Frequently asked questions
Tenant buyers
What do I need to qualify for a rent to own a home?
The most common requirement is a 10% deposit to put down on a new property purchase, but we can work with a minimum 3% of the deposit. However, you have to be employed or self-employed and you are potentially in a position to get a mortgage in five or more years time.
Will a property´s price change during a certain period of time?
The sale price is locked in during the whole period of the renting agreement which may last several months to several years. This means that as the property appreciates the price is fixed and therefore upon exercising the option there will be considerable equity in the property.
What will happen to my option payments?
We keep your option payment and designated amount of money from each rent payment in your special client account. When it comes to buying the property, we release these savings towards the price of the property at the end of the rental term.
Who is responsible for covering the costs and the control of a house?
From the day you move into your new property you have legal responsibility for the property as you are the acting owner. You are responsible for all costs of the property, so unlike a usual rental agreement, any repairs, breakdowns or insurance costs must be covered and paid for by you.
Landlords
Do I need to renovate my house before putting it up for sale?
It is not obligatory. However, if you decide to renovate your house it will immediately increase the value of the property. In case the renovation costs are higher than your budget we can look to jointly and invest in your property too to help with your sale.
Do I pay any additional costs towards marketing advertisements?
No, all these costs are covered by our company.
Who manages the property issues?
We handle issues like searching tenants, voids, maintenance, organise viewings, communications and all the relevant paperwork.
Who is responsible to pay council tax, damages and utility bills?
The tenant buyer or tenant is responsible for the council tax and utility bills. It will be clearly stated in the tenancy agreement. Either the tenant pays to fix the damage, or the cost to repair the damage is removed from the tenant’s security deposit at the end of the tenancy. The tenant buyer has to cover all costs of damages caused by themselves during the whole contract period.
Tenants
What do we require from you before you rent a property?
You will be asked to provide:
ID or passport for proof of identity,
confirmation of recent employment,
2 previous month bank statements,
previous landlord reference.
Do you need to pay a deposit?
Yes, the security deposit is equal to one month´s rent and it is held by the landlord.
Who is responsible for repairs, accidental damages and maintenance?
The property will be checked before you move in. You are responsible to pay utility bills and council tax unless otherwise stated. The landlord is responsible for repairs and maintenance. However, any damages to the property caused by you, will be considered your own responsibility to repair.
When can my landlord enter the property?
Landlord needs to give the tenant appropriate 24 hours notice before entering the property, unless it is an emergency. The tenant should be present.
Investors
How much money do I need to invest in property?
This depends on what type of property investment you are considering. You can invest in property via funds for a few thousand pounds through to £300,000 or more for a property investment franchise. This can be tailored to your financial needs and aspirations.
What returns can I get by investing in property?
Property investment returns can be very profitable allowing a recurring passive income, however this can vary depending on the type of property investment and typically the length of time that you invest in property.
For example you can invest in Buy to Let with around £20-£30k and receive a gross annual return on your investment of 4-7% and average capital growth over a ten year period of around 5%. However, if you are buying land and building from scratch, dependent on market conditions you may be able to potentially gain a 100% return on your investment within 18 months, however this kind of return requires expert knowledge and support advice in the sector.
What is the fastest way of getting a return on property investment?
The quickest way of making money from property is actually one of the hardest strategies. Through buying a property at a discounted rate, then revaluing to sell at a profit, after adding some additional value to the property usually. Although this seems like a straight forward approach, this tactical method requires professional experience in a static/falling market. Other accelerated ways of a return investment on property quickly are from self building or property development which can be turned around in less than 12 months.
What are the benefits of property investment?
The main benefit that investors see is the opportunity to 'gear' the investment through borrowing money, so if you have £50,000 to invest and gain a 10% return, you'll receive £5,000 gross profit. If you invest £50,000 in a property worth £200,000 and it grows by 10%, you'll get £20,000 back. However this only works when property prices are rising, you buy at a substantial discount and/or you wait until the property has increased in value.
What are the pros of investing in property?
The pros of investing in property is that your choice of what you invest in are typically yours. You can also "touch and feel" your investment, giving you the feeling of more 'control'. If done well, property investment can deliver some great recurring returns of income. However property investment isn't easy and increasingly requires professional assistance from people or companies with the knowledge and experience to successfully invest correctly, avoiding costly mistakes.
What are the cons of investing in property?
The downsides of property investment is having to 'top up' your investments with cash if they don't perform and that you are to some extent at the mercy of macro and micro economic conditions. Finally property investment is complex and not every property, fund, syndicate will deliver. The research required can take weeks and months and the amount of money now required in the UK to invest is in excess of £30k for just one property. Property investment from 2008 really requires professional expertise, rather than just anyone investing in any property or area.
How much does a buy to let cost?
You would normally need a 25% deposit on the property's value, around £2-3k to make sure the property is legal and fit to let and an on-going investment of £500-£1,000 per year to maintain the property/let. You also need to consider your buying/selling costs, which range from 2-3% to 8-9%.
What return will I get from buy to let?
Buy to let gives two types of return typically over a 10-15 year period. Income from rent which can be 4-12% of your investment and growth from capital which is purely an estimate from historic price information of around 5% per annum OVER A TEN+ YEAR PERIOD.
