We are in interesting times. There are many undercurrents to what is actually going on and there are many varying opinions.
However, the point is it is happening and we need to deal with it. That’s the bottom line.
From a property investment perspective it is a good time to get deals, as most people will be too fearful to make the right moves in this climate.
One place where you will find deals is the auction room; although everything has shifted online for obvious reasons.
Auctions have always been lagging, it seems decades, behind in terms of onlining the whole process.
On the surface it makes a lot of sense. You could attract investors not only nationally but from all around the world. You have plenty of interest in UK property from overseas.
However, there has been limited traction from the physical auction rooms to the parallel universe of online auctions.
Surprising, considering how long Ebay has been around. It’s the same principle, just higher values and bigger lumps; and the time for bidding is shorter.
Several months ago we were looking at a very lucrative deal in North West London, which was cheap even though it was being flipped. The property was bought cheap primarily because it was bought online, thereby avoiding the masses; as the masses go to the physical auction rooms. This was from an auction house who is really trying to push forward with an online presence and seems to be the only one.
If this was the case in a normal market you can imagine the lack of enthusiasm the auction houses will face in the current environment. However, they have been all forced to switch. Viewings have been cancelled.
So, this is the time to purchase for the brave investor. Money is never made by following the herds, one needs to go against the movement of herds.
The focus should be yield not growth. As you don’t know when the bounce back will occur, it may take months, or years. Nobody knows. The property should be purchased in a strong location, where the location will drive the growth. However, emphasis should be on the cash generated every month, in other words yield.
In times like this, one should not forget the fundamentals of property. There is a shortage of property which at the current build rate means the demand will always outstrip supply.
Due to planning rules and regulations this does not look like it will improve any time soon.
Therefore, if you concentrate on the end of the pyramid which focuses on actual people who need homes and shelter you will not go far wrong.
When looking for property in auction, the best deals will always come from those who have to sell, those in the category of the three Ds; death, divorce, distress. There are also companies who need to shave of the fat before the year end and still will want to offload empty buildings regardless of the environment.
We have a couple of investors who hope to grab a deal in the next couple of days. This will be good for our investors and good for the sellers, who need a quick sale.
It will be interesting to see whether my speculation matches the reality of the market. Agony Agent Is Here To Help!
What is a rent collection service?
The majority of letting agents offer you mainly two types of service:
Tenant Find or Intro Only - this service normally comprises of the agent finding and referencing the tenant. Once they've moved them into the property, everything else from that moment onwards is down to you.
Fully Managed – is the most popular and known throughout. With this service, normally the agent will take your property and look after every aspect of your property from paying bills, service charges, finding the tenants, referencing them, inspections etc, basically anything and everything that involves the day-to-day running of your property.
There is a third option, Rent Collection. This is usually where an agent will find tenants and reference them. Once they've moved the tenants into the property they will demand the rent from the tenants each month, and if the tenants fall into arrears or a late payment for any reason the agent will have the awkward conversations with them. This allows you as a landlord to remain hands-on as far as maintenance and repairs are concerned.
Just double check with your agent that this service includes deposit protection and negotiation of any dilapidations or damages at the end of the tenancy, as some agents will charge additionally for this at the end of the tenancy.
If you need any other lettings guidance, please do get in touch.
