Over the weekend I met an investor who's recently sold a company, and wisely wants to invest a chunk of the proceeds into property.
He doesn't really have a strategy and is looking all over the country and at all sectors.
I would say more than 50% of getting into property is firstly to have a strategy. This is required on all levels, from what type of asset class to purchase to tax and finance.
A lot of money can disappear into property very quickly and you may not have achieved what you wanted at the end of the process.
It may be more hassle than you expect, and there may be unforeseen tax implications if there has not been due emphasis on planning.
When it comes to paying for and valuing advice, we Indians are notorious for cutting corners.
You might be able to knock some money off paying for a deal in the short term, but this mentality will cost you in the long run.
This mentality doesn’t just affect advice, but the relationship is also ruined or in the very least becomes tainted, when you bargain too much. It devalues the other party.
Maintaining and honouring a relationship will ensure a lifetime of good deal flow and advice. Compromising and going back on your word, doesn't ensure a healthy long term relationship. This occurs fairly often in this business; people get excited about the property deal, and in the process they end up killing the golden goose which gave them the golden egg in the first place. It’s cheap, and unfortunately very prevalent more so in the Indian psyche than others, in my opinion.
Currently, we are in the midst of a development deal, which will end up being valued at least about £3-4m when finished, so a sizeable chunk of real estate. I advised the owner to ensure he gets proper advice, which will need a special combination of legal know how along with tax expertise, and the person needs to be commercially minded enough to understand the whole deal holistically. The quoted fee was £15k, this would have ensured the deal was executed in the most efficient way possible, leaving no stone unturned. It requires a skill set which an individual professional would not have. However, the client is umming and aaahing regarding the fees. From where I am standing, spending £15k in the right manner to save potentially millions is a no brainer.
Then we have those who reverse what they say, or reduce the fees which have been agreed when the time for payment comes.
There is a price to be paid for not keeping your word, as the name of this company suggests. This price is first paid in your own psyche, then your own body and then your relationship with the person you have done this too, and then there’s the karmic effect.
It doesn't even make sound business sense, as the relationship which is honoured and kept intact will produce money long term with the minimal hassle.
With this mentality you will lose opportunities and ultimately cash.
Agony Agent is here to help!
Q: I have a friend moving into my rental property, do you think I need a tenancy agreement?
A: Yes! Providing a written contract or rental agreement is an important part of a tenancy. A tenancy agreement is a legally binding document which gives the tenant the right to live in the rental property, and the landlord the right to receive rent.
It's important that the tenancy agreements landlords are issuing are up to date and legally compliant. Due to the fast-paced and ever-changing nature of the rental sector, landlords need to keep up to date at all times. If this sounds like too much hassle, then use the services of a letting agent.
Providing an agreement may not be a legal requirement, but if you intend to take a deposit - which the majority of landlords do - then it’s in your interest to have a written tenancy agreement. Without a written tenancy agreement, you won't be able to claim possession of the property using a Section 21.
This is just one of the legal reasons why a signed tenancy agreement is so crucial for landlords. There are also a number of more practical reasons. It also gives you the opportunity to set some clear boundaries from the beginning, for example, can the tenants keep pets? Are they allowed to sublet the property? By making clear what you expect of the tenant and what they should expect of you, both can feel more at ease and the chances of a disagreement or dispute further down the line are also reduced.
What should a tenancy agreement include?
l The most basic tenancy agreement for an AST needs to include:
l The property address
l The details of all parties involved
l The landlord’s service address
l The amount of rent and how it will be paid by the tenant
l The deposit amount and which scheme it will be protected by
l The term of the tenancy
l Notice periods required to bring the tenancy to an end
l The rights and obligations of both parties
l Any special arrangements
It's important that two copies of any agreement are signed and dated, the tenant should have one signed by the landlord, and the landlord should have one signed by the tenant. If a landlord or tenant wants to make changes to the terms of a tenancy agreement once the tenancy is underway, the other party must consent to the change.
It's key that the document is legally binding and is up to date. So, if you do create it yourself, it would be wise to run it past an experienced letting agent or property lawyer to make sure it ticks all the boxes. If you don't want to create your own tenancy agreement, most letting agents provide templates or sample agreements. You can also ask a solicitor to draft a tenancy agreement for you to your specific requirements. A tenancy agreement is a crucial document when it comes to letting a property and so if you don't have one in place, or you're unsure about the agreement you're currently providing, you should take the time to review the Government guidance or ask an expert.
Tenancy agreements benefit both landlords and tenants, helping to reduce the potential risk of problems or disputes.
Feel free to contact me if you need any assistance.
