The LOCKDOWN LANDLORD
Posted on 1st May 2020 at 11:02
Buy To Let investors have had a huge range of choice over the years, enjoying a buoyant rental market, taking a considered view with their hard earned money to benefit from long term capital growth and regular surplus income, a large choice of lenders from the high street as well as the specialist lenders, and various tax planning strategies to help secure underlying profit and succession planning, too.
And many landlords and property investors took a chance and bought more properties, refinanced to improve their portfolio, spread the risk by leveraging, and using various strategies including buying to flip, PD conversions, HMO's, JV's etc.
BUT, now comes the change ......... and with it comes NEW CHOICES AND CHANCES!
The biggest change for us all right now, is that we are under the Government's 'Lockdown' guidelines and non-essential travelling is (rightly so) not allowed. Controlling the spread and infection of the potentially fatal coronavirus covid-19 disease has meant that all external property inspections, viewings, surveys, ... i.e. 'normal' property investor activity, has all but slowed down to a halt.
But that does not, and should not, mean that all property investor focused activity should stop.
In fact, now is the perfect down-time, to work cleverly and to stop, review and where necessary make fundamental underlying changes to your property investment business.
We all know BTL is a business and of course should be treated as one.
Your Buy To Let 'company' (whether you own one or more properties in a Ltd Company, or your personal name, or any other structure, let's just call it a Company for the moment), should benefit from;
capital growth
surplus income
positive net profit
focused succession planning
tax efficiency
safe environment for your tenants
robust maintenance strategy
legitimate underlying financial and insurance strategies
.... and this should therefore provide you with;
growing wealth, profit and a 'peace of mind' range of personal choices for the future, for whatever you want to do.
The Lockdown Landlord - what can you do right now?
There's so much to tell you, so here is just a summary overview and some suggestions how to achieve them;
spring clean your bank accounts - close and replace expensive utilities, check bank charges and move accounts if necessary. FREE bank account with online bank TIDE is available here
education - there are so many wonderful free forums to share best practice, ask questions and gain help in legal, financial, tax, lettings and other related matters. Try Property118.com and PropertyTribes.com as we think they are the two foremost leading online landlord communities
call your tenants to see how they are - build upon good relationships - always respond to tenants promptly and get problems fixed ASAP - If your tenant wants a rent holiday, try to negotiate some form of payment, if only to cover the mortgage - much easier to have difficult conversations with tenants if you’ve been fair to them
meet other like-minded people - join landlord associations, community Facebook groups,
join us as Introducer Partners and promote our mortgage and insurance products and earn a passive supplementary income - we are a long established financial services Company and we work with people who introduce new enquiries to us, for mortgage and insurance services, and we pay a commission for all completed cases. Join our team of Introducer Partners and start to supplement your own income by adding a financial services arm to your own business. Find out more here
save money - have you thought about the effects of your future borrowing options if lenders know you haven't kept a Contingency Fund secure in case of voids? Mortgage lenders use stress test calculations to ensure safe lending and to be confident that the borrower is indeed borrowing prudently too. Having evidence of an 'emergency fund' can often help get that case over the line when applying for a new mortgage or further advance. If you need savings and investment (including pensions) advice, let us know as we work alongside a brilliant Chartered IFA Firm who specialise in this.
still buying lots of separate property insurance policies? consider a flexible property portfolio buildings insurance arrangement. It costs nothing to get a quote, it could save you a huge amount of money and with one point of contact you can simplify your admin and pricing, too. Submit your details here and our colleagues will call you back and quote. It's as simple as that.
are you welcoming new tenants to your properties? we suggest that you should always meet them first (via Zoom or FaceTime if necessary). If this not possible and you’re using a letting agent, make sure your relationship with the agent is good and they totally get you and what type of tenant you want. We are portfolio landlords as well, and we speak from experience on this.
good tradespeople are gold dust - always pay them on time, your loyalty will be considered as very valuable at the moment and they’re much more likely to help in an emergency should you need them
review your mortgage arrangements to ensure that you are getting best value for money. Consider 2 year fixed deals to ensure that you are getting the absolute cheapest interest rate deal (maximise cashflow), or maybe 5 year deals if you're happy to secure a rate for that time. Either way, don't stay on the variable rate, you are probably costing yourselves too much money by not acting soon enough. We are a team of experienced mortgage brokers. Speak to us to see what your options are.
have you looked at how to rebalance your portfolio to bring the average LTV and overall costs down? By rearranging your LTV's across your portfolio, you could secure better rates on some of your properties and thereby save money, and increase your surplus income. Our portfolio rebalancing advice is free, so you have nothing to lose by asking us to review this for you. If we can reduce your % rates, you can start growing your wealth even faster. Find out now by calling us for a review and quotes
become digital - we now transact most of our business online without the need for our Clients to print, 'wet' sign and post back documents. The vast majority of our forms are now completed, digitally signed and returned, all online, and within minutes. You can do this too with your Company's documents. We use Signable, which is secure, robust, UK based and very user-friendly. Click here to set up your own account too.
don't take a mortgage payment holiday, unless absolutely necessary - there is such a misunderstanding over the word 'holiday'. This is NOT a break. It is a deferred payment. You still owe the money. It is not considered by the banks as a good act to implement. You are being perceived by the bank as financially distressed, unable to make your mortgage payments so quickly after the Lockdown came in to effect, and you are being recorded internally as having to ask for an arrangement to not pay because it's deemed unaffordable. You may or may not be in this situation, but if you are not and you thought this was just a welcome breather for now, you are potentially greatly harming your chance of securing best rate deals (if any at all) in the future, whether for new mortgages or further advances. Read our other Blog Post here for further information
give and support a worthy cause - if you do have a small token amount free at the moment, why not pass on some of your good fortune and help a needy charity, too. You may already have your preferred charity and that is brilliant if you do. If you don't (or you have a bit extra for somewhere else), H D Consultants has a chosen Charity for 2020, the Essex and Herts Air Ambulance Trust. We chose EHAAT at the end of last year, pre-coronavirus, but this year more than ever, all of our excellent medical professionals (NHS, private, carers, first responders etc) have truly risen to the challenges. And for EHAAT, every time a helicopter launches, it costs £2,200 as they are not an NHS service and they are not a Government funded organisation. If you would kindly help us to help EHAAT to carry out their regular calls, please visit our Charity 2020 page here.
get your WILL sorted! - right now, we are offering a FREE BASIC SINGLE OR JOINT WILL for every new mortgage or life insurance Client. Your new Will could be instructed, online, within 20 minutes, and it can all be arranged on your phone, tablet or PC / laptop. Read here for more details.
Lots to think about, and of course there's loads more not listed too, but do the basics, work with professionals, and become a robust Lockdown Landlord.
We hope this has all been of some help, and you have found it to be useful.
Lockdown Landlords still have lots of choice, there are of course many chances still around to benefit from, and with the useful pointers above, there are many ways to effect positive change.
We would also love to hear your hints and tips for all Lockdown Landlords, too.
Please leave your comments below ...
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