Belvoir Andover Wins at the 2013 National Belvoir Awards

This will be the second time Belvoir Andover has won an award at these annual ceremonies. Back in 2007 we picked up ‘Most Improved Office’ after doubling the size of the 8 year old business in just 12 months (see story at the foot of this page).

The award this time was in recognition of the outstanding contribution made to the charity efforts of Belvoir as a group who have now raised in excess of £25,000 for Macmillan Cancer Support. The award was given by celebrity comedian Ruby Wax and followed a brief speech by Macmillan representative Tanya Taylor who gave an emotional thank you to the whole of Belvoir for reaching this astonishing total amount raised.

Business co owner Greg Greatbatch and Lettings Negotiator Emma Bevan had trained and run the 2012 Bupa 10000 which was the exact same marathon course used in the 2012 Olympics (except they had to run the course 4 times!). For photos on this event, please visit our Facebook page and navigate to the photos album.

The award ceremony was held this year at the prestigious De Vere Hotel, Belton Woods for a glittering black tie dinner with high profile celebrity guest speaker Ruby Wax. Greg Greatbatch (Director) says ‘We are truly delighted to be recognised in this way. We feel this charity is such a worthy cause which touches the lives of so many. It was our pleasure raising the money and hope to continue these efforts in 2013.

7 investment traps that could harm your wealth

Avoiding these common pitfalls could be a key to long-term investment success.

1. Too many eggs in one basket

When putting together your investment portfolio it's important to ensure you don't end up with concentrated exposure to a particular type of risk. One obvious area is industry sectors: consider the banking crisis in 2008, and the technology crash in 2000. Any investor whose portfolio was over exposed to these areas would have seen a dramatic fall.

Investors who took a more diversified approach would have seen a far smaller impact on their portfolio. Having a well-diversified portfolio is a key way to reduce risk.

2. Over-diversifying

Just as damaging as putting all your eggs in one basket is over-diversifying a portfolio – sometimes dubbed 'di-worse-ification'. This can happen quite easily when building up an investment portfolio over a number of years. You can end up with dozens of quite similar investments, collectively delivering average returns.

A more effective approach may be to focus on a handful of favorite fund managers investing in different areas of the market. Our Wealth 150 list, which contains our favorite funds in the major sectors, could help you with this choice.

3. Paying too much in charges

Aside from investment performance, a crucial factor affecting your total returns is the charges you pay.

Consider two funds, each delivering a return of 6% a year, but one with an annual charge of 1.5%, and the other with an annual charge of 1%. If you invested £10,000 in each:

• The fund with the lower annual charge would be worth £26,533 after 20 years
• The fund with the 1.5% annual charge would be worth £24,114 – or £2,419 less.

Keeping costs to an absolute minimum could mean thousands of pounds more added to the value of your investments over the long term. We can help you keep costs to a minimum by tailoring our services to your exact needs.

4. Not taking enough risk

Like many investors, you may be understandably nervous about taking risks with your hard earned capital. However, not taking enough risk can be just as damaging as taking too much risk.

One of the main dangers from not taking enough risk is that the spending power of your capital could fail to keep pace with inflation. While money saved in the bank might seem 'safe', in real terms its value is gradually falling every year because of inflation. Inflation of just 3% per year will nearly halve the spending power of capital over 20 years.

We believe taking more risk, in order to try and achieve an inflation-beating return, is therefore vital for any saver or investor taking a long-term view. However it is still important to have an emergency cash fund of say 3 to 6 months salary.

5. Poor administration

If you have investments dotted around between providers and you ever need to make any changes, you will often need to fill out a myriad of forms, which makes it a far more laborious process, and may prevent you from acting.

Good administration is key to managing your investments effectively. A good administration system means you can make changes quickly, conveniently and cost effectively. If it's easy to make changes you are also more likely to act, improving portfolio performance.

Good administration also helps you to gain a good overview of your portfolio. How much do you have in each area? Is it time to take profits? Making these decisions is far easier when you can view all your investments together, at a glance.

Here at Belvoir Andover, we can take the burden of the administration of your property portfolio away. Our accounts package is approved by the Institute of Chartered Accountants and we can readily provide you with annual accounts which can be, if requested, emailed direct to your accountant. We are also more than happy to have a one to one financial review of your portfolio, giving you market trends, rent reviews, yield report (see if you are achieving what you set out to achieve) and much more, contact our team to discuss this 01264 366611

6. Paying too much tax
Quite simply, the less tax you pay on your investments, the higher your returns will be. Fortunately the government offers a number of tax breaks to encourage investment. Two of the most popular are ISAs and pensions.

ISAs - if you hold your funds or shares within an ISA there is no tax to pay on any capital gains, and no further tax to pay on any income. Each tax year you have an ISA allowance, this tax year the allowance is £11,280, and used every year the ISA allowance allows you to build a significant portfolio of tax sheltered assets. What's more on the majority of funds the ISA comes with no extra charge, so many investors receive these benefits free. The icing on the cake is that with ISAs you can withdraw your capital at any time, so they are suitable for investors who want maximum flexibility.

Pensions offer similar tax benefits to ISAs, with a few important extras. Firstly when you add money to a pension you receive income tax relief, at a rate that depends on how much income tax you pay. So, for example, if you are a higher rate tax payer you could receive up to 40% tax relief on any contributions you make. It's also worth remembering that with pensions you can't access your capital until you retire. When you do, up to 25% can be taken as a tax free lump sum, with the remainder used to provide you with a taxable income in retirement.

Please note the value of tax shelters will depend on your own circumstances, and tax rules can change over time. The value of stock market investments can fall in value as well as rise, so you could get back less than you invest.

7. Focusing on the short-term

Legendary investor Warren Buffett famously once said "You can't buy what's popular and do well". There is a lesson here for all investors. Many are tempted to over-expose themselves to the latest 'hot' investment trend. Often these will be companies or sectors that just seem to rise relentlessly, giving the impression that you "can't lose". In the past sectors such as technology stocks have experienced such a rise, followed by a sharp fall in value, affecting the portfolios of thousands of investors.

Before you choose an investment, ask yourself: what is your attitude to risk? Would you be happy to hold it for the long-term? Do you think the shares represent fair value? Are there other overlooked areas which may offer better long term opportunity? Property can typically return you a minimum of a 10% yield and therefore represents a strong and reliable (when compared to alternative investments)

If you are thinking about investing in property we would recommend that you take independent financial advice. We are more than happy to help anyone get on the property investment ladder, please call Phil Pinkney at Belvoir Andover on 01264 366611 or visit our website at www.belvoirandover.com

Avoid Property Trading Tax by Belvoir Andover

 

Avoid Property Trading Tax top

Some people regularly purchase run-down houses, do them up and sell them on. If you do this as part of your building/property development business, the profits made on the sale of the properties may be taxed as trading income (tax rates: 20%, 40% or 50%). If you let the renovated properties, then sell them at a later date, the profits made on those sales will be taxed as capital gains (tax rates: 18% or 28%). The position is less clear cut if you live in each property for a period either during or after the renovations are undertaken. The Taxman is keen to charge any profits made on the renovated property as trading income, because if the profits are categorised as a capital gain, that gain may well be exempt from tax on the basis that the property was your main residence. For the Taxman to prove the money made from the property is trading income he must show the owner's motive for purchasing and renovating the property was to make a profit, and not simply to make the property more comfortable for the owner to reside in. This is difficult to prove. If the owner is a builder by trade the Taxman may also argue that the property renovation was undertaken as part of his building business, even if he also lived in the property. The Taxman may say the profits should be taxed as a trade if the owner has a history of purchasing and renovating many properties and living in each for only a short period.     If you would like to save more tax and get advice from property related specialists, please contact Greg Greatbatch at greg.greatbatch@belvoirlettings.com or telephone 01264 351222 (opt 2).   Belvoir Andover has been operating as a lettings specialist in Andover since 1997. Belvoir Lettings is a national network of franchise offices dedicated to offering the highest possible levels of customer service to both landlords and tenants. Visit www.belvoirandover.com for more information about us.

AN EXPERT ‘BUY-TO-LET’ CHECKLIST FROM BELVOIR

Buying-To-Let - popularly hailed as an alternative to badly performing pension funds – was slowed down by a recession that squeezed mortgage deals and discouraged housing investment.

 

But a reviving market is now generating more attractive mortgages, stimulating property prices and generally raising rent levels again, says Phil Pinkney, director of one of the UK’s leading residential lettings specialists, Belvoir, which has an office in Andover.

"Advice for new Buy-To-Let investors can still be contradictory and confusing," he says. "Like most things if you’re Buying-To-Let, you need to do it right and when a considerable amount of your own money is involved it becomes absolutely critical."

That’s why Belvoir has prepared a definitive checklist for anyone wanting to make a success of an investment in residential rental property. 

It offers a selection of do’s and don’ts, "But", says Phil

"it’s only guidance – we prefer to sit down, face-to-face, with a new potential investor and offer more solid professional advice, since everyone’s circumstances and expectations are very different. "

 

BELVOIR’S ‘BUY-TO - LET’ CHECKLIST 

 

1. Research your market – the area, the people you want to rent to, the available property, the benefits and the risks – and keep up with letting industry news.
2. Choose your preferred tenant type. Students? Young professionals? Families?
3. Find the right property that will appeal to them – houses, flats, older properties, newer builds? Students may not need anything particularly stylish but a young professional might.



Phil Pinkney - Belvoir Director

4. Then pick the right area where they want to live – parents may want to be close to schools and shops; wage earners need to commute to work; students have to be near to their college or university. Look outside your own area if necessary.
5. If local crime statistics are available, take a look and bear them in mind.
6. Study the condition of any property you are interested in – from roof, guttering and windows on the outside to condensation, leaks and electrical wiring on the inside. Be conscious of fire risks.
7. Check whether extensions or conversions have met planning permission or building regulations.
8. Don’t accept the first mortgage offer you get. Shop around. Gather information. Compare.
9. Get the maths right – your investment might give a better return in some other way. How much is the right property going to cost? Is the rent you expect to get enough to cover the mortgage and give a profitable return? Does the potential capital growth add up to a good investment?
10. Talk to an independent lettings agent before you buy. Most mistakes involve either wrong location or wrong price paid for a property.
11. Don't be greedy – Buying-To-Let should be approached as a long-term investment, not a quick fix.
12. Be prepared for costs that can upset your calculations – ongoing maintenance, small and major repairs, advertising, future rate rises, mortgage costs, agents fees, tax, falling house values, periods when you can’t find tenants and the property is empty.
13. Get the right insurance cover – and that can include insuring yourself against tenants who fail to pay rent.
14. If you’re going to manage the let yourself, be prepared to sacrifice your evenings and weekends!
15. If this is likely to be more of a drain than you are prepared for, seek out a professional, fully accredited lettings agent who, for a fee, will look after your property, your interests and your tenants on your behalf.
16. As well as being completely up to date on legal, legislative and property industry issues, a local agent such as Belvoir will have expert knowledge of the best rates from local electricians, plumbers and so on, which in itself, can be worth a weight in gold. Belvoir local offices do not make any charge for pre-purchase advice, property visits or rental valuations.

"Above all, before you do anything, get professional advice ," says Phil.

"As the legendary, oil well fire-fighter, ‘Red’ Adair, once said: "If you think it’s expensive to hire a professional to do the job, wait till you hire an amateur."!

 

For more information or to book an appointment with Phil or Natasha, please contact Belvoir Lettings on 01264 366611 or view more information on our website: http://www.belvoirandover.com/landlords.html

 

Three Words That Can Save The Day

Three words can make or break deposit disputes between landlords and tenants … inventory, inventory, inventory.

“Just as ‘location’ is a key word in buying a property, ‘inventory’ is a key word in renting it,” says Greg Greatbatch, Director of the country’s leading residential lettings specialist in Andover, Belvoir, which has an office on Winchester Street.

Disagreements over the condition of property, at the end of a tenancy, is a major reason for disputes arising over how much of the tenant’s deposit should be returned, because landlords often deduct the cost of cleaning, replacing or repairing household items, furniture and furnishings that tenants say were like that when they moved in.

“A good quality inventory with clear photographs - agreed, signed and dated by both landlord and tenant – can overcome all argument about the condition of a property and its contents,” says Greg who runs the Belvoir office on Winchester Street in Andover “What would otherwise be a matter of opinion becomes a matter of fact.”

“When you consider that, according to current Land Registry data, the average property price in Britain is now £225,000, it makes a lot of sense for landlords to protect their assets with a quality inventory. Professional lettings agents such as Belvoir are very experienced in carrying out a thorough and detailed inventory report – providing a solid assurance to landlords that their interests are well protected.”

There are other basic ways of making sure that relationships run smoothly.

When a tenancy starts, the landlord and tenant should each keep jointly signed tenancy agreements that set out terms, conditions, obligations and responsibilities on both sides. If a property in not fully managed and the landlord does not have an agent, they should both be present to go through the property, discuss any concerns and agree the inventory.

Tenants should also meet up with landlords or their agents for any periodic inspections during the tenancy – at least two or three times a year to ensure there are not any serious problems with the property.

Landlords should keep relevant invoices, bills, work records and household receipts as evidence of expenditure, whilst tenants should keep copies of household bills, since they should not be arranging for any works or alterations to a rented property without first consulting the landlord or agent.

And when the tenancy is over both parties should be present at the ‘check-out’ to discuss any problems and reach agreement over any deductions from the deposit.

“Accidents happen but so does normal wear and tear,” adds Greg “If both landlords and tenants stay realistic then many quarrels can be settled before there’s any need for the dispute resolution process.

“In fact there is another key factor in all this – it’s called ‘communication’. Done properly, it can save an awful lot of trouble.”

BELVOIR Andover is joined by Natasha Conti

Natasha Conti - The new Manager of our Andover office !!

Many of you will know that David Rouse, our former manager has now semi-retired, taking a back seat at Belvoir but is still negotiating behind the scenes.

This has meant that we needed to find someone fresh, dynamic and able to improve overall customer relationships, satisfaction and ultimately bring in more clients to our business.

Natasha joins us from one of Southampton's leading letting agents, having managed a portfolio with over 600 properties she has an in depth knowledge of the whole lettings process and property law. Having worked in Salisbury, Southampton and Andover she has a desirable valid understanding of the rental and investment market particularly in Hampshire and Wiltshire. Her proven success has been down to her inventive and motivated techniques to reduce property void periods and positive property productivity. Natasha has been in the property industry for a number of years now and has a real passion for the industry looking to build her own portfolio. She has key knowledge of the local and national market and has given various speeches at property investor meetings, introducing new investors and landlords to successful rental strategies. She is motivated to LET your property.

Natasha says 'Andover is such a great town for investment landlords, I am looking forward to meeting and building relationships with Belvoir's clients. I am motivated to go that extra mile for current and new landlords to really set Belvoir above the rest, introducing new landlords to the benefits of Andover's leading letting agent'

Visit our website for more information about how Natasha and all the team at Belvoir Lettings can help you http://www.belvoirandover.com/

 

RENTAL YIELDS ARE AN EFFECTIVE PROFITABILITY BAROMETER

New investors to the buoyant, residential buy-to-let sector enter for one of two reasons. Either they’re investing for small rental returns in an area with large capital growth or they’re investing in an area and property known to produce a high income. Either way, 'rental yields' are crucial to measuring their success and need to be fully understood and properly calculated.

They come in two forms – gross and net – and whilst neither are 100% accurate, they are the most useful barometer a landlord can have.

Phil Pinkney of leading UK lettings specialist Belvoir, which has an office on Winchester Street in Andover says: “Newcomers to the buy-to-let market must be prepared to look in detail at the expected 'yield' from a property and have realistic expectations for the return on their investment."

“Whilst we acknowledge that some property purchases will always be made by the heart, it is essential to be ruled by your head. Quick and easy rental yield calculations will provide just that and at Belvoir, our staff are always happy to advise landlords on how to formulate them,” he added.

Belvoir has a structured investment advice plan which it presents to all prospective landlords and offers the following public explanation of rental yields:

Gross Rental Yield:

What is it? In short it’s the expected annual rental income of a property expressed as a percentage of the total property value.

Why is it useful? Whilst not being wholly accurate in terms of what you receive, it is easy to formulate before purchase, provides a good yardstick for comparison and increases the likelihood of a successful venture.

How is it calculated? In four simple steps.

1. Establish the probable monthly rent – this can be done by looking at similar properties in the area. If you’re unsure, ask at your local Belvoir office or visit www.belvoirlettings.com

2. Establish probable yearly rent – Very easy, just multiply the monthly rent by 12

3. Divide the yearly rent figure by the sale price of the house

4. Multiply by 100 to get a percentage. This is your gross rental yield.

What do I do now? Once you’ve calculated the gross rental yield for a property look at how its yield compares with other properties in the area, the area average and the national average.

“We advise all landlords to conduct gross rental yield calculations on a number of properties before making a purchase. The first property you see may have been the one that tempted you into the sector but it may not always be the best investment. Buy-to-let can be very profitable but only if treated like any other business opportunity,” added Phil.

Net rental Yield:  

What is it? In short it is a post-purchase calculation of the total rent received minus the expenses the property incurs expressed as a percentage of the total property value.

Why is it useful? If the figures for expenses are correct this is a very easy way to monitor the profitability of your purchase.

How is it calculated? In seven simple steps

1. Establish the monthly rental amount – this should be listed in the tenancy agreement.

2. Multiply by 12 to establish a yearly income.

3. Subtract the percentage of the year that the property is unoccupied – if applicable

4. Add together the yearly outgoing costs - insurance premiums, replacement of fixtures and fittings, periodical property redecoration, maintenance, ground rent if the property is leasehold and the lettings agency fee (for a very competitive fee and service contact Belvoir).

5. Subtract the total outgoings from the yearly income to get your net income

6. Divide your net income by the total property value.

7. Multiply by 100 to get a percentage – this is your net rental yield.

What do I do now? Once you’ve calculated your net rental yield you need to compare it with the initial target you set. If it’s higher, you need to analyse why in order to be confident the trend will continue. If it’s lower, the root cause needs to be identified. If you cannot reconcile them, you should seek expert advice to help resolve the issue.

“A landlord is more likely to be successful if they adopt a professional approach. At Belvoir, we recommend all our landlords conduct regular rental yield calculations and store their results on an excel spreadsheet for year on year analysis. It is good practice and something we are happy to help with and advise on,” added Phil

“In this current economic climate, buy-to-let investors have the potential to achieve much higher returns than by putting their funds into a traditional bank account with very low interest rates.

“At Belvoir we always strive to achieve the best return for our landlords and we can offer friendly and expert advice on how to maximise yields,” he added.

If you’re a prospective landlord keen to know more about rental yield information or any other aspect of buy-to-let investment, then please call Belvoir on 01264 366611 or email andover@belvoirlettings.com. One of our team will be happy to assist you.