FAQ's

FAQ’s 2018-06-07T13:03:41+00:00

Where do you invest?

We invest in Leeds, the 4th largest UK city, which provides a wealth of untapped residential investment opportunities. We focus on specific postcodes within Leeds which offer investors a sustainable investment and outstanding return.

Why Leeds?

The 4th Largest city in the UK, Leeds provides a wealth of untapped opportunities for investors looking for sustainable investments and outstanding returns. The entry prices are low and the returns are high if you know what you are doing. At Lifestyle Property People, we not only open doors to this buoyant market, but help to instigate wealth to provide a superior quality of life for our investors and their families.

What if the interest rate rise? 2017-11-27T16:14:59+00:00

Increases in Interest rate are external factors outside our control, but certainly, we would expect that they will rise at some point. Our deal analysis is computed at 4% mortgage interest rate, which leaves some contingency for these scenarios. We also stress test all our property deals at 8% to ensure that even if the mortgage interest rates do increase suddenly, the investor does not make a loss. This seems very cautious, with the majority of our investors achieving a mortgage interest rate of 2.5%-3.0%, but after stress testing at 8%, we feel confident that we are offering only the highest cash flowing deals, with the lowest risks.

Do you buy HMO’s for clients 2017-11-27T16:14:52+00:00

We don’t procure HMO’s. This is because there is a lot of risk associated with getting the necessary Planning approvals for HMOs. Leeds has a large Article 4 area, which means that investors cannot turn residential houses into HMO’s without getting planning consent. This is a lengthy process with no certainty that planning will be granted. There are some people who are happy with the risk, but the majority of our clients are looking for stable, long term, fully managed investments that have great returns and we achieve these with single let properties in Leeds.

Are the properties Leasehold or Freehold 2017-11-27T16:15:30+00:00

All the properties we offer are Freehold. As someone once said: “Invest in land. They’re not making it anymore.”

What return of investment can I expect in Leeds? 2017-11-27T16:18:14+00:00

We aim for a minimum of 10% Return on Investment (Cash on cash return) and model all our investment opportunities at a 4% mortgage interest rate. We deduct the Lettings & Management charges and also estimated insurance costs to arrive at this number.

In terms of yield, we usually look for properties that have a minimum of 6% gross cost yield when taking into account all buying and refurbishing costs.

If they are such good deals, why aren’t you buying them?

We Do! The Lifestyle Property People Team are all financially independent as a result of their Leeds based portfolios which comprise the same types of the properties we offer to our clients.  You can be sure that we only offer our client’ properties that we would be willing to purchase ourselves.

What is the turnaround time for the types of property that you source?

Once a client has paid the initial £500 Commitment Fee, we get to work to find them a property opportunity that matches their criteria. Obviously, the less constraining the criteria, the easier it is to match the deal. Typically, since we view between 20 and 50 properties a week, we can source a deal for a client within 4 weeks.  The purchase process usually takes circa 8 weeks to Completion and assuming the property is in good let-able condition, our Lettings partner tends to find tenants within about 2 weeks. In total then, it takes on average 4 months from deciding to purchase a property to receiving passive rental income into your bank account.

What if I end up with bad tenants? 2017-11-28T12:26:52+00:00

The bug bear of most landlords and investors is tenants and whilst they do present an element of risk, our lettings team carefully checks and references tenants before they move in. Once let, they manage the tenancy proactively to minimise voids, bad debts and late payments. In the unlikely scenario that the tenants do not leave the property in the same state they found it, the Letting Agent usually can recover some monies from the deposit taken at the start of the tenancy.

Is it possible to buy in cash? 2017-11-28T12:26:45+00:00

Yes, this is not a problem and often has many advantages namely a quicker and smoother transaction. That being said, we are keen to help you grow your portfolio and an excellent way to do that is to leverage your cash to some degree to enable you to purchase multiple properties.

Do you buy from auctions? 2017-11-28T12:26:39+00:00

Yes, we do, but we have built really great relationships with Estate Agents and currently find a lot of deals through them, sometimes before they are advertised on the market.

Where does the rental income get paid? 2017-11-28T12:26:31+00:00

It gets paid straight into your nominated bank account after the Letting Agent takes off their fee.

What if I have not investment experience?

This is not a problem and everyone has to start somewhere. We are a team of highly experienced property professionals and are here to help you make the right decisions on your investment. Many of our clients have little or no property experience and they just want a fully managed solution that gives them a great return. That is what we offer

Who do you rent to?

Our main model involves working with Housing Benefit tenants who have a direct payment guarantee with the council. While some investors would avoid these tenants, we have a tried and tested system to minimize the risks, while maximizing the returns. Specifically, we only rent to a small subsection of the tenant pool, namely good people who have fallen on hard times. We use a specialist Letting Agent that has been in the business for over 20 years and carry out visits to tenants’ current address to confirm the state. Once the correct due diligence is applied, a tenant in receipt of housing benefit can often yield a better overall return than a private working tenant.

What happens if the refurbishment goes over budget 2017-11-28T12:53:17+00:00

Our specialist refurbishment team have completed a significant number of refurbishments for us and have an excellent track record of completing on time. This is due to both their experience and the fact that we have a standardised specification for all our properties. If works ever started to overrun the budget, we would consult the customer immediately and devise a solution to achieve the best possible outcome for our client.

What is the lead time for refurbishments 2017-11-28T12:53:09+00:00

Refurbishments come in all shapes and complexities and depend on the extent of works. A typical full house refurb may take between 4 to 6 weeks. We will inform you about the timescale for the refurbishment before you agree to purchase the property and will do everything possible to meet these deadlines.

Also, as a long term investment, we do not take account of these short term, one off void periods in our calculations, so please be aware that this may reduce your overall return marginally.

What if I have not investment experience? 2017-11-28T12:53:03+00:00

This is not a problem and everyone has to start somewhere. We are a team of highly experienced property professionals and are here to help you make the right decisions on your investment. Many of our clients have little or no property experience and they just want a fully managed solution that gives them a great return. That is what we offer

Do I need to view the property in person? 2017-11-28T12:52:56+00:00

The majority of investors understand that this is an investment purchase and so as long as the numbers stack up, there is no real need to visit the property. Saying that, the choice is completely yours and should you wish to view a property, it can be arranged to fit your schedule.

Do I pay monies for the purchase and refurbishment? 2017-11-28T12:52:51+00:00

No, the purchase, legal fees and mortgage fees, etc. are ALL paid directly from you. This way you are in control and have possession of your own money. We are always upfront and transparent with you about all costs.

Will I have to find my own builders for refurbishment 2017-11-28T12:52:43+00:00

No! We have an experienced build team for all our refurbishment projects who we have been working with for over 3 years. We provide the Project Management of this team for a flat 10% charge and guarantee a high level of finish each time to ensure the property remains a hands free investment. After the refurbishment works have been completed, we also ensure that all the small snaggings have been carried out and nothing has been left out. The property is only let when it is confirmed to be in a state that is ready for tenants to move into.

Surely I can source properties myself?

It is true that anyone can go online and find a buy-to-let investment property, however most of these barely meet the monthly mortgage payments and are not exceptionally good investments. We are specialists in sourcing properties which bring in an excellent, stable and passive income of between £250 – £1,000 per month. Since we already know the market and the players, we can usually find far better deals than the ordinary investor, stress testing them to ensure they work, increasing returns and decreasing hassle dramatically for our clients.

Ok, I am happy to proceed. How can I arrange a meeting with your team?

Feel free to contact us on 0203 633 4280 or click here to access our appointment calendar and our team will contact you whenever is convenient for you.

What about Brexit? 2017-11-28T13:17:45+00:00

First thing to note is that immigration is unlikely to drop substantially. The Govt will try a controlled exit and will therefore renegotiate deal with Europe over a 2-3-year time period. One of the main negotiations will be around a Free trading block, which requires the free movement of labour, i.e. immigration.

Rental returns remain unaffected or increase

1. Better deals are available now:

  • Uncertainty in the markets, decreases the number of Investors and therefore demand for investor properties
  • Uncertainty in the markets provides a good opportunity to negotiate with distressed sellers, especially if their previous buyer has fallen through
  • Uncertainty in the market means more people will put off buying a house and will chose to rent instead, increasing rental demand
  • Interest rate rises have been pushed back, increasing net returns in the short term by reducing mortgage interest payments

2. Rents will remain constant:

  • We rent to Housing Benefit claimants through a system of Direct payment from the council to the Letting Agent. The Local Housing Allowance rates have increased steadily and are fixed for the next 5 years.

3. Rental demand will also remain constant:

  • Our properties are newly refurbished and well maintained, and are therefore the first to be let

 

Capital Growth over the Long term will continue:

House prices are driven by Demand for and Supply of housing

1. Demand for housing is a function of population growth and wage growth:

  • The population is increasing regardless of immigration and there are more single parent families and smaller family units
  • Wages will also be increasing since interest rate rises are pushed back, consumption and investment will naturally increase

2. Supply has been low for years as a result of the recession and has not kept up with Demand. This shortage has led to increasing house prices. Any significant increase in housing shock is only in and around London to cool prices, but even there, Demand continues to outstrip supply.

It is important to remember that the UK economy is one of the most economically and politically stable economies in the world and will continue to be over the long term. Therefore, the impact on long term house prices is likely to be negligible.

I am self-employed; will that be a problem? 2017-11-02T13:30:53+00:00

Not necessarily. We will put you in touch with our trusted mortgage partner who work with lenders that will lend to you despite not having a proven income. Do get in touch to understand the options available to you before proceeding with a purchase.

Surely I can source properties myself? 2017-11-02T13:27:13+00:00

It is true that anyone can go online and find a buy-to-let investment property, however most of these barely meet the monthly mortgage payments and are not exceptionally good investments. We are specialists in sourcing properties which bring in an excellent, stable and passive income of between £250 – £1,000 per month. Since we already know the market and the players, we can usually find far better deals than the ordinary investor, stress testing them to ensure they work, increasing returns and decreasing hassle dramatically for our clients.

Ok, I am happy to proceed. How can I arrange a meeting with your team 2017-11-28T13:05:36+00:00

Feel free to contact us on 0203 633 4280 or click here to access our appointment calendar and our team will contact you whenever is convenient for you.

What are the rental rates in Leeds?

Typical rates are £400-£550, however, our strategy focus’ on housing benefit tenants, where the rates have been fixed for a 5-year period. The rates are dependent on the tenant’s eligibility, not the size of the property and the rates are as below:

  • 1 bedroom:433.55
  • 2 bedrooms: £530.23
  • 3 bedrooms: £656.50
  • 4 bedrooms: £866.41

It is worth noting that because of the benefit caps that the Government have applied across the country, many families struggle with achieving the full eligibility for a 4 bedroom rate.

If they are such good deals, why aren’t you buying them?

We Do! The Lifestyle Property People Team are all financially independent as a result of their Leeds based portfolios which comprise the same types of the properties we offer to our clients.  You can be sure that we only offer our client’ properties that we would be willing to purchase ourselves.

What if you can’t rent my property? 2017-11-28T13:25:50+00:00

This is a valid concern expressed by many Buy To Let investors however we only source properties which are popular rental sizes, in areas which have high rental demand. Having local market knowledge helps us to identifies which properties and areas will attract the best tenants. Being investors ourselves, we would only recommend properties in areas that we buy in ourselves and have confidence that our Lettings partner can rent your property.

What are the letting fees? 2017-11-28T13:25:37+00:00

10% of the gross rent collected plus an initial £100 for finding tenants

Who will own the investment property? 2017-11-28T13:25:31+00:00

All the opportunities we offer are purchased in the names that you state, be it individual, joint, company or other names. We have no claim or equity state in the property in any way and as such, you are free to do as you wish with the property. We do pride ourselves on providing an end to end service though and so have all the partner companies lined up should you wish to use them.

What is the minimum amount required to invest in Leeds? 2017-11-28T13:25:25+00:00

An average 3-bedroom property currently costs £90,000. This requires a cash investment of approx. £35,000. This includes the 25% deposit, any necessary fees, e.g. legal, mortgage etc. and our sourcing fee.

If you have owned your own home for a few years, you may well have already built up some equity in your property. Therefore, instead of finding a cash deposit, your mortgage lender (subject to approvals) will allow you to use some of this equity built up in your home as security on your investment property. Our independent mortgage advisor is on hand to offer the best strategy for you and your investment goals.

What am I exactly paying for? 2017-11-28T13:25:12+00:00

We have great relationships with local Agents and can negotiate the best Purchase prices and purchase terms for you.

We also offer a personalised end-to-end fulfilment service which includes:

  1. Understanding your requirements;
  2. Property Sourcing;
  3. Purchase Management;
  4. Refurbishment including Project Management; and
  5. Lettings Solutions

For your ultimate peace of mind we deliver all of our deals after taking off our fees so your returns are not compromised.

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