In spite of the global economic uncertainty, real estate still remains one of the most favoured asset class for global investors. In almost all markets, property prices, rents and returns continue to rise steadily.

The last few years we have seen a new growth in various global markets, which brings with it that all important question, where should I invest?

Before this question can be answered, you first need to decipher what it is you want to achieve from your investment.

First things first get to know your markets. Generally, to see a good return on any property investment, whether in rental or resale, you need to ensure the demand will be there. You also need to ensure you understand how the market works, every market is different and is dictated by different laws and legislations. Generally, in the UK the regulations in place are fairly bias and favour both landlords and tenants, however, in other European markets they tend to highly favour the tenant over the landlord, which could result in being stuck with a tenant in situ for some time.

Generally, for a higher rental return you should be looking in area’s that benefit from high student intake, international tenants and young working professionals.

Now for the hotspots…

UK Cities:

Leeds:

Leeds is located in West Yorkshire and is one of the most diverse economies of all the UK’s main employment centres. The city is home to over 109,000 business and access to a workforce of 1.4 million individuals. Due to the increase investment in Leeds through the Northern Powerhouse initiative, both house prices and rental prices are expected to rise respectively by 3.3% and 3.2% over the next five years. Making it an ideal location for your next property investment.

Liverpool:

Liverpool is also one the ‘core cities’ within the Northern Powerhouse initiative, and due to this the city has received an investment injection since the initiative was announced in 2014. With major regeneration projects currently being undertaken across the city, such as the Liverpool Waters scheme, the latest figures are predicting house price growth of 12% over the next four years.

European Cities:

Lisbon, Portugal

During 2018, the Portuguese economy experienced its fastest growth since 2000 and the country has also had the steepest decline in unemployment across the EU over the past 5 years. Due to this Lisbon has experienced astonishing growth rate in both capital and rental values – with capital appreciation forecast growth of 19.2% and an estimated 27.3% rental price growth over the next 5 years.

Düsseldorf, Germany

Düsseldorf is situated in the heart of Europe and is an important economic centre. An under-supplied housing market, evidenced by a vacancy rate of 1.4%, has led to upward pressure on both rental and capital growth rates over the past decade. Rents have risen 40% since 2009, whilst prices for new apartments have increased 100% over the same period,

 

The Complete Zeitgeist 2019

The zeitgeist compiled by leading global residential asset investment specialists Complete Prime Residential is a creative, insightful and thought-provoking collection of concepts in residential real estate investment and management of your properties. Providing an A-Z of all things real estate in the spirit of now get your own copy of The Complete Zeitgeist 2019.

 

The Non-Resident Landlord Scheme (NRLS) is a scheme for taxing the UK rental income of persons whose “usual place of abode” is outside of the UK.

The Non-Resident Landlord Scheme (NRLS) is the mechanism by which HM Revenue & Customs (HMRC) collects the tax due on the UK rental income of non-resident landlords. Non-resident landlords are individuals, companies or trustees who receive rental income from property owned in the UK and whose “usual place of abode” is outside the UK.

The scheme requires UK letting agents (or tenants if the weekly rent exceeds £100 and no letting agent is appointed) to deduct basic rate tax (currently 20%) on any rental income they collect on behalf of non-resident landlords and pay this tax over to HMRC on a quarterly basis.

Non-resident landlords can offset any tax deducted under the NRLS against their tax liability when they complete and file their UK Tax Return.

However, it is not necessary for letting agents or tenants to deduct tax from rental income of a non-resident landlord if HMRC informs them by letter that the landlord is approved to receive the rental income gross.

More information about the Non-Resident Landlord Scheme can be found here

The Complete Zeitgeist 2019

The zeitgeist compiled by leading global residential asset investment specialists Complete Prime Residential is a creative, insightful and thought-provoking collection of concepts in residential real estate investment and management of your properties. Providing an A-Z of all things real estate in the spirit of now get your own copy of The Complete Zeitgeist 2019.

Licensing and legislation are two very important aspects of the letting process which all landlords need to be aware of and to also understand.

First things first, what is selective licensing? Selective licensing are council-led schemes with the aim to ensure landlords are fit and proper persons, as well as setting out stipulations over the management of the property and that they adhere to appropriate safety standards. These schemes have been introduced all over the UK in areas such as Salford, Liverpool and various London boroughs including Croydon, Redbridge and Newham.

Landlords must find out whether their investment property is located in area which is covered by a scheme. In the first instance, it is worthwhile checking with the local council to see if this applicable to them. Landlords in London can use the London Property Licencing website: https://www.londonpropertylicensing.co.uk/

What must landlords do?

If you find out that your investment property is in a selective licensing area, your council will have an application form to apply for a licence, which will need to be completed. The fees for a licence for tend to be around £400 to £600 for an ordinary flat or house occupied by one family. Licence fees vary across different local authorities. The council may want to see copies of safety certificates and to know the location of smoke and carbon monoxide detectors, as well as details of your tenants and tenancy agreements. A licence lasts five years.

Legislation

Legislation can be defined as a law or set of laws passed in Parliament and the process of giving or getting official permission to do something. Due to the nature of the property market and more specifically the lettings market, legislation regarding this sector is ever-evolving. Over the past 12 months 18 months various pieces of new and updated legislation has come into force, which all landlords should be familiar with.

Changes to Houses in Multiple Occupation Rules

Some crucial changes to the mandatory HMO guidelines have been implemented, which has seen the introduction of minimum sizes for bedrooms, and the 3 or more-storey rule has been abolished – so all properties will be required to obtain an HMO licence if the property is occupied by five or more individuals* and makes up more than one household.

*Due to different rules set out by local authorities your property may require a HMO license if the property is occupied by 3 or more individuals

Homes (fitness for Human Habitation) Act 2018

The Homes (Fitness for Human Habitation) Act 2018 makes it clear that landlords must ensure that their property, including any common parts of the building, is fit for human habitation at the start of the tenancy and throughout.

Furniture and furnishing regulations

If you are furnishing your rented property, you must ensure that all furnishings comply with these regulations and display standard labels in a prominent position. This is to reduce the risk of fire within the property.

Electrical regulations

You are required to ensure that any electrical devices within the property are safe for use. We recommend an Installation Survey or Portable Appliance Testing (PAT) so you can be sure you are compliant.

Legionella

As a landlord you have a duty of care to your tenants to make sure your water supply is working properly to protect them from Legionella.

The Complete Zeitgeist 2019

 The zeitgeist compiled by leading global residential asset investment specialists Complete Prime Residential is a creative, insightful and thought-provoking collection of concepts in residential real estate investment and management of your properties. Providing an A-Z of all things real estate in the spirit of now get your own copy of The Complete Zeitgeist 2019.

Know-how can be defined as either as a skill, a talent, or the ability to do something. Entrusting the management of your property portfolio isn’t easy and choosing the right agent is a critical decision, particularly if you are based overseas.

Any agent you instruct should have the absolute know-how not just of lettings and property management but the full investment life-cycle to support you in effective, efficient management of properties within your portfolio and ensure maximum yields, from start to finish.

Here are some questions for you to consider when appointing an agent.

Understanding the market

Does the agent who you are considering instructing have a great understanding of the market locally? How well do they know the area, they type of tenant the area attracts and how the area will develop? Are they aware of any risks which may be associated with the local area?

Service level

Does the agent offer the service which you are interested in? Some agents will offer a let only or tenant find service, whilst others will include property management elements, and some will offer a comprehensive, end-to-end service from handover to resales.

Paperwork and compliance

Will the agent manage all of the paperwork, from referencing the tenant and complying with relevant legislation around drafting and the administration of the tenancy agreement? Will they take care of other compliance matters and certification?

Marketing and advertising

How will the agent market your property? Will they go beyond placing the property on their website or on the major property portals such as Rightmove and/or Zoopla, and be involved in the marketing of the development or multiple units? What else do they do to reach out to potential tenants – do you they actively use social media to promote their services and client’s properties?

Accounting

How will the agent manage accounting and payments? How often will they issue statements, and do they make this information available to you online? Do they assist with tax matters or offer the Non-Resident Landlord Scheme?

 The Complete Zeitgeist 2019

 The zeitgeist compiled by leading global residential asset investment specialists Complete Prime Residential is a creative, insightful and thought-provoking collection of concepts in residential real estate investment and management of your properties. Providing an A-Z of all things real estate in the spirit of now get your own copy of The Complete Zeitgeist 2019.

It is important to note that you are putting the lives of your tenants and their guests at risk from carbon monoxide poisoning or potential explosions if you fail to carry out annual gas safety checks.

Laws enforced under the Gas Safety Regulations in 1998 outline that properties with gas appliances, or even just a gas meter, must have a valid gas safety certificate in place. Certificates must be renewed on an annual basis and the landlord/managing agent is responsible for ensuring the check is completed. This inspection has to be conducted by a Gas Safe Registered engineer and they will ensure that all gas appliances and flues in the property are safe to be used and pose no risk to your tenants.  You can find a qualified engineer at the following website: https://www.gassaferegister.co.uk/find-an-engineer/

Non-compliance with this regulation carries heavy penalties which can range from a £6,000 fine to imprisonment. In the most serious cases can even carry a manslaughter charge, if death is caused by unsafe and unchecked appliances.

All tenants must be provided with a copy of the certificate upon move in and existing tenants must receive a copy within 28 days of the check. Landlords must keep a record of the certificate for at least 2 years from completion.

An amendment to the original law made in 2018 means a new check can be completed up to 2 months before the existing record expires and the new certificate will retain the existing expiry date. This is to overcome any potential difficulties with arranging access with tenants.

The Complete Zeitgeist 2019

 The zeitgeist compiled by leading global residential asset investment specialists Complete Prime Residential is a creative, insightful and thought-provoking collection of concepts in residential real estate investment and management of your properties. Providing an A-Z of all things real estate in the spirit of now get your own copy of The Complete Zeitgeist 2019.