Nuneaton Investors VS increasingly difficult lenders

You’ll get the image as you read on…

Is it just me or have lenders become REALLY awkward all of a sudden? Not only with an individual buy to let but with company lending as well.

When I bought my first buy- to- let flat 18 years ago it was one of the easiest things to do. However, lenders have become increasingly stricter, pedantic, and damn right annoying over the last couple of years.

Don’t get me wrong, the lenders are great for what we need them for and a lot of us wouldn’t be able to play the property game without them. If you’re new to investing or buying in general, don’t let this put you off. The intention of this blog is to make people aware of the potential difficulties you could face when buying.

If you’re wondering what I’m talking about, here’s a few examples …

Moving goal posts and changing criteria

A landlord of ours recently applied to re-mortgage a couple of flats that she bought in 2006 through her company. When she originally bought them, they were in a block that was majority council owned (75/25) but this was never an issue…until now. The first lender she went to refused her a mortgage on the basis that it was majority council owned so, her mortgage advisor chose a lender that stated they wouldn’t let this affect the application. Three weeks later, they’re rejecting the application because of that exact same reason (cue angry swearing emoji). So, our landlord has wasted nearly 700 on valuation fees and has achieved absolutely nothing.

There have been other clients of ours who have gone through the majority of the buying process based on passing the initial lending criteria (good credit, income etc), only to lose out on the property because the lender decided to be difficult.

Changing the way they look at affordability-

Back in the day a lender would look at the income you were getting from a buy to let property, tick their box and chuck a load of money at you (that’s how I remember it playing out when I was 20). However, now, they look into your finances, specifically your debts, with a fine tooth comb. They’ll consider other buy to let mortgages you have, your own mortgage, credit cards, cars on finance, store cards, how much you spend on Amazon (thank goodness I don’t need to make an application at the minute!) etc. They remind me a little bit of the night walkers in Game of Thrones; creepy, unnerving, make you feel like your life is in their hands. Ok, so I’m a little dramatic but I know you know what I mean!

What can you do to help your mortgage application?

This blog isn’t meant to put you off buying but it’s intended to give you a realistic idea of what you’re likely to come up against. The best thing you can do is to get yourself a good mortgage advisor who will be at your side and fight your corner with the night walkers….I mean lenders.

I was talking with Alphie Cain from Diamond mortgages recently and he suggested that buyers should go to www.checkmyfile.com and complete a credit check search on themselves. This website combines 4 credit reference agencies together so it’s the most accurate representation of your credit file. Get your bank statements, ID, wage slips/tax returns ready in a file and then you can get in touch with a mortgage advisor and who should take it all from there. Should you discover that your credit score is not what you expect it to be, and you believe that there has been a false report made against you in the past, you may wish to get in touch with someone like this credit attorney in Denver, who could help you to defend your name so that you are able to correct the error and get yourself the mortgage rate that you deserve.

Property investment is still a great business to be in. Don’t’ let this put you off. Once you overcome the lenders (and solicitors *sigh*) you’ll be well on your way to enjoying your investment property and the fantastic returns!

Happy Buying!

If you want to contact Alphie Cain (as mentioned above) just click here

TOP TIPS for new Nuneaton Landlords/Investors

Even though the majority of the investors and landlords that we work with have been in the game for some time, we always love working with new landlords. Helping them find the right Greensboro realtors, giving rental advice, showing them the tricks of the trade, it’s all great fun! We are currently working with a new landlord/ investor and this is his story…

1.Think about who/how the property will be managed

We recently had a newbie landlord get in touch and ask if we could manage his rental property (always a great phone call to have). So, this guy is already ticking boxes on the “Things to consider as a new landlord” list by contacting us and asking for advice.

2. Consider the work involved in your new/current property to make sure it meets current regulations and standards

He bought a terraced house in Nuneaton through a property Auction (a scary prospect- even for those of us who are more experienced investors) and it is in need of some TLC. I offered to go and have a look at the house before he starts knocking it about. I’m glad I offered to do this and he’s DEFINITELY happy that I did because now, instead of him achieving a 6% yield, we’ve advised what he can do in order to achieve a 11% yield. He has a handsome budget and is prepared to put the time and effort into making some changes.

3. Get some people/tradesmen that you can trust on board

When I asked him who would be doing all of the electrics, plumbing, carpentry work etc, he looked at me with a blank expression as if to say “Sh*t! I have NO idea!”. In his mind, he was going to enlist a few friends to help him strip a few walls and do some painting but that’s as far as his planning went. HOWEVER, now that he knows me and has me on his side, he also has contacts for all of the construction, electrical and plumbing works.

It’s taken us 7 years to establish and get to know several workmen/tradesmen and know who is reliable and who we can trust, not only to charge a fair price but to also do a quality job. If you’re doing this on your own try to get people that come recommended by friends or family because this is a really tough decision to make. For example, when cleaning the property for new tenants you would want to make sure that the cleaners and professional carpet cleaning you might need to use to help are going to do a job that is good enough and leaves no room for complaints from tenants. It’s about who can you trust, be careful and you should hopefully have good results in property maintenance.

You NEED to have these things in mind when buying or thinking of renting your property out.

4. Make sure EVERYTING is as it should be in order to be on the right side of the law when renting your property out.

This is something our newbie landlord doesn’t need to worry about because we’re sorting it all out for him. We’ll be making sure all of the relevant certificates have been done, all relevant documentation is ready, we’ll be advertising it, doing viewings, doing comprehensive referencing and credit checks, drafting an up to date and approved Tenancy Agreement, arranging a full written and photographic inventory and doing a check in to ensure a smooth transition for his new tenant.

If you’re not using an agent to manage your property(s) then that’s absolutely great! But please, please, PLEASE make sure you know what you are doing. More often than not, tenants know more about their rights than landlords do and it WILL be back to bite you in the bum if you’re cutting corners.

5. Set the right rent price

Once again, this isn’t something our newbie will need to worry about as we’ve already informed him what rent he can get for his house (depending on the finish he decides to go for and if he’ll go ahead with the big reconstruction works or not).

Setting the rent is something you can do yourself by having a look online to see what other similar properties are renting for. Try and keep your comparable search to within 1 mile radius of your property, the same/similar layout (floor size) and the same amount of bedrooms. If there is another “similar” property but it has a driveway, garage and conservatory then do not use it as a comparable unless yours has the same perks.

6. Keep up to date with the laws and legislation surrounding rental properties

Don’t think that just because you’ve done all of the above and made it through the initial madness of property letting that you’re in the clear forever more. No, no, nooooo my friend! This is a long term commitment with annual certificates that need doing, property inspections, evening & weekend calls from tenants telling you about maintenance issues and leaky toilets or sinks. You need to be committed to this and make sure you’re keeping on track of everything.

I haven’t done this blog to put people off or to get more business by scaring you into using an agent (although it is a perk, I’ll be honest!). I have written it to make sure people realise that it’s not as easy as just “buying a house and getting a tenant in”.

If you are thinking of investing in Nuneaton, having your property managed (or just a tenant find) or would like more information on how you could increase your annual yield, please get in touch with us 02477 674545 or visit our website to check out our FREE YIELD CALCULATOR

Take care all.

Melissa

Nuneaton Property SOURCING for Investors…

Let us help you find the right property investment for you

Are you thinking about investing in Nuneaton? Maybe you’re a pro investor and could buy properties in your sleep or, maybe like some people we’ve spoken to recently, you’re new at the property investing game?

Either way, I’m delighted to announce that we are venturing into property sourcing for investors and our services will include a basic “property source” right through to quoting and managing the refurbishment of your newly sourced property as well as property management at the end of the process.

We will be with you every step of the way. Either holding your hand (metaphorically speaking of course…thanks to COVID 19) through it all (if you need a bit more reassurance and support) or just provide regular email updates with photos of the progression so you know that things are being dealt with.

You’ll know from this blog that Mariam and I love property and are always keeping up to date with what’s going on in the local community (town improvement plans, new build sites etc) as well as the Nuneaton property market as a whole. So, if you want to use our property sourcing service for a property investment in Nuneaton, please feel free to get in touch and we’ll be delighted to find you the next gem in your property portfolio.

Melissa