Take Your Property Investment to the Next Level

Clearly, if you are investing in property you are hoping to put your money in a relatively safe place that should grow with time. But is there anything you can do to maximise these profits? Here are a few top tips for making the most of your money when investing in property:

Speculate to Accumulate

Sadly, when buying property the best way to make money is to spend money. A good quality renovation is likely to boost the amount of money the property is worth and as a result more than recap the price of your investment. One of the most popular investments is the building of an extension.

Be conservative with your money though. Don’t be flash but whatever you do don’t be cheap either. Get multiple quotes for work and look for the people that will do the best job for the money. A quick and quality job will save you a lot of money in the long run.

When it comes to residential property, if possible create a loft conversion as this will give you an extra bedroom and either an en suite bathroom or a walk-in wardrobe. This means the property will move up into the next size band – the more bedrooms you have the more the property will be worth!

Appeal to the Masses

Whether you are looking to invest in the property to rent, sell or even use yourself for a while, opt for a neutral colour scheme and simple fixtures and fittings so you will not offend tastes if and when you decide to rent or sell. A salmon pink or avocado bathroom suite isn’t that appealing to most.

That’s not to say a property should not have any personality at all, just don’t go mad. Clear the clutter and make your building a show property.

Know What You Are Spending

If you have ever watched a property development or renovation programme on TV then you will know that 90% of the time the costs spiral out of control and more money is spent than first budgeted. Don’t fall into this trap or you’ll take a drastic cut out of your profits.

Make a detailed list of expected costs and calculate actual prices as you go along to see if you are on track or not. If you can grab a bargain then you may even come in under the expected overall price.

Work Quickly

Many tradesmen will charge by the hour or by the day so make sure you are ready for them. Even if they are sat around waiting for work they will still charge you for their time.

You’ll also want to work quickly if you are renting out your investment as the longer the property is empty the lower your annual income will be. A quick turnover will guarantee little disruption and maximised profits. This should be easy and run smoothly with carefully vetted tenants who create little or no damage to the property.

Another thing of course is that, if you get a good deal in the first place then you are more likely to make big profits. Get in contact with your local commercial finance brokers before purchasing and see what they can do for you!

The Worst Mistakes Amateur Property Developers Make

The possibility of getting a second income through property developing can be tempting for many. There are dreams of making a quick buck by giving a house a lick of paint or the idea of working your way up the property ladder by turning over properties in a short period of time for profit. But for many amateur property developers a lot more time and money is wasted than they would have liked.

From over-valuing a property to unexpected costs, here are a few of the worst mistakes amateur property developers make:

Borrowing More Than Can be Afforded

Many lenders often believe that they should borrow as much money that they possibly can from the banks but this can often lead to problems. Where possible you should not borrow more than you can afford. Even if you think the sale of the property will make you a millionaire. Shop around for the best deals from development finance lenders and be realistic about your budget.

Buying in the Wrong Area

What new property investors need to learn is how to spot a good area to invest. You don’t want to be in an extremely expensive area and not every run down area is up-and-coming. And once you have found the perfect area if the house is on a main road, has no parking or poor transport links expect to take a discounted price.

One of the easiest ways of figuring out if the area is ‘right’ and if it is likely to sell is to simply ask yourself “would I like to live here?” Because if you wouldn’t live there how can you expect anyone else to.

Picking the Wrong Builder

Some builders will see you coming – the perfect amateur developer to con out of their money. So make sure to do your research, know your prices as not to get fleeced. You hear of all these horror stories such as on Cowboy Builders where work is below standard or simply not completed so make sure to use a well reputed builder.

Get references from previous customers and make sure to get a fixed price contract so if they drag out the work it won’t cost you anymore money.

The Quality Conundrum

Finding the balance between fittings and fixtures that look expensive but cost little can be tricky for a first time property developer. The finish of the property will also greatly depend on your budget and your intent for the home – will you rent or sell?

If you intend on renting then you can usually get away with a generally lower quality of finish. However you still want items that are long lasting or you will end up forking out a fortune in repairs. If furnishing to sell on then a higher quality is often required as if not buyers would expect a discount from the asking price in order to afford to replace these bits.

Not Thinking Before Acting – Planning Permission

Amateur developers are often so eager to get started that they start ripping things down before their planning permission comes through. Never assume permission will be granted or you may find yourself rebuilding what you’ve knocked down or the opposite.

Are you thinking about a career in property developing? Make sure not to make these mistakes!

The Rise of the London Mini City

London’s suburbs in the west are set for a property price boom, say experts. East London has seen a gentrification of late but the west is set to steal the attention in 2014. The west is due to see 23,000 new homes and the creation of a brand new mini city.

Since the millennium the East End has seen a lot of attention. This was especially so during the Olympics. The west is now having money ploughed into it for new building projects and the improvement of transport links. With these scheduled changes the western suburbs are looking like a highly desirable place to invest your well-earned cash.

Future Developments

Ealing’s former gas works site next to the Grand Union Canal is set to be developed by company St James with 3,750 houses. This 83 acre site is ripe for development as a great example of a brownfield site. As well as homes this new waterfront community is set to be the location for shops, green spaces and a school, and therefore is a great place for new business. It may take up to 25 years to build however so watch this space.

There are many other projects under consideration including the Drayton Garden Village development. This project may not be as large as in Ealing but it will still bring plenty of new faces to the area. It is planned for 775 homes to be built on the former Royal Air Force base with their architecture inspired by the garden city movement of the 30s.

Hayes is also seeing an overhaul with its disused industrial areas having a makeover. The Old Vinyl Factory will form a quarter of 630 homes, fashion boutiques and studios as well as social areas such as bars, cafes, a cinema and a museum.

The BBC Site at Wood Lane  

With the move of the BBC studios from Wood Lane to a new site the area has been left ripe for redevelopment. A new Canary Wharf-like office complex is to be built on the 43 acres of land along with 4,500 houses. Imperial College are getting in on the action too by building a new campus on the site as part of the White City Opportunity Area. This new campus will hold a centre of medical excellence for academic research as well as accommodation for workers and postgraduate students.

For Business

The Hammersmith Heathrow M4 corridor has always been a popular commercial zone as home to companies such as GlaxoSmithKline. Thanks to the development and growth of the airport, areas such as Hounslow, Hayes, Slough, Southall and Staines are now reaping the commercial benefits. These are quite industrial areas and at the moment are probably not the best place to live.

Crossrail

A new transport superhub in Old Oak Common, near Wormwood Scrubs, has been proposed for Crossrail and HS2. If successful, this will become a catalyst for change in this area and is likely to create something of a boom in western suburbs. The Crossrail will open in 2018 cutting transport times significantly.

Areas from Southall to Acton will see a boost in property prices especially from interest from commuters to London. Much of this area is currently disused and architect Sir Terry Farrell has a master plan to build a ‘mini city’ here. This mini city includes 10,000 new houses, 20million sq ft of office and commercial space.

Are you thinking of buying property? Well, if you have property development finance in place take a look at West London. You may just make yourself some money.

Top Tips for working for yourself: Cashing in on your services

Working for yourself is great, you have much more freedom than a conventional 9-5 and you have a bit more freedom to pick and choose your clients. While there are many perks to being self-employed there are many things you will need to deal with that you probably haven’t prepared yourself for. The most important skill you’ll need to have is being able to cash in on your services.

People don’t like letting go of their money, often making it difficult to get regular payments. This is what you need to know:

Be brave

A lot of people shy away from debt collection, they may not want the confrontation or they may feel rude asking for payment – but if you don’t ask, you won’t get! The worst thing you can do in this situation is not ask and allow your customers to receive your services without paying for them. The second worst thing you could do is cause a massive argument with the client over payment, as they will probably stop using your services. Approach them in a clear and calm manner, showing them the work you have done and remind them that they are contracted to pay you – a little patience and understanding combined with hard facts will help to wrap up this situation.

Negotiate a win-win situation

Sometimes one party will feel as though they are losing out in the deal – perhaps the work wasn’t exactly what the client asked for or the payment wasn’t enough for the work provided. These can turn into very tense and negative situations unless they are properly controlled. If you feel as though you are in the wrong then renegotiate the price they have to pay; while this may feel like a backwards step, some money is better than none!

Send an official payment request

If after initial contact the client still has not paid for your services then send them a letter requesting full payment by a certain date. While this may seem cold and forward it is likely to grab their attention as they know that you are serious. Don’t be afraid to set a due date for payment, giving them around 10 to 20 days to make the payment from the time they receive the letter – this way they won’t panic about payment but will feel the need to make a quick payment.

Invoice factoring

When this becomes a common problem it may be a good idea to take on an invoice factoring broker & service to give you a regular income. Invoice factoring gives you a certain amount of the total sum owed once the contract has been made and provides the rest, minus a small sum, once the money has been collected. Best of all, you wouldn’t have to collect the money yourself as it would become the broker’s prerogative to chase the client for the money. This can help you to maintain good relationships with your clients while getting the payments you need and deserve every month.

The Best “You Owe Me Money” Letters

If someone has ever owed you money then at some point or another you’ve undoubtedly penned a strongly worded letter asking them to pay up. Many of these are very formal and professional running along the lines of:

‘We are disappointed to find that you have not paid your bill of [x amount],
you have 10 days to pay this debt until we take further action.’

However, there are hundreds or possibly thousands of cases where these letters aren’t quite so PC and formal. In fact, some are the most sarcastic, passive aggressive, give-me-money-or-else pieces of prose we’ve ever read. Here are some of the best:

Making it personal

There’s nothing that works better than a personal approach, especially if you are a freelancer or a small company. Write them a letter by hand, detailing just how much them missing their payments affects you. Normally this will appeal to their sense of humanity and they will quickly pay up out of guilt – tailor this to your audience however, some people will not bend to your pleas.

Note: don’t try this on fictional characters:

‘Dear tooth fairy,
I lost my tooth on 23 of Oct. Now it is Nov 12. I lost my tooth in pizza. I lost both today. You owe me $1.00 not to be hard but I need money.’

(Credit: http://cdn-ugc.cafemom.com/gen/resize/282/320/80/2011/07/13/14/2w/r4/poqpbsc3y8.jpg)

Play it passive aggressive

While getting angry may make you feel better it often makes things worse and won’t be helpful for collecting debts. That being said, being passive aggressive can be worth its weight in gold. There are some brilliant debt letters out there from people needing payment, the best one we’ve seen so far is this:

‘With the holidays approaching, there is no time like the present for ‘presents.’ If you have received this email it is because you owe me money for some reason. As a ‘hassle-free’ gift idea, it would be great if you simply mail me a check for the amount you owe.’

(Credit: http://farm6.static.flickr.com/5090/5218412042_949c10cd44_o.jpg)

 

Public shaming

There’s no point beating around the bush, if someone owes you money tell them straight. If they still refuse to pay then a public shaming may be in order. There are examples of this everywhere, from family members shaming their relations with just how much money they owe to companies flagging up clients. One clever tactic was used by a web design company, harming their reputation and letting everyone know they haven’t paid by changing their homepage to a note about their failure to pay.

‘[Client name] preferred to ignore our invoices instead of paying them. As a result this website is no longer operational. We regret any inconvenience this may cause for you as a customer of [client], however it is a necessary measure in getting what is rightfully ours.’

(Credit: http://farm9.static.flickr.com/8228/8475052192_8a1a4ac854.jpg)

Being sarcastic

Sick of playing the good guy? Be sarcastic. The more outrageous the better! This is an excellent approach for winding people up until they beg you to take out invoice factoring so that they never have to be bothered by you again. However, be prepared for people to return fire with their own insanely annoying levels of sarcasm and NEVER reply to an email from David Thorne.

‘I do not have any money so am sending you this drawing I did of a spider instead. I value the drawing at $233.95 so trust that this settles the matter.’

(Credit:http://www.geekologie.com/2008/11/13/spider-1.jpg)

Get angry

When all else fails it is time to get angry. Force invoice factoring on them if they are incapable of paying on time, take legal action if they fail to pay at all and think about the bailiff approach if you continue to not see any money. Alternatively you could write them a strongly worded letter demanding your hard-earned cash to be paid up immediately or you’ll get very, very cross. The best thing you can do is stop every service you are doing for them and refuse to cooperate until they make the payment – make sure you tell other service providers just how awful they are at paying. See how they respond to that!

The World’s Most Infamous Debt Collectors

Let’s be honest here, nobody likes a debt collector. Generally, you’re already stressed out about owing money without someone coming around and hammering on your door asking for money. If the person you owe money to is kind you may only have to deal with invoice factoring people, but keep abusing your credit and you may open the door to some rather unpleasant folk.

Not all debt collectors are horrible bullyboys, some famous faces have filled this job role at one point or another. Here are some of the names you may recognise:

Mickey Rourke

Almost unsurprisingly, Mickey Rourke has a bit of a dodgy past that includes working as a heavy for some gamblers in New York. From the sounds of his antics, he is one debt collector you really would not want to open the door to – especially considering his use of violence and extreme threats to get you to pay up.

Jude Law

Okay, maybe this isn’t a real life story, but he was a force to be reckoned with in the 2010 hit Repo Men. Let’s just be glad that we can’t buy artificial organs on credit – it’s bad enough having your car repossessed but at least it doesn’t kill you! Sapochnik’s film paints the future in a very scary way – hopefully when artificial parts do come around the finance packages involved are a bit more flexible.

The Repo Men

Before being axed by the Office of Fair Trade, Channel Four’s hit series ‘The Repo Man’ followed the debt collecting firm, Donegal Finance Limited. The series featured the repossession of assets from cars to TVs, including one couple who bought a second hand car without realising outstanding debts were tied to it. It was the strong-arm approach to debt collecting that forced the OFT to revoke their licence and suspend the show.

Billy Connolly

Similarly to Jude Law, Connolly has only played a debt collector on the big screen – but boy was he scary! His character was the notorious Nickie Dryden, a debt collector with a reputation for torture and murder. The Debt Collector shows the world of the debt collector in a very negative light, portraying his struggle with the law with the crooked ins and outs of the business.

William Jackson a.k.a Action Jackson

Action Jackson earned his nickname from being a juice man or debt collector for the Chicago mafia. The Chicago Police described him by saying that he had the body and strength of a giant but only the mind of a child, making him a perfect man to carry out collections for the mob. Unfortunately, a life of collecting mafia debts didn’t save Action Jackson from a grizzly death, as he was turned on by his own when it came out that he was a rat.

Top Tips for Working for Yourself: Understanding Finance Options

Working for yourself poses enough potential trouble and stress without having to constantly worry about the money side of things. You know that you need to consider it, but you need to be able to venture into new markets or expand your services in order to succeed. There are many finance options available to you; here’s what available to start-up businesses and self-owned companies:

Government funding

The UK government is working hard to regain the country’s economic stability; part of their strategy is to provide funding to individuals who plan on starting up a new business. However, many of these grants work on the basis that you are offering employment to others – although there are still schemes that help freelancers to start off. Don’t be put off if finance options from these sources don’t immediately seem to jump out at you, it may be worth contacting your local council to see what business funding is potentially available.

Business loans

Banks and building societies have a huge range of different loans available to people who wish to start up their own business. Talk to your business finance brokers to find out what different types of packages are available to you and what best suits your business needs. From buying offices and office equipment to providing funding for potential business ventures – bank loans for companies cover a huge range of needs. Thanks to the current rate of interest, you can get very affordable loans with low rates, making starting up a business or venturing into new markets very affordable.

Selling stocks and shares

If you already have a business set up and operational but you need to bring in more capital then you can have the option of selling shares in your business. While many first time business owners don’t like the idea of this, it is a great way of bringing in additional finance – just make sure that you retain 51% of your shares! If you don’t want to release your shares to the public domain then there is the option to ask friends, family or business partners to invest in your company. There are also several sources of equity funding such as ‘business angels’ or ‘crowdfunding’ where you can potentially get a large amount of funding designed specifically to help with starting up businesses, these need to be applied for directly with all your company’s details.

Take the tax breaks!

Many new businesses struggle because they aren’t aware of the tax breaks they can receive, often meaning they are spending much more than they need to be. By sitting down with a financial advisor and learning exactly what you can claim back you could potentially save yourself thousands every year! While this isn’t strictly a finance option, it is a great way to find additional cash in your business without having to go through huge changes – make your money work harder for you!

Top four uses for bridging finance

Sometimes there just isn’t enough capital readily available to you to do what you need, in these types of situations bridging finance could be the right option. Bridging finance is essentially a short term loan that gets to you extremely quickly, giving you the equity you need to do what you want.

Talk to any bridging loan broker and they will give you a list as long as their arm for what bridging loans can be used for. We know you don’t want to listen to all the spiel, so here are the top four most popular uses:

Speedy purchases

If there is a property on the market that’s going fast and you don’t have time to go through the lengthy process of acquiring a commercial mortgage then a bridging loan can be used to make the purchase. This type of financing is very quick, with the money being available to you the next day in some cases, letting you buy that quick-moving property before it disappears.

This can also be used for when you’re being pressured into buying before you’ve managed to sell your old building. In this situation you have funds tied up in your existing property which, if available, would pay for the new building – bridging allows you to make this transaction without forcing you to take the first offer you receive.

Buying land

More often than not, if you’re seeking to gain development finance to build or renovate properties you will be required to own the land before lenders will consider it. Bridging finance allows you to purchase the land, giving you additional security to acquire further financing and buy you more time to obtain a suitable mortgage.

Unlike other financing, bridging can make up 100% of the funding – regardless of the land being bought. Bridging can be used to buy land with or without planning permission or agricultural restrictions.

Bridging to development

Bridging and development finance are completely separate products, aimed at lenders with very different needs. However, a bridging loan broker knows that the two can work very well together and in some cases you may require bridging finance to gain development. Some development properties would not meet the lender’s credentials for funding as they currently stand and requiring some work to be done before they would consider it. Here, bridging finance gives the developers a chance to make essential changes, improvements and preparations needed to put together a development finance proposal that is likely to be accepted.

Renovations

Found a property that suits you to the ground, but upon the valuation you find that it is not mortgageable? This problem isn’t uncommon, especially in fix-me-up buildings or properties which have been empty for a long time. By taking out a bridging loan you can free up the equity needed to make the changes that will allow you to take out a traditional mortgage. This is also a great option if you’re planning on knocking down the building to free up the land it stands on– either to sell on or rebuild.

What is the future of retail in South Wales?

Wales is currently at a tipping point when it comes to retail, something needs to be done in order to revitalise town centres across the country. Many towns are a barren wasteland of empty buildings and charity shops, a factor that needs to change if retail is to make a comeback.

A new survey by the Centre for Retail Research has estimated that around a third of all shops in Wales are at a real risk of closure. Before we can make any suggestions as to how this can be prevented, we need to understand why retail is suffering.

Online shopping

In recent years, more and more stores have started to offer online shopping which allows you to browse a larger range from the comfort of your own home. Shops have essentially shot themselves in the foot with this move, as many regular shoppers find that there are many more benefits to making their purchases online. As a result, the high street shops see a large reduction in their sales, affecting their profit margin to a point where management have to consider closing the store down. When this happens the high street is drastically hit as there is even less incentive for people to visit when the big name shops are no longer there.

How can this be changed

Internet shopping is here to stay; however, with smart retail operations, businesses may be able to make an impact. Instead of taking out large commercial mortgages for a huge physical space, shops need to use both online and offline retail options – helping to bring foot-traffic back to town centres with ‘in store only’ offers and deals. Companies taking out commercial finance in Cardiff or Swansea for shops in the city centre can pay less for premium space as they require less footage. This is better financially for most large retailers and gives customers a greater incentive to visit their local high streets.

Changes to business rates

The Welsh Government has decided to follow the rest of the UK in postponing any changes to business rates by two years, meaning that there will be no change until 2017. Had they decided to re-evaluate the rates in 2015 as planned, we could have seen a drop of up to 30%. However, rates are still reasonably low, with commercial finance in Cardiff being taken out at the pre-recession values of April 2008. To encourage more businesses to take root in Welsh towns, the government should offer more support to retail businesses, which would eventually lead to a stronger economy.

Empty shops

As it currently stands, around one fifth of Welsh shops are empty – this is a significant proportion of the high street and something which needs to change. Many buildings are being used by charity shops who currently receive a reduced rate on rental; however, this may change as a result of a new review into business rates for charities. Unless businesses and charities start receiving lower rates it is unlikely that new companies will be seen taking out commercial finance to start up new shops, cafes and businesses.

How to get the most from your commercial finance brokers

With a host of wide-ranging banking contacts and a cavernous knowledge of the financial industry, it’s little wonder that property investors find that working with commercial finance brokers is a simpler, not to mention cheaper, way of doing business.

Through one, you’ll be able to source finance options for your investment that you either wouldn’t know about or wouldn’t be able to access.

Like any other relationship, one between a broker and an investor is a mutli-faceted one – if you scratch his back, he’ll scratch yours. How can you get the best borrowing and the most reasonable rates from your commercial broker?

Get your accounts in order

You can instruct the best broker in the land, but sometimes he’s only as good as the client he’s working for. And when you’re an investor looking to buy some commercial property to either rent, renovate or sell, you need to justify your purchase to the lender – and that means justifying yourself. You’ll need to have done your homework about your potential property and what profit margin you can expect in the next few years, as well as showing them a few years of business accounts. Plus, the more profitable you are the better, as lenders will deem you less of a risk and so potentially lend to you at more competitive rates.

Give as much detail as possible

The more that you can tell your broker about your business plans, the more competitive options they’ll be able to offer you. For instance, if they know that you plan on further investment in a specific sphere, they can utilise that in negotiations with lenders. Or they may be aware of specific legislation in your industry that could get you a better deal – all you have to do is let them know where you’re at. Remember, it’s their job to provide you with a solution – you just have to say what you need.

Decide your price

We’ve already established that a finance broker will save you more money and time than the small fee you usually pay, which is usually in the region of £250-1500. Some command a fee up front for their services, or others will request a small percentage (perhaps 0.5%) of the mortgage when it’s secured, but by doing the maths beforehand you’ll know whether you’re getting the best for a deal.

Choose the right one

Of course, some finance brokers offer a better, more comprehensive service than others, so make contact with a broker who has years of experience and a reputation for excellent customer service to get the most out of your deal.