How To Get Started Investing In Rental Property With Little Income And No Experience

Short of property investing experience and lacking in funds? Wondering if you can still invest in rental property and make a healthy profit?

Well, it’s not going to be easy, but you might have more options than you imagined.

Continue reading “How To Get Started Investing In Rental Property With Little Income And No Experience”

Affordable UK property investment despite rising house prices?

House prices are racing ahead once more, and not just in London as recent – figures show increases are now spreading across the country.

The latest reports from Halifax and Nationwide put annual house price inflation at 8.7% and 9.5%, RICS has said as shortage in supply of quality homes for sale is pushing prices up making it even harder to access UK property investment.

RICs forecasts the average UK house price will rise by 6% a year for the next 5 years, increasing by a total of 35% by 2020.

If you are looking for to get your foot on the housing ladder and take advantage of the market, prior to the further rise in houses prices but haven’t got the money for a large deposit then don’t miss out.

With the power of crowd funding, you can invest through The House Crowd with just £1000, click here to find out how.

UK property crowd funding future looks bright

As the UK economy recovers, interest in property development is also recuperating. Thankfully, however, the opportunities are now open to all with the concept of property crowd funding becoming increasingly popular in the UK, started by The House Crowd in 2012.

It is flattering for us that there are now around 5 property crowd funding websites dealing with buy-to-let residential property, each offering a slightly different business model but based around the same concept that the crowd funding company acts as the central point between the owner, developer, landlord, letting agent and a number of individual investors wanting to buy property as part of the crowd.

The House Crowd and some of the other UK online platforms are looking at commercial property for crowdfunded investment, already being done in the US. Traditionally seen as more risky, obviously more expensive and therefore unattainable, crowdfunding is making this accessible and offering higher returns.

A major reason for the rise in people following The House Crowd suit, is the Financial Conduct Authority’s (FCA) new regulatory rules on internet crowd funding which came into effect on 1 April 2014, in summary, ensuring that platforms must be fair and not misleading; risks should be highlighted; systems must be in place to separate the crowd’s money from the platform, all of which we do here at The House Crowd.

So, to be part of the bright future, why not invest with the first property crowdfunding company to find out how click here.

Spring Time For Property Investors

It is worth bearing in mind that despite the property market being in the doldrums most of the last 6 years, property as with all other markets, goes in cycles.

If you think of the property investment cycle as seasons in the year, there is no doubt we have been in winter.  But the daffodils have now bloomed. We are definitely in springtime as far as property investment goes and it’s heating up quickly.

Pent up demand from first time buyers, low interest rates on savings and rekindled interest from investors mean more people are looking to buy property. And this is particularly true of the British property market.

Britain is one of the most established property markets in the world, especially in terms of property investment financing. It is very different in terms of property supply and demand from other countries such as USA, Cyprus, Bulgaria and Dubai where the property prices were inflated because of demand caused by the perceived profits to be made (greed) and the sudden availability of easier borrowing rather than actual demand for the living accommodation.

The UK market is very different.  I do not think there is any doubt more housing is required to house the UK population. No one disagrees that there is a massive shortfall in the amount of housing required to keep up with demand. Further, the rate at which new houses are being built falls far, far short of predicted requirements. The gap is widening every year.

It is interesting to note that every time The House Crowd buys a property – typically for about £45,000 – the rebuild costs for insurance purposes are upwards of £80,000 and often closer to £120,000. What that says to me is that if the cost of building new property is considerably more than existing stock (land values aren’t even taken into account in the example above).  Common sense suggests that few people will buy a new build property, when they can get a similar sized property for half the amount. It is equally clear that developers aren’t going to build property unless they believe people will buy what they have to sell. And just to reiterate it there is a shortage of housing which increases demand for available property.

It’s a complex relationship but builders have started to build again and the price of old stock will be pulled up by the price of new builds as sellers realize they can achieve higher selling prices whilst still pricing competitively against new builds.

So there are definite signs that the property market is heating up. You may well have seen the news headlines about average property prices increasing at £1000 a month and prices spiraling – out of control. I wouldn’t believe the hype for one minute but there is undoubtedly upward price movement.

One factor for this is new investors putting their money into property as they are tired of the woeful returns provided by the banks and pension companies.

The new government incentives have also helped boost the market (artificially many might say).

But it is not so much the price of a property but the affordability factor that is the biggest influence in house prices.  People’s income, the deposit required, the ratio income to borrowing permitted and interest rates all play a bigger role than the actual price tag. That is why all the Generation Rent talk about nobody being able to afford to buy any more is hogwash. If nobody can afford to buy the prices fall. The market corrects itself. The only place where that viewpoint holds any water is London where there are huge amounts of foreign buyers pushing up prices to a level ordinary working people cannot afford.

That may be good bad or dangerous (another property investment bubble?) depending on your point of view.

But in terms of achieving capital growth over a relatively short space of time (say the next 5 years), I believe there has never been a better time to invest in property. Warren Buffet recently said he would buy a couple of hundred thousand houses right now if the management of them wasn’t such a problem. Well that’s why the House Crowd was created. We can help you build a property portfolio with an equitable interest in a large number of properties (thus spreading our risk) without any management hassles at all.

So why not make hay whilst the sun shines and give us a call.

Slimmer yields for landlords in 2014? Not for our investors…

According to ARLA, the average yield across the country has fallen to around 5.5%. A journalist recently put this point to me and asked (somewhat sceptically) how we could offer much higher yields.

I responded that average returns are just that.  They represent what an average investor buying an average property in an average area could expect to achieve.

That statistic encompasses properties where yields are 1% and properties where they are 14% or more.  We research areas where the average yield is higher and then cherry-pick the best deals in that area to maximise yields.

The criticism is akin to saying “Usain Bolt claims to be able to run 100m is 9.69 seconds but how can that be when our research shows the average time to complete 100m is 14.8 seconds.”

In short, we are not your average investment company.

Having said that, we are susceptible to market conditions as is everyone and as house prices increase at a higher rate than rents, it is inevitable that yields will decrease.

So, does that mean we will not be able to offer our clients such attractive returns?

No.

It simply means we have to adapt. We are experienced in many areas of property investment, are extremely flexible and already have plans in place to ensure that we can still offer you very attractive returns whatever the market conditions.

The new areas we are moving into and the new business model we are launching next month will enable us to continue to deliver well above average returns.

More VCs announce their investments in crowdfunding platforms

Crowdfunding for property is becoming the largest industry in terms of committed capital, according to an article on Crowdsourcing.org.

In the US, a recent investment by Canaan Partners of a whopping $9 million to Realty Mogul illustrates this clearly. Hrach Simonian who is a principal at Canaan and sits on Realty Mogul’s board told what he see are the key things VCs see when making property investments via crowdfunding:

  • Technology is part of the solution but it’s not the whole solution. You need to attract both sides of the marketplace, the sponsors and the investors.
  • Is the market that a startup is in big enough, and is the timing right?

 

Simonian acknowledged that the real estate market is worth around $11 trillion and that niche crowdfunding platforms (which is what we believe The House Crowd is) are more advantageous over general ones, and with so many VCs making investments in property via crowdfunding, it’s great news for the industry across the world.

Happy 18th birthday Buy to Let mortgages

and thank you for our present… “a predicted 11% profit for the next decade” according to a recent report.

The findings from the report published in an article by The Guardian identified that with average annual returns of 16.3% (£13,000 profit) on each investment of £1,000 since buy-to-let mortgages were launched in 1996, landlords have earned more than they would have done with every other type of investment. These are clearly superb returns.

The report has been timed to coincide with the new affordability rules requiring lenders to carry out detailed checks on potential mortgagee spending and ability to pay if interest rates go up, but buy-to-let investors will be exempt from these rules.

Landlords take one in seven mortgages, and since 1996, lenders have granted 1.5m mortgages worth £174bn to buy-to-let investors.

You can read the full article here: http://www.theguardian.com/business/2014/apr/26/returns-for-buy-to-let-landlords-dwarf-other-investments

No Time Like The Present

Here we go again.

As the latest property boom allegedly gathers pace, you may be trying to decide whether to invest in an investment property and make sure you grab a piece of the action, or alternatively to ignore the raft of positive sentiment and wait for things to quieten down.

If only we knew how far, and for how long, property prices are set to rise there wouldn’t be a problem. But the age old problem is… we don’t.  And nobody does. Not even Bank of England governor Mark Carney despite his assertion that he can control interest rates without resorting to penalising the property investment sector.

So that leaves you with one sensible option. Look at the facts, listen to the experts and exercise your own judgement.

Fact 1: There’s a significant shortage of properties.

Fact 2: The net population is growing

Fact 3: There are not enough new properties being bought to keep up with demand and the gap is growing.

Remember also that there are a large number of property owners that will want to, or potentially need to, sell their properties as soon as interest rates rise. And what’s more, the “Help to Buy” scheme will help first time buyers to enter the market from January 2014. All of which suggests that we will see a buying spree for property over the next few years, which in turn will drive house prices up and encourage more people to sell.

So the government are happy. Those that can afford to are hovering up the early deals before the main rush starts next year and house price inflation kicks in. Which will be music to the ears of the cabinet as this is a key factor that stimulates the economy as people have the “feel good factor” of increased equity which encourages them to spend, spend, spend!

So if you do want to benefit from long term cash flow by investing in property, now would be the time to buy in earnest – the next 12 months may be the last few months in the best window of opportunity the property market has seen in 20 years.

The House Crowd Trumps The Highest Yielding Rental Area in England

The House Crowd Trumps The Highest Yielding Rental Area in England

Residential property group Move with Us has recently produced a buy-to-let hotspot heat-map showing the highest yielding rental area in England and Wales.

Despite the high rents achievable in London, the capital is one of the worst places in the country to be a buy-to-let investor, according to the research. It says large areas of Greater London return an average yield of less than 4%.

Birmingham May Be Highest Yielding Rental Area in England… but we do better!

Their report shows B7 in Birmingham is the postcode in England that produces the highest yields for landlords with an average rental yield of 10.6%.

With that in mind, I think we should take pride in the fact that The House Crowd is regularly beating the highest yielding area in the country with yields on our long term buy to let properties usually at 11%.

Doug Shephard, director at Home.co.uk, said:

Landlords clearly need to be open-minded about where to invest and not simply look in their immediate area. A highly localised approach identifying the ultimate combination of in-demand property types, lower capital investment and higher rental prices will deliver good yields and fewer voids, and maximise potential returns.

Looking beyond one’s immediate area for buy-to-let investment is a good idea, and one facilitated when you invest through property crowdfunding. This is due to the fact that you don’t need to maintain the property or manage tenants through this investment model. These aspects are all taken care of for you, which means there is no requirement for you to visit the property, perform maintenance, or interact with the tenants at all.

The upshot of this is that investors are therefore free to invest beyond the area in which they are based. Indeed, even overseas investors can benefit from buy-to-let opportunities in the highest yielding rental area in England without visiting the property in person.

Another plus is, of course, that there is no need to take out a mortgage or any other form of finance to fund your investment. So long as you have the capital to invest at least £1,000 for your share in the property, you are free to invest without relying on institutions which are making it harder and harder to invest in buy-to-let.

If you want to find out more about investing through property crowdfunding, or via peer-to-peer secured lending in real estate, and benefiting from the highest yielding rental area in England, then simply register with us.

Registering doesn’t require you to invest immediately, but gives you access to further information to help you with your investment decision.

Register Now for more Info

You can also see our range of current property investment opportunities by simply clicking below:

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Disused office space to be turned into residential use

New rules have been created, to make it possible to convert disused offices into homes without having to obtain planning permission.

It is thought that a large number of former offices could now be turned into private rental blocks.

The Department for Communities and Local Government said: “New permitted development rights will enable offices to be converted to homes. This is an opportunity for office owners and developers to bring outdated and underused buildings back to life and create much-needed new housing.”

However, 17 local authorities have opted out of the three-year planning exemption.

London boroughs include: the City of London, Camden, Islington, Hackney, Tower Hamlets, Southwark, Lambeth, Wandsworth, Westminster, Newham, and Kensington and Chelsea.

Outside London, they are: Vale of the White Horse, Stevenage, Ashford (Kent), the district councils of Sevenoaks, and East Hampshire, and Manchester City Council.

Later this year, the Government will consult on similar plans to turn redundant shops and farm buildings into homes.