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Cross-channel moves

February 8, 2012 By

If you’ve decided to buy yourself a holiday home in France – either as a place to escape to or as an investment – then you’ll probably need to move some of your belongings there at some point. Of course, it’s a bit more complicated than moving within the same country, but it needn’t be too difficult to organise.

There are many people making a move either to or from France at any one time. And a lot of removals companies give you the option of booking in a flexible one way move date. For example, if they have someone moving back to the UK, they can time the Channel crossing so they take one lot of furniture to the UK for one family and use the return trip to move another family’s stuff out to France. If the date doesn’t tie in with your exact travel plans, the removals company can store your belongings for a day or two before meeting you at your new property and you can help them to unload.

If you don’t have much to take with you, you can even opt for a part-load – where you work out how much of the van space you will need and pay accordingly. The more flexible you can be on dates, the better a price you will get.

As your rate will depend on how much stuff you want to move, you may decide that it’s better to replace some furniture rather than take it all from one country to another. For example, sofas can take up a lot of space and with so many sofa sales on you may find it’s cheaper to buy a new one in France. Of course, another reason for buying new is that you might not have enough furniture to furnish two homes from your existing possessions.

It’s possible to buy cheap furniture in most of the mainstream shops in France these days and you can also get things delivered or a many shops have vans you can hire to take the goods home in yourself.

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Making a rental home your own

January 23, 2012 By

If you’re in a rental house or flat and the place is looking a bit tired, it may be worth sussing the landlord out on whether they’ll let you make it a bit more like your own place. The trick is to go around this so that the landlord gets some benefit, too.

For most landlords, decorating is not a task they relish – and they either have to set money aside for it or roll their sleeves up. There’s little joy in the work if it’s for someone else’s benefit, so if you offer to do this for them, most reasonable landlords would be pleased.  You can either offer to pay for the paint yourself or perhaps negotiate a bit off the rent for a month or two in return for your labour.

The easiest way to get a landlord to agree to this, is if you ask them what colour schemes are acceptable. Neutrals are a safe bet – for you to live with, and for the landlord to have left when you move on.

The other way you can make a rental feel like your own is to have your own furniture in there. If the place is already furnished, you could either add a few pieces of your own furniture to the mix, or ask permission to store the landlord’s furniture in the garage while you’re living there.

There’s a great deal of cheap furniture available online. It’s easy to find something that suits your taste – and you’ll probably want to keep it for the next place you live in. Sometimes it can be a practical purchase – like putting in a sofa bed to a one bedroom flat so that you can have overnight guests now and then. Check out any sofa bed sale and you’re sure to find one at a bargain price.  Sofa beds sometimes concern landlords, as they think you might try to sublet the living room, so be prepared to explain why you’ve bought it if questioned.

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Your home is not capital

December 6, 2011 By

You’ll often hear people talking about having a lot of their capital tied up in their home.

Now you know what they mean, but the terminology is incorrect. Let me explain; your home is not capital in the economic sense of the word.

In economics, capital refers to existing and durable goods that are used in the production of other goods and/or services; a hammer, for instance, used by a carpenter is capital.

Capital goods in themselves aren’t “consumed” – but they can wear out and depreciate in the production process. So a greengrocer buying apples isn’t investing in capital, but his/her new fruit stand is a capital investment.

When extrapolated for housing, the situation is clear. Your own home is not your capital, but a home bought specifically to rent out (presumably at a profit) is capital – as is any investment you make in the structure.

Going to the sofas sale, for example, isn’t a capital investment for your own home, but is if you’re buying the furniture for a fully-furnished flat you’re renting out.

Now all this may seem obvious and unimportant, but it’s very important for your own finances to understand the difference. Anyone under the age of around 35 could be forgiven for thinking that a house was an investment in capital – up until 2007 anyway. That’s because houses were seen as investments because they generally rose in value. But that still doesn’t make them capital.

A house you rent rooms out in is partially capital, a hotel or guest house is an investment in capital, but your own house isn’t. And as we buy and sell in the same market, it’s best to ignore the value of the house you’ve bought to live in, and to simply enjoy it – unless you plan to turn it into capital by letting it out of course. And in that case it’s the return on the investment you should focus on; namely, the rent rather than the house’s vale (though the latter may be important in borrowing more to invest in further capital). 

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How does your flat beat the others?

December 5, 2011 By

The property boom that lasted roughly a decade from 1997-2007 saw thousands of purpose-built apartment blocks thrown up all around the western world. Some areas have since become synonymous with wasted pointless building resulting from the property boom’s giddy zenith. In parts of Ireland and Florida, whole new developments stand idle, whilst in the UK city centres like Manchester and Leeds, for example, have a huge surfeit of trendy city centre apartments where supply exceeds demand.

If you’re one of the unlucky landlords who find themselves trapped with such an apartment sitting in negative equity with a competitive rental market to make matters worse – then fear not; help is at hand!

First off, work out how much income you’re actually going to need to make it through the financial mess with your rental property. If the rental income matches up to this figure, then at least it’s realistic. If not, you may have to sell at any price.

On the presumption that you can hold your head above water if the apartment rents out for a reasonable income, then here’s what to do: Put yourself in the position of the renter. There are sometimes hundreds of similar apartments for renters to choose from. So you have to make sure yours stands out from the crowd in terms of:

  1. Quality, and,
  2. Price

That’s basically it. The only other real variable is communication; how the renters get to learn about the availability of your apartment in the first place.

So try and avoid going through a property agency (unless the agency can derive an income of around 12% or more than you can get directly with tenants). This will help you be as competitive as possible on price (for which you may have to do a little hands-on research; posing as a potential tenant may even be necessary).

Then it’s down to quality. So decorate and clean the place from top to bottom and if it’s going as fully furnished, make yours better than the rest. The sofas sale ads seem to run round the clock these days – so buy a decent one.

And get down to the nearest furniture sale and decide what a prospective tenant is really after – cleanliness and comfort.

It’s not rocket science – you just have to beat the rest on quality and price.

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Renting out a property

November 22, 2011 By

Many couples find that they have one property too many when they get start living together. While you can both sell up and buy a bigger place, it can also be a very sensible financial decision to keep one for your joint home and let the other one out.

How you go about managing the tenants can depend on what time you have available. If you live nearby you could decide to save the agency fee and deal with your tenants directly.

Handing the management over to an agency can be a lot less hassle, if you’re prepared to pay the fees. But by managing the property yourself, you will save an average of 12-15 per cent on agency fees.

You also have the chance to visit the property more regularly and keep a closer eye on it, although of course you must make sure you don’t overstep your boundaries and start bothering your tenants, otherwise they won’t want to stay long and you’ll have to start the whole process again.

Take a leaf out of the professional property developers’ books.  In an interview with David Lichtenstein – a US real estate professional whose company Lightstone has a plethora of different rental properties – he states that Lightstone’s asset management team takes a hands-on approach in all aspects of asset management. This includes overseeing the day-to-day property management and leasing functions.

Now, in a company the size of Lightstone, it’s definitely not Mr Lichtenstein or any of his executive team who are going out to revamp the apartment buildings between lets, of course. But, in your case, why pay a decorator to go in and freshen up your rental property when all it takes is a weekend of your time to go through the place with a tub of Magnolia white paint and a few bottles of Cif to get it shiny clean for the new tenant?  Pay the decorator and you’ll lose out on at least a month’s rent.

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House not selling – what about renting?

September 14, 2011 By

It used to be an easy thing to plan. Decide to move, look for a house, put yours on the market, wait a bit, sell it and then move into your new house. Nowadays many houses are sticking on the market and owners currently in negative equity with their house value cannot afford to sell at a reduced price. More and more are taking the option of renting out their house until the market improves. My friend rented out her mother’s house for four years before it sold, but she took advantage of the rent money to upgrade the house over that time so that she got a much higher prices when it eventually sold. Sometimes the rent is essential to pay off the mortgage still owing, but often there may well be some surplus to help with expenses in the new home. It’s always sensible to put some away for preparing the property for sale at a future time. If the mortgage is already paid off, then renting out the property might be the very best return you can get on the money already invested in it. If savings rates are very low then this is most likely to be the case. If a homeowner is considering renting his or her property then professional advice is needed. Agencies can take over and run your rental for you at a cost, or they can be their own landlord – but options need to be carefully evaluated.

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The downsides of renting your house out

August 23, 2011 By

There are some problems in being a landlord that do need considering before you go ahead. A number of problems have happened with people I know who have rented out houses. The worst problem was the family who hired a van and cleared out everything from the house. (Check possible tenants carefully is the answer.) Then there were the tenants who agreed to rent for 6 months and then left after two months when their relationship broke up, so leading to a further arrangement fee from the management company. A further problem is the tenant who is always on the phone with a complaint. There are other things to think about.

Some people will find it very stressful to have strangers in their house, and become anxious about their furnishings and equipment being looked after. If this is so it would be better to remove all items that are breakable, have a high replacement value or sentimental value. Potential renters can handle all the issues themselves, that is, personally be a landlord, or they can have a company to manage the rental for them, find tenants. The latter option obviously costs but takes a lot of stress and problems which will be important to some. Potential renters should take advice from experienced agencies in the field before taking a decision.

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