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Whether you’re just starting out or have decades of experience in the property world, a property power team, a group of like-minded individuals and experienced operators, should be seriously considered.
Success in the property investment world, like many things, can be achieved alone but if you commit time and effort towards building a close network of true value it can save you both time and money.
If that sounds interesting, or your unsure of where to start, read on below as we list the key members of your new property power team.
Property Investing in Northern Ireland
Joint Venture Partners
Depending on your goals, experience and financial standing in life a joint venture partner could be crucial in helping you make the leap or take the next step within property investing.
Joint Venture partners are a great way to process and achieve greater success in property. Property can be very lonely if you are doing it by yourself. We feel from personal experiences that yes you will achieve what you set out to do but as a partnership there is so much more you can achieve.
Each partner has something different to offer to the partnership, it may be money, time, property deals and process, invaluable contacts, experience, knowledge and skills.
If you want to operate within the buy to let world but lack experience, aren’t local to a specific area and thus don’t have the local knowledge sometimes needed, or simply want someone to manage your properties, then a letting agent is your new best friend.
Letting agents can also help determine the letting potential of a particular property potentially saving you time or money on a deal.
It is worth spending a little time finding an agent that is also an investor. They may have a better understanding of your investment strategies and what you are trying to achieve. For example, are you investing for cash flow or investing for capital growth? We would advise invest for both cash flow and capital growth.
A creative and experienced property solicitor can be a massive asset throughout your property journey. If you’re inexperienced or lack the time to properly consider the legalities of your next move then a property solicitor can step in and save you countless headaches.
An experienced property investor, one with a specific history in redevelopments and refurbishments, might be able to survive without a property surveyor but for the rest of us it can be hard to judge the countless aspects of a property to the level required.
A fresh pair of eyes, paid for by you and thus looking out for your best interests, could find vaults or potential problems you would never consider.
Working hard to create a property investment portfolio takes time, commitment and a lot of effort. An experienced account, ideally with a history dealing with similar property focused clients, will help to ensure that your property business is as tax efficient as possible.
Unless you’re an accountant by trade, or seriously experienced and up-to-date with everything HMRC demands, this person will become an essential element within your power team. I would also recommend you find an accountant that specializes or has an interest in property tax.
The mortgage landscape is ever changing. Add to that the fact that your personal profile will change with each new property deal and it starts to become clear that mortgage brokers can be very important.
Up to date industry knowledge and a duty of care to you, their client, will ensure you get current information tailored to you.
Tradesmen and contractors, similar to property surveyors, become more and more valuable the less experienced you are.
How can you correctly value the costs of refurbishments and redevelopments without a proper knowledge of materials, labour costs, projected time factor and unexpected developments that happen during every project? That’s where your tradesmen come in.
All of the above should provide a good overview of who you need and where to start. Beyond that, and especially if you’re inexperienced or just getting started, come along to the next Belfast Property Meet.
You never know who you might meet…
Whether you’re flying along, passing by on the motorway, or walking the city streets it’s clear to see that Belfast is booming right now. Cranes are popping up everywhere with new developments constantly around the corner so it’s a pretty exciting time to invest in Northern Ireland’s capital city.
Thankfully the city has something to offer all sorts of property investors at various stages and using various strategies. As always there are plenty of opportunities for the creative investor out there!
Two Key Property Investment Options
These opportunities can be broadly split into two key options.
First up is the buy to let strategy. This strategy focuses on an evolving combination of cash flow (monthly rent minus expenses) and capital growth (the year on year rise in property values). There are areas of opportunity within Belfast that mean you can still purchase properties for under £50k that, when properly taken advantage of, can result in great cash flow and capital growth over the coming years. It should be noted that this is primarily a long-term strategy that could be suited to pension-pot style investments.
The second option is to focus on “flips” where you buy a property, renovate and sell on at a higher price. Belfast is constantly redeveloping right now meaning, if you find the right property, the potential is there to make a substantial cash gain without the headaches that come along with operating as a landlord. This may be a great short-term option for the right investor.
The Lay of the Land
After deciding on a specific investment strategy the next stage is to analyse areas of Belfast that are ripe for redevelopment, flipping or rental properties.
One major consideration, during this stage, is the existence of two large Universities within the city and the resulting and constant need for good student accommodation. As a result investing in HMOs (Houses of Multiple Occupancy) can be a very rewarding strategy but remember to consider the regulations and responsibilities involved.
Another opportunity, as a result of the post-2007 recession, is the high numbers of owner-occupiers in negative equity that want to move on and are seeking a way out. To counter this and take advantage of the current marketplace you could propose a lease option agreement that works for both parties.
With all of that in mind, and a quick glance around the streets of Belfast, it’s clear to see that opportunities exist but many potential investors are put off by their lack of capital to get started.
Money is clearly an important factor, and raising finance will always represent a crucial element of any property deal, but it’s not always the defining factor in getting started. There are various strategies that exist including the option of joint venturing with other like-minded individuals where various parties bring money, time, experience and the deal to the table.
There are so many strategies out there so come along to the next Belfast Property meet to find out more, network with fellow investors and learn from experts that operate here in Northern Ireland!
See you soon!
Investing in property has long been a gateway to supplementary income and financial freedom and when undertaken in the right way it can be a great addition or transition in your working life. However, if you’re not careful it can turn into a nightmare.
As with everything, and especially where your financial status is concerned, thorough research and planning is essential for success.
If this is going to be the year where you make your first move in the property investment world make sure to consider the points below.
Cash Flow or Capital Gain?
Within the property market there are two major strategies to generate a return – rent (cash flow) or buy to sell for profit (capital gain).
While there are variations of the above those are the two primary methods and due to the potentially wildly different pros and cons of a rentable property and a sellable property it’s important that you choose your path before making a move on any potential projects.
With that in mind it’s completely acceptable to alternate between strategies as you evolve into a more experienced investor.
Property Market Fluctuations
It’s easy to become swept up the emotion of a booming or sinking property market but it’s important to ask yourself “if property market prices stopped going up tomorrow what would I do?”
If you’re a first time investor the only assumption you should ever make is that the property market will fluctuate and prices, at some point, will dip. If you begin to work off of that principle you can start to develop your property investing strategies, savings and cash flow with a long-term focus in mind, rather than relying on short-term gains to stay afloat.
Use this long-term focus when considering each new potential property and drown out the noise of the market around you.
What Comes Next?
In some cases you may be working with an investing partner or using capital provided by someone else, but if, like the majority of first time investors, you’re only using your own finance you need to plan ahead.
Successful property investors are like great snooker players, always thinking two or three shots ahead, and it’s important to consider what you’ll do when you’ve used 90% of your investment pot on an investment property deposit, fees and any required repairs or alterations.
What Area To Invest In?
Location, location, location!
How many times have you heard or seen the above phrase? Even property novices have heard those three famous words repeated over and over again like a mantra and that’s because the sentiment remains the same decade in, decade out.
Before deciding on location you should choose your investing strategy (as mentioned above) as this will begin to dictate what type of property you’re looking for and in what area. For example, a buy-to-let strategy can potentially be much more achievable in an urban or suburban area when compared to a rural market.
When all of the above has been decided you must pick your location carefully and this process begins from top to bottom. You will start on a macro level, deciding what country, county and town or city to invest in and finish on a micro level where you should analyse specific areas, housing estates and streets.
No detail is irrelevant during this phase.
Why Are You Investing?
From the outside looking in property investment can appear to be the perfect move and in many cases it can be a great investment choice or career move. However, as with every job and some other types of investments, it requires hard work, smart planning and commitment.
Before making a move take the time to consider why you’re actually wanting to invest in property. Your motives, and subsequent commitment levels, will quickly dictate your actions.
This is simply a broad overview of 5 major considerations you should be aware of before investing in any property. The property world is a complex and ever-changing environment but can represent a world of opportunity.
If you want hands-on advice from experienced investors here in Northern Ireland check out our upcoming Property Investing for 2017 workshop here!
Also, if you're more interested in entering the property market as a homeowner for the first time take a look at our tips here.
Finally, if you have specific questions or want to network with other investors, to learn and/or team up for potential deals, join us at the next Belfast Property Meet by clicking here or contact us here.
Depending on the situation a house deposit can be the biggest single outlay of cash anyone ever makes. The reality of this means you need to think long and hard before parting with the bulk of your savings.
It’s worth considering just how much you can save to put towards your deposit as even though options start at 5% mortgage rates can become much more competitive from 10% and 15% onwards.
To help with this you could check out Money Saving Expert’s mortgage calculator and also take a look at the Government’s Help to Buy ISA which was launched specifically for first time buyers in 2015.
Your Credit History
A healthy credit history and score is essential when buying any house. Due to financial mismanagement pre-2007 credit scores have become even more important and the reality now is that a poor score will result in instant mortgage rejections.
There are plenty of ways to boost and manage your credit history including ensuring you’re registered to vote, pay utilities and bills on time and ensure addresses and records are up to date.
This is a long term project so don’t worry. Put best practices in place and check your rating before any application to avoid shock and disappointment.
Proof of Income
The proof of income topic can easily be split down the middle with salaried or hourly wage earners on one side and self-employed on the other. If you’re an employee your two or three most recent wage slips, with yearly earnings visible, will generally be enough.
If you’re self-employed you’ll have to work a little harder to prove your income. This will include 2 years of accounts, having an accountant, proving a track record of regular work, providing a good deposit and having a healthy credit rating.
Although your property deposit might seem like the most important element of any deal, due to the large cash outlay, the reality is you need to focus more on your monthly mortgage payments.
Here, it is absolutely crucial that you agree to what you can afford today, rather than project potential earnings in the future onto this deal.
It is also recommended that you organise your mortgage deal, and have it in place, before searching for properties. As a result you will be able to move quickly and efficiently when everything is sorted. It should be noted that mortgage deals generally last for up to 6 months in principle and if that time has passed you would be advised to research incase better deals have become available.
The Backup Plan
The final consideration should be your backup plan. If you secure a mortgage and then, at a later date, unfortunately lose your job or ability to earn you will need to ensure you can still fulfil your monthly payments.
This can come in a variety of shapes and sizes but generally boils down to what your partner can provide financially (unless you’re buying alone) or what savings you have stowed away for a rainy day.
Good luck with your property search in 2017 and beyond! If you have specific questions or want to learn more about the property market in Northern Ireland join us at the next Belfast Property Meet or click here to contact us today.
George Osbourne may no longer be Chancellor of the Exchequer but his legacy remains in the UK property market in the form of Clause 24 that will eventually rear its head as of April 2017.
What is Clause 24?
The Clause, known by some as “George’s Tenant Tax”, was first announced by Osbourne during his Summer Budget on 8th July 2015 and in essence means property owners and landlords will now be taxed on turnover and not profit.
This restriction of financial cost relief, potentially created to put more properties in the hands of first-time buyers rather than landlords, will be phased in over a number of years as the basic rate is shifted down to 20% by 2020.
Should I Be Worried About Clause 24?
The announcement of Clause 24 initially created some panic within the current UK buy-to-let market but in reality any changes may be subtle.
From a landlord’s perspective the two key options are to either raise rent, if the local surrounding market can withstand and absorb it, or to sell. Whilst the latter option might appear to be a quick fix, with more landlords selling, demand will continue to outstrip supply meaning opportunities to increase rent will exist and potentially grow.
If you do decide to hold, one major concern will be the maintenance of a profitable letting business. To do this you will also need to consider your new profit margin against normal contingencies such as boiler breakdowns, tenant evictions and other such issues.
With all of this in mind, depending on your operating size, there is the very real option of creating a Limited company and operating all properties under the business name thus allowing you to take advantage of UK corporation tax laws meaning your property business will be unaffected by Clause 24.
However, you should also be aware of the difficulty of obtaining a Limited company mortgage as well as the costs involved in transferring a property into the company name. This would constitute a sale and result in capital gains taxes if the sale resulted in a profit. Also, as mentioned previously, a Limited company would also pay corporation tax and be liable for income tax.
Our advice would be to avoid worrying and instead focus on action. There are multiple options out there to help curtail or nullify the impact of Clause 24.
If you have specific questions about Clause 24, or any other aspect of the property market, contact us here or come along to the next Belfast Property Meet!
It happens every year. The Christmas holidays roll around and after the madness has disappeared our thoughts turn towards the New Year just around the corner.
Everyone talks about their new year resolutions and plans for the future but by February the gyms are empty again, those self-help books go unread and everything get shelved for another year.
At Belfast Property Meet we absolutely hate this and that’s why we want you to set your goals for property investment in 2017 right now.
Developing SMART goals is absolutely essential as it creates structure and moves away from unrealistic ideas in dreamland.
SMART stands for Specific, Measurable, Achievable, Relevant and Time-based goals.
If you apply this technique to your property aspirations you’ll quickly develop one or a number of key goals that, crucially, apply to you and no one else.
If you own your own home but would like to enter the property market to generate cash flow and purchase your first buy-to-let in 2017 your SMART goal could be:
“I will save enough capital for my first buy-to-let within the first 8 months of the year and purchase the property before the end of 2017.”
The above SMART goal is specific, measurable within the 8 and 12 month periods, achievable depending on your income and relevant to your property investment goals within 2017.
Break It Down
One reason gym attendance drastically decreases after January every year is because people often expect instant results and quickly become disheartened.
To avoid this you need to break down your property investment goals into manageable chunks that can be assessed both on their own and as part of a wider picture.
For example, if your 2017 goal was to enter the self-serviced accommodation market you could break down this wider goal into three separate elements: networking, capital and location.
Each element is designed to achieve something separate and different whilst still being a part of the overall goal. Within networking you would aim to meet with relevant people who could help you achieve your self-serviced accommodation goal. This could be a mixture of estate agents, property investors and representatives from your bank.
Capital is relatively self-explanatory as you need to generate enough capital to purchase a property and location will allow you to research the best area to buy in.
All three elements can be tackled, and measured, as a single issue thus allowing you to achieve small wins in the short-term but all three eventually add together to slowly push you towards your overall goal in the long-term.
Habit forming is a brilliant quirk within the human brain that research suggests takes anywhere between 21 and 28 days to achieve. This little fact can easily be applied to your property investment goals for the New Year.
One habit would be to read your set SMART goal every morning before you start your working day. This constant reminder will help you focus and keep your goal at the forefront of your mind.
Another simple habit to form could be to check property listings in your area every day. This could be especially helpful for first-timers or beginners with little or no experience in the marketplace.
Over time habits will cement themselves in your brain and lead to new ideas and opportunities and by committing to these actions you’ll stave off the possibility of your 2017 goals hitting the scrapheap in the first six weeks of the year!
For more honest and unbiased information on property investment and development in Northern Ireland come along to the next Belfast Property Meet!
Click here for more information.