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  • Property-a-holics

    What the portals won't tell you - Intangible aspects of property searches

    In my many blogs, I have always talked about how important it is to research intangible aspects of a property, and here is a reminder.

    Intangible aspects of property searchs that are not on the portals*.

    Mobile signal – You may well have a landline at your home, but increasingly, we rely on our mobiles for convenience. So check whether you are to expect patchy coverage: communications watchdog Ofcom has a handy page which links to postcode checkers for the major networks. As with any online tools, bear in mind that they should only serve as a guide – you’d need to try out the coverage when you view.

    Mobile internet – Tenants increasingly use their phones for browsing the web, checking the mobile internet signal could be important – particularly if they don’t have Wi-Fi broadband at home.

    Broadband coverage – Many tenants plan to use a laptop to work from home, using a digital device to stream or download data, or play online computer games, and they will want to know that your property is not in a so-called ‘not-spot’ – an area where there is currently no home broadband infrastructure. Again, there are online tools which will give you an idea of whether there’s likely to be a problem.

    Broadband speeds - Bear in mind that even if you are in a broadband-enabled area, speeds will differ between addresses in the same street. This can depend on your provider is, among other factors.

    Environmental issues – These will be highlighted when you get environmental and surveyor reports – but by that time you’ll be some way along the road to buying a property. Visit the Environment Agency’s interactive maps to get an idea of whether there are potential flooding or pollution problems in your area. For radon – an invisible but potentially harmful gas – check the Health Protection Agency’s reference site. If you are concerned about something you find, seek professional advice.

    * Smells - make sure your property is not downwind of a sewerage farm or factory that makes nasty niffs.

    * Noise - Like smells, only by visiting the property can you find out if there are any noise issues such as machinery, traffic etc. Noisy & anti-social neighbours can also be a huge issue so speak to people in the street and ask what it is like to live there. You can also check out RateMyRoad to see if the street has a community review.

    * Parking issues - If a tenant has to park half a mile away from the property because their are too many cars, then they might struggle to park when they come to the viewing, and this would be a turn off. Visit the road at different times of the day to find out what the parking situation is like. You can also use google street view to get a feel of the street and its proximity to amenities.

    * Crime statistics - Local police websites will have these. Again speak to neighbours and local shop keepers about the neighbourhood and what it is like to live there.

    * Adapted from this article.

    Can you think of other intangibles?

    [Image: house.png]House Critter has been busy in the archives and has found these related discussions:

    Broadband speed - could hinder house prices and rentability

    How to find outstanding schools in an area

    The tenant of the future

    Triple D, not just a bra size ... due diligence x 3.
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    If only the EPC certificate covered Mobile Signal and Broadband Speed !

    I could not live longer than a few months with crappy broadband and never use home landline so would be stuck without the mobile.
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    Tenants feel the same Adam!

    It's a good idea to "think like a tenant" when you are researching prospective property acquisitions.

    They are the ones who are going to live in that property, not the landlord.
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    Depending on the tenants you are looking for, Ofsted reports - which can vary dramatically from one inspection to another - so what appears a great school on the last inspection can, without word of mouth suddenly not be so good. Having said that rightmove allow access to the reports better than Zoopla but zoopla do show crime statistics better than right move.
    What gets me is how few listings on the portals show the council tax band which is one of the first question a tenant asks at a viewing. We come across properties that are (in my opinion) in a band that is too high and have never been challenged by the owner, which can add an extra £200 a year to the tenants costs.
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    All good points but Its ironic i kinda want all the opposite to the norm with my LHA model.
    The less ticks in the boxes for `normal` criteria the better.
    This is because the more negatives I find then the purchase price goes down and the cash flow goes up.

    If I see rubbish bags outside, the smell of dog poo, a scrap on the street and a cop car on the corner when viewing I smile to myself. Its a leverage I use in negotiation Each negative is a positive to me and maybe worth 25K -50K off the value compared with a similar sized property on a neighbouring pleasant ville estate. The LHA rate though is exactly the same.
    Why pay 140K for a 2 bed semi set in Utopia when you can pay 80K for a 2 bed flat in the pits and get more or less the same rent

    My tenants often feel at home in these problematic estates. They were born and bred in run down estates
    I believe if an investor can make that mental transition to invest here too then great rewards can be had.

    In fact its almost criminal the amount of money that can be made out of property in high crime areas :-)
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    Jonathan Clarke. http://www.buytoletmk.com

    Lateral thinking JC!

    But just wondering what will happen when you want to sell a property?

    Might you struggle?

    And what happens if the LHA rates change dramatically?

    I do appreciate "where there's muck there's money", but I personally would not feel comfortable with your strategy.

    I think it might be because I am too ingrained in the "asset value" mentality. I will have to give this some thoughts and reconsider ....
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    (15-02-2013 09:14 AM)vanessa warwick Wrote:  Lateral thinking JC!

    But just wondering what will happen when you want to sell a property?

    Might you struggle?

    And what happens if the LHA rates change dramatically?

    I do appreciate "where there's muck there's money", but I personally would not feel comfortable with your strategy.

    I think it might be because I am too ingrained in the "asset value" mentality. I will have to give this some thoughts and reconsider ....

    Hi V

    As a rule I never like to sell but may do one a year just to liquify profits of about 25K to take advantage of CGT relief.
    More than likely though they get passed on to the kids.

    If buy at 100K it will still have doubled in price (conservatively ) in 25 years. Someone will buy it if I knock 10% of the market price in the same way as I might buy it in 2013

    If low end didn`t appreciate as much as high end then the gap would get disproportionally wider over time and would by natural forces have to converge again

    £300 cash flow pcm over 25 years is 90K
    Buy 10 houses @ 75% LTV and thats £900.000 cash in 25 years which is about a third over and above the national average wage.
    So one could manage those and have an average waged full time job .
    Work for 25 years and get over twice the national income with combined incomes
    AND then retire with over a 1 million pound pension pot + 36K pa ongoing inflation proof income .

    LHA offers all that and more. The rates should align themselves to the market rate give or take various political interferences along the way for better sometimes for worse in other times. The government will always have to house its people.

    An investor doesnt have to deal with the rubbish and the smells.
    Someone will always be able to manage that for them if they are adverse to that part.
    So its just a mind set thing in my view
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    Jonathan Clarke. http://www.buytoletmk.com