What is SIPPS? What is A-Day? How could it affect you? Do you have investment property or want to invest in property? These are all questions, that you will want to find answers to.

Referred to as A-Day, April 6th 2006 will be an historical date for pensions in the UK and will mark the beginning of one of the most radical changes in pension legislation for decades. It is because of this, that estate agents, developers, and any landlords looking to sell any suitable investment properties are encouraged to advertise their properties for sale now in the run up to this exciting day.

It will be the first time that a pension saver will be given ability to purchase residential buy to let property inside a SIPP (self-invested personal pension) and many industry experts are predicting a massive amount of interest from private individuals and pension fund managers that will want to be part of this potentially huge market. For those looking to be kept up to date on SIPPS, investment property for sale and other issues relating to buy to let, they can find out more by clicking here

For those looking to take their first step on to the buy to let ladder but not sure about all the technicalties surrounding SIPPS, it may be worth spending the next few months doing a bit of homework and looking at your current pension provisions. It may also be worth getting a simple buy to let guide
to get a basic understanding and also looking at some of the different buy to let mortgage products available. As investors get more experienced and learn more about SIPPS and how they can benefit from it as a landlord, they can then decide at which point to take things further. Once A-Day arrives in the UK, and the activity starts for newcomers to the buy to let market, it is anticipated that this may generate another boom for UK investment property. Most importantly landlords will see this as another ideal opportunity to snap up good quality one and two bedroom first time buyer property especially if it falls below the stamp duty threshold price bracket.

For those not yet committed to the buy to let market, this will be an ideal opportunity to purchase a ‘ready made’ buy to let with the advantage of earning income from day one if they purchase a property with tenants already in situ. For any landlords looking to sell their investment property, this media coverage surrounding SIPPS and A-Day, could create an ideal window of opportunity to sell their buy to lets as the demand is likely to increase for suitable investment property for sale. It may also be worth considering trying to sell investment properties with tenants in situ as investors will be keen to see properties knowing how they are already performing.

As a property investor concerned about cashflow and profit, the opportunity of selling an investment property with tenants in situ is that it can result in considerable savings during the sale process, not to mention that the landlord would retain the rental income whilst the property is being marketed. Plus, if the buy to let is sold to another property investor, they are less likely to be involved in a property chain and many experienced landlords have good relationships with buy to let mortgage lenders resulting in fast turnaround times for mortgage offers. The other benefits of selling your investment property with tenants in situ, is that it gives the newcomers to buy to let, the chance to purchase a ‘ready made’ investment property without the normal set up costs associated with sourcing tenants, tenancy agreements, credit checks etc. If the property is managed through a letting agent, and the landlord sold the property to another landlord, the letting agent will be grateful to maintain the property under their management. Therefore, the new owner hasn’t had the expense of souring new tenants, and paying the usual set up fees associated with letting a property. The letting agents retains responsibility for the property, the seller hasn’t lost any income and finally, the tenants haven’t had to find alternative accommodation whilst the property is for sale. It’s a win win situation.

If the new buyer decides to transfer the property into a SIPP at a later stage, then it is likely that there will be costs involved but a good SIPPS provider will assist in securing the right product for the investor.

Jennifer Tweed is the founder of buytolet4sale.com, one of the UK’s first property portals dedicated to all types of investment property for sale and everything you should need for your sale and purchase. Learn more about buy to let
.

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Find out everything you need to know about buy to let. Learn what to buy, where to buy and what not to buy. All this information about buy to let won’t cost you a penny.

buying

If the area is full of buy to let property investors the supply of property to let might outweigh tenant demand and create pressure to reduce rents.

Consider established areas with good communications links

Research tenant demand as your highest priority. Find a letting agent to discuss this.

Consider ongoing costs, e.g. maintenance, service charges etc.

Be prepared to buy tired investment properties and refurbish them.

Build a team of reliable tradesmen so that you can react quickly.

Find a good buy to let mortgage provider. Finding the correct buy to let mortgage is crucial to your success when you are buying and selling investment property.

To Buy or Not to Buy an investment property for sale?

As soon as you find a property you would like to buy, run a To Let advert in the local press. If the phone rings a lot buy it. If not walk away.

A variation on the theme would be to run a display advert “Seeking long term tenants” I am a portfolio landlord. You find your perfect property and I will consider buying it and letting it back to you”

Demand and professional guidance

Find a letting agent and discuss the demand for properties in the areas you are interested in. They should also be able to indicate the level of rent you could expect to achieve and what type of tenancy is more suitable for the property and area.

University Lettings

Talk to Student letting officers - build rapport so they promote your property above others. They too can give you good advice on demand, i.e. where, why, how much etc.

Buying Privately

* With more and more people turning to the internet to source suitable investment property for sale and for sellers looking to save on selling agent fees, more people are having the opportunity to buy and sell privately. The main difference being that you will liaise directly with the seller of the property. This may be via email or telephone. Viewings will be arranged directly between the buyer and seller and the negotiations regarding the price will be dealt with directly between the buyer and seller. However, you will still need to both appoint a solicitor to act on your behalves.

Buy to Let Mortgages

Finding the right buy to let mortgage is crucial to your success as a property investor. Unlike other forms of property investment, a lot of the capital you invest into a buy to let investment property is likely to be borrowed. Over the last few years, the buy to let mortgage market has boomed, with more and more lenders bringing out products making borrowing money to invest in this way even simpler than before. There are a number of different buy to let mortgage products available from fixed rates, discounted variable rates, base rate trackers to name a few. It is worth remembering that different products may be suitable for different investment properties.

However it is very important that you get the correct guidance with your finance. Questions that are worth considering when finding a suitable buy to let mortgage:

1. Do they have access to lots of different buy to let products in the market place?

2. Do they have the ability to create a long term investment property strategy for you?

3. Are they able to secure exclusive buy to let products?

4. Are they able to arrange buy to let mortgages within 10 working days?

Most lenders will offer a maximum loan of 85% requiring you to fund at least a 15% deposit. The buy to let mortgage industry is very competitive with new products being launched on a very regular basis.

Some brokers may charge a brokerage fee up to 2% to arrange the buy to let finance for you but don’t let this put you off because if they do have the ability to secure exclusive buy to let products for you, it could be very beneficial to your cashflow as a landlord. Plus, if they are able to reach formal mortgage offer stage in a very short space of time, this could result in you being able to secure investment property at very competitive prices if you have the ability to tell the vendor that you can have the deal completed within a matter of a few weeks. Find out more about buy to let mortgages, landlord inventories, tenancy agreements, landlord insurance, landlord tax, furnishing your buy to let and credit checking your tenants
and see how you can start your investment property portfolio.

There are a few simple steps to remember:

Make sure you have done your research

Source a good buy to let mortgage provider and make sure that your own personal credit file is clean.

If you are unsure, then you can request a copy of your personal credit file on a number of different websites which allow you to download a copy instantly.

Once you have agreed an offer for the buy to let investment property for sale with the vendor, you will need to appoint a solicitor and exchange solicitor details with each other.

At this point your respective solicitors will then begin the necessary legal work on your behalves to arrange the legal ownership of the investment property to transfer to the new investor.

Contact your buy to let mortgage provider and confirm the purchase price and loan amounts required.

A surveyor will then need to visit the investment property for sale to carry out a valuation of the property and a rental assessment. Some buy to let mortgage brokers can arrange this on your behalf. Other buy to let mortgage companies will advise you when this will take place. However, it is worth bearing in mind that if a buy to let mortgage provider is a fully packaging company then they may be able to reduce the timescales that it takes for your formal buy to let mortgage offer to be issued.

Whilst waiting for the valuation report on the investment property for sale to be returned, use this time to complete all the legal paperwork that your solicitor will forward to you for completion and the application forms which will be forwarded to you from your buy to let mortgage provider.

If the valuation report comes back and is satisfactory, you should then receive your buy to let mortgage offer shortly afterwards. On occasions, you may be requested to obtain specialist reports which may include a structural engineers report, damp and timber report and coal mining report.

A copy of the buy to let mortgage offer should go directly to you and your solicitor.

Your solicitors will then liaise with each other regarding suitable exchange and completion dates and will arrange to do the necessary completion paperwork for you on your new buy to let property.

Buy to Let Insurance

Insuring your buy to let property is just as important as insuring your own home. As a landlord you have certain liabilities so make sure you get the necessary cover that your investment property needs. There are a number of different options available depending on the type of investment property you have for example if it is an apartment, block of flats, commercial property etc. But do shop around to make sure you secure the best buy to let insurance product.

Preparing to let the investment property yourself?

This is an investment and cashflow is the key factor. Stick to neutral colours that will go with anything. For example, a red sofa might not match a green carpet, however, all colours look good on beige.

Carpets - light beige looks great when clean. Light colours make room look lighter, brighter and bigger. They also encourage cleanliness and are easy to justify cleaning when a tenant vacates. Look for felt backed bleach cleanable carpets which do not require underlay. Replace carpets every 3-5 years, clean every tenant change and debit from damage deposit.

Check with the local letting agent whether there is more demand for furnished or unfurnished property in the area.

Join your local Landlords association

This is the easiest way to keep up with legislation and to obtain advice on getting your paperwork right.

Other landlords in your area will be keen to share good and bad experiences. Learn from their experiences rather than making your own mistakes.

Tenant Application form

Obtain full details including names, addresses and contact numbers of referees and emergency contacts. Also obtain previous addresses, NI numbers, employer details and proof of earnings. This makes life easier if you ever need to track down an absconding tenant.

If possible, fill in an application form at the prospective tenants home. This will at the same time allow you to see how they look after it.

Credit Check your Tenant

It is now possible to credit check your tenants on-line. Just because they are of smart appearance and drive a nice car doesn’t guarantee that your rent will arrive each month. We all know how easy it is to get credit these days so it is important that you have peace of mind that your tenants have the genuine ability to pay.

Fees

Charge a fee to tenants of around

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