Q1. What if there is a housing market crash?
As long as you’re not looking to sell immediately, it makes little difference. Your tenants continue to pay the rent and you wait until the market recovers before you sell or raise equity from your property.
Q2. What happens if the local authority chooses not to renew the lease on my property?
This is an unlikely scenario. However, in the event that this does happen, we would help you find another tenant. By choosing the properties and locations carefully in the first place, we also give you the very best chance of acquiring a new tenant quickly. We always choose a good, clean property (if it is a flat, it will be on the ground, first or second floor only) in a family-friendly community, near transport, local amenities, schools, hospitals, universities and shops. This is exactly the kind of accommodation tenants are always looking for.
Q3. Will the tenants damage my property?
It is unlikely that the tenants will damage a property. However, if it does happen, the housing association is required to fix the damage under the terms of the lease if the damage is not fair wear and tear.
Q4. How long should I keep my property?
Ideally at least a decade, if not longer, dependant on your age and circumstances.
Q5. What happens if I need to sell sooner?
You are free to sell at any time. You can give the housing association notice or sell it with a tenant in place. You should be able to sell your property easily as demand in London remains high and these are good properties in good areas.
Q6. Can I invest if I am outside the UK?
Yes, you can. In fact, we already work with a number of overseas investors. The principles of the process remain the same, with just two significant differences. Firstly, we offer a property management service to our overseas clients; and secondly, lenders will ask our overseas clients to put down a bigger deposit on their investment property. As with all our clients, we are careful to assess the suitability of overseas investors to ensure we can work successfully together for the long term.
Q7. Do all property sales go through smoothly?
Around 93% of property sales go through. However, we are not immune from vendors changing their minds and occasionally sales do fall through. If that occurs, we will identify another property immediately.
Q8. Will I make a profit on the rent each month?
We encourage investment with a long-term vision. The fact is, however, you are likely to have a surplus on the rent each month (although this does depend on prevailing economic conditions, interest rates and the mortgage market). Some clients save the surplus, others use it towards any repairs or maintenance that needs doing on the property, while others take the opportunity to overpay on their own mortgage in order to reduce the term.
Q9. What if interest rates go up?
Take sound advice from our mortgage brokers whenever you change your mortgage. It may be wise to fix your rate if a rise is predicted.
Q10. How often is the rent reviewed?
Normally the rent will rise at the end of each lease period, which should enable you to maintain or increase the monthly profit you make on it.
Q11. What happens if something needs doing to the property?
The tenant or housing authority will contact you and you can either take on the job yourself or ask a tradesman to deal with it. You are welcome to use your own contacts or any of our trusted colleagues.
Q12. What if I’m concerned or need advice?
Our clients stay with us long term and we are always here for them. We get to know them personally and are happy to provide advice or guidance whenever it is needed.
Q13. Is this right for me?
Only you can answer that. All we can tell you is that we have clients all over the country and abroad, and from all walks of life. What they have in common is that they are looking for a medium to long-term investment that will pay dividends in 10-20 years to help them with an income for retirement, school fees, lifestyle changes and so on. We spend a lot of time with our clients before they invest and if either of us has any doubts, the investment will not be made. Not all prospective clients are invited to work with Northstar.
Q14. What is the position regarding income and tax?
There are proven ways to invest tax-efficiently and we would strongly advise you to take your own tax planning advice before proceeding. We can refer you to a tax planning specialist if you wish.
Q15. Why shouldn’t I just buy to let on my own?
You can – many people do. However, the market is full of experienced investors who make their living by studying the market and spotting the right investment so you have to do a lot of groundwork first to ensure you don’t choose badly.
You will also have to negotiate the purchase, arrange the mortgage and find the tenants yourself. You will also have to bear the considerable cost of replacing tenants and coping with any months where you have no tenant.
Before letting out your property you will need to make sure that you refurbish it to a suitable standard that will meet with health and safety and property letting legislation.
Bear in mind that the Council of Mortgage Lenders says that the average tenant stays for an average of just 1.6 years.
With Northstar, you get over 100 years’ experience between us and you also get an established firm, not a get-rich-quick charlatan. We buy the right property in the right area, assist you on the mortgage and obtain a guaranteed minimum three-year lease, with a strong likelihood of renewal.
Q16. How do you make money from this?
We take a service fee for providing the services described on these pages. You only pay us on successful completion of the sale.
Q17. Why don’t you just buy all the properties yourself rather than involving clients?
Because we would need over £100 million per year to service all our local authority partners’ property requirements. We work with clients like you because you help provide the capital we need - and in return we provide you with a great investment opportunity. This business started off to service the investment needs of family and friends and steadily grew from there. The principles on which it was founded – i.e. to help investors make their money work for them effectively and safely – remain the same.
Q18. Will you be around in ten years’ time?
Managing Director, Agi Eugenio, says: ‘And the rest! I love this business and hope to be here for a good 20 years or more.’
Q19. Am I guaranteed success?
There are no guarantees. All we can point to is over 500 happy clients and nearly 700 properties bought. Most of our clients say they want to keep investing in more properties. The process has been developed and refined to be as watertight as it can be. We believe there is no better way to buy-to-let.
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