on a property of this type on an interest rate of 6.43% is £671. Do the maths and that leaves you with a passive income of just £12 (tiny).

But if you were to take the same property, bought at the same price, with the same rental income, and had an interest rate of 3.29% as offered by Lloyd’s TSB, your monthly repayment would only be £489.

Subtract that from your rental properties monthly repayments and that equals a passive income of £182 – a substantial increase in profits.

With that perspective, it is perfectly credible to say that now is the time to act, and set up a deal.

Good Luck! xx

I honestly don’t know what to make of this article by BBC News: http://news.bbc.co.uk/1/hi/uk/7855847.stm. It is either very original or very crazy.

You see the council are planning to build social houses out of Straw bales. Now whilst on the one hand I have got a clear image of the 3 little pigs in my head, the reliability and popularity of these type of properties is meant to be really high.

And part of me can see what they mean. Easy to build and replenish, great for insulation… hey it is even a great asset for farmers, offering them a new source of revenue. And that point there makes them particularly good for the economy.

But then there is their price. At £120,000, that is pretty steep for a straw property that can easily burn down. To me, all this just feels like repetition. The government are doing exactly what they did before and are not learning from their mistakes. And instead of creating an easily accessible affordable asset – which it is to some extent – these properties are still out of some people’s budgets.

Think about it. You can now get terraced properties – in some locations of the UK – for under £100,000. And these are buildings made of brick and stone. More wearable and lasting. Whilst these straw buildings will look like traditional properties, underneath they are not. They are not as durable and could end costing more to maintain.

Anyways I was wondering what you all thought about it.

For example, will this become another avenue for property investment, or is this something that is not liable to last? It is a growing craze after all.

Anyways, speak soon.

Give me your thoughts on what you think of it.

Wendy xx

I have learnt a great philosophy this week, one that I just had to share with you: ‘It is all about the cashflow’.

Now I know for the last few weeks, I have been harping on about going on a property course – well I have done it, and it was incredible!

I am actually shocked by how little I knew about the property market, which made the course all the more insightful.

Take negative equity for example. We have all got it at the moment. It is practically unavoidable. But what I discovered this weekend is that it doesn’t have to spell the end of the world. Yes it is a pain, and we would all rather not have to watch our properties fall in price, but it doesn’t have to spell the end of an investment. If anything it can lead to a more profitable future.

You see what it all comes down to is cash flow and whether or not your rental property is still generating a positive cash flow.

If it is, so what if your property is going into negative equity. As long as you have got the patience to wait, once the recession is over you can sit back and watch as your property once again experiences captial growth.

I think what many of us forgets is that we have been in a recession before. 1989, 1973, 1923… supposedly we even had a recession during the Roman Empire (wow!). So it is really nothing new to see this. It’s to be expected.

Any ways, I just wanted to pass this onto you, as it has personally given me a new view on my property investments.

Good Luck everyone.

Wendy xx