Real Rate of Return

Do you really know your numbers? When investing in property it is easy to do quick calculations to find out whether the investment is viable or not but have you taken into consideration the full costs and income from the property. Some aspects may be overlooked and as a result the return on your property may not be what you imagined. Knowing exactly how much return you are getting on your portfolio will govern whether it is a success or not.

Many investors invest in property as it will give them a better return than if the money was sat in a bank. They calculate it by working out the yield based on the gross annual rent divided by the property value. For example a property worth £100,000 with a monthly rent of £600 the calculation would be as follows:

£600 x 12 = £7,200
£7,200 / £100,000 = 0.072 = 7.2%

Using this basic calculation the yield would be 7.2% and therefore more than the interest gained in a bank account. However this is just a rough calculation and there are other aspects which should be taken into account when investing. If you look at the real rate of return the result is different as the costs of maintenance and management are taken into account. Many people buy a property with a mortgage which means extra costs are incurred. If we source your property we charge a fee, 50% of the first month’s rent, and other letting agent fees may also be applicable. We also offer bespoke furniture packages at £900 for a one bedroom property and £1500 for a two bedroom property.

Purchase Price – £100,000
Deposit (25%) – £25,000
Mortgage (75%) – £75,000
Costs to Purchase – £2,000

Monthly figures:
Rent – £600
Mortgage @ 6% – £375
Management fee @ 10% of gross rent – £60
Monthly Operating Expenses @10% of gross rent – £60
Total monthly expenses – £495
Total cash flow (Rent – Total Expenses) – £105

Therefore:
Total money into deal (Deposit + Costs) – £27,000
Annual cash flow – £1,260
True Rate of Return (£1,260 / £27,000) – 0.046
The RRR is therefore – 4.6%

The Real Rate of Return is therefore a more exact reflection of return and will help you make more informed investment decisions. Resulting in investing in properties which will give a higher rate of return as it is not always possible to rely on the property’s value increasing. You should therefore run these calculations on your properties to see if they are profitable and have a positive return. If you have any questions or queries regarding the return on investment don’t hesitate to speak to us.

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Responsibilities of a Landlord

When renting a property you automatically take on responsibility for the safety of your tenants. It is important that all hazards are removed and the property is safe. A good way to do this is treat it as though you were living in the house yourself and keep all rooms and furnishings to an acceptable standard. It is important to do this as you are responsible for the property and you can also be prosecuted.

Recently Westminster council removed a large number of hazards from properties, and handed out 200 legal notices to carry out improvements. If landlords fail to do this they face fines of up to £5,000 and prosecution.

It is therefore a good idea to keep on top of all maintenance and that way it will not get out of hand. Use common sense when checking your property. If it is an obvious hazard it should be fixed. Clean up your own properties; don’t wait for the city council to take action.

Here is a quick check list to help you keep everything in order:
•Fix any damp patches. The longer you leave them the worse the damage will get.

•Fix broken windows and doors and make sure all handles, catches and locks are working.

•Staircases, bannisters and handrails should be solid and secure.

•Stairwells and hallways should be kept clear in case of a fire.

•If appliances and not used for a long period of time keep them unplugged.

•Plugs and sockets should not be damaged and checked by an electrician.

•Provide an Energy Performance Certificate for the property.

•Curtains and blinds (any flammable material) should be kept away from heaters and plug sockets.

•All gas appliances should be checked by a registered plumber.

Our staff will complete a check of your property and perform regular inspections but before you put it on the market you can check these things yourself.

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What to take with you to University

If you are going to University for the first time this year you have probably thought a lot about what to take with you. While you are packing and getting everything ready you may have forgotten a few things. We have put together a rather helpful list of things you may not think of to take with you to your new student home.

1. Food – Make sure you stock up on food such as pasta, cereals, tins, jars, and cleaning products that will last you a while, this way you don’t have to carry as much shopping back to the flat with you.

2. Toilet Roll – Easily forgotten but comes in very handy. No one wants to be caught short so treat yourself to a big pack to start the year!

3. ID and Documents – Don’t forget your ID. You will need this when registering on campus for your course as well as getting into the local night club. Your driving license and passport should be taken with you but kept in a safe and secure place in your accommodation. You will also need your National Insurance number to get any sort of job during term time and a recent copy of your bank statement is also useful to have.

4. Laundry basket and Clothes Horse – the dirty washing soon piles up especially if you’re going to lots of socials in the evening and lectures during the day. It also makes it easy to carry back and forth from the washing machine. A clothes horse is also useful. They can be hidden away when not used but provide a good place to dry your washing and save on expensive tumble dryers. It also means you don’t have to risk hanging washing over the balcony.

5. Home comforts – Everyone misses home so make sure you pack some home comforts. Pictures and little mementos are perfect to decorate your room with to make it a bit more homely. Even a rubber duck makes your student flat a home!

6. Laptop and Printer – You will most likely have your own laptop however make sure it is in full working order and ready to accompany you through hours of work, Facebook and Twitter. A printer is also very useful. It may seem expensive if you do not have one however it will save lots of panics and time going to the library to print your essays and dissertations. It will also work out cheaper in the long run if you have to print off large documents. You will also be very popular among your friends.

7. USB Stick – This will come in very handy when you are using university computers and your own laptop and means you can work on your project wherever there is a spare computer.

8. First Aid Kit (Plasters, Painkillers & Vitamins) – May your own first aid kit with all the essentials you think you may need. This saves any rushed trips to the pharmacy and means if you’re feeling under the weather it can be put right quickly. Freshers’ Flu will no doubt make an appearance in your student house so make sure you’re stocked up on painkillers and vitamin c.

9. Kitchen Essentials – Chances are everyone will bring cutlery, crockery and kitchen utensils or they will be provided for you in your student accommodation. Things like toaster, kettle and microwave will be provided so don’t worry about that. However make sure you bring a bottle opener, corkscrew and tin opener.

10. Rucksack/ Bag – Not to sound like your parents but a good size durable bag comes in very handy if you have lots of textbooks or notes which need to be taken between lectures or home regularly. A trip to the library could result in up to ten books so make sure you are prepared.

Now you have a good idea of what to bring to your new home during term time you just need to find the perfect place. That is where we can help you. We have a large selection of student houses and flats with as many or as few bedrooms as you require.

Look through our properties or give us a call and speak to one of our staff who will be happy to help you.

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Property Investment on the Rise

With banks failing us and pensions and savings schemes coming up short or offering a measly 2% return, it’s no surprise to see that booming lettings market has made buy to let property the hot topic. Many people are now turning to buy to let as the only way to guarantee some income for the later years, but where do you start?

Firstly you do your research. Ask your friends and family if they have any investments and where? Then use the internet to search for new developments as well as the second-hand market to compare prices. Talk to an independent financial advisor and discuss how much cash you want to spend and if you should inject all your cash or split it up and buy several investments on a buy to let mortgage.

Call several letting agents first and see what the demand is for the property in the area you are considering. Get an idea of costs and charges from the agents, from finder’s fees to fully managed charges. Don’t forget, if you are buying a leasehold property you need to factor into your costs at any service charge or the ground rent.

It is very important to take your time and not to rush into it. Don’t be forced into a snap decision by over enthusiastic sales staff or agents.
The average yield on a buy to let across Essex and into East London is around 5%. However, in letting hot spots, like around Essex University, the yields can reach up to 9% subject to the price you pay. Remember, capital growth is also very important in the long run and buying property with the X factor is not as important as getting the right price. If you can, look to base your decision on a seven to 10 year plan.

At Jackson & Co we can advise you on the best investments in the Essex area. If you need any other information or just want to discuss buy to let investments further give us a call: 01206 266714.

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Property Investment Dos and Don’ts

Our Director Dean Jackaman has put together a list of dos and don’ts for anyone thinking of investing in buy to let property. If you would like more information on investing in property contact us. We can advise you where to start looking, and how to get the most out of your investment.

Always:

- Do your market research first. The internet is a powerful tool, so use it!

- Do your figures before you make any offers? You could save yourself thousands!

- Always check the rental opportunity of your investment. Is it in a popular area? Does it have year-round demand? Is it close to a station or other amenities?

- Always get good advice from a recommended letting agent or investment company or consultant you can trust. Ask them to support the rental figures and popularity they may claim with hard evidence.

Never

- Buy anything on a whim or someone else’s recommendation without checking it out thoroughly first.

- Pay full asking price for anything brand new or second hand unless it is at least market value or below market value.

- Buy anything that requires lots of work if you know you will never have the time to do it.

- Take on a tenant who has not been thoroughly referenced by an independent referencing agency. Make sure you get a landlords rent guarantee from the agent.

- Rent to a tenant without a minimum of six months deposit or bond and make sure you read up on deposits. You can find out more at www.depositprotection.com

- Never buy all of your investments in one area as demand can change.

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A Guide to Becoming a Landlord

Becoming a landlord is easy with Jackson & Co, and we have put some top tips together to let you know just how simple it is. If you follow our tips your property will be let in no time at all. The closer it is to being problem free the quicker we can put it on the market and you can start earning from it.

1. Stay on top of handy work – All properties will have small bits of wear and tear or things that need maintaining, from a leaky tap to touching up paint work. These can be fixed by yourselves or you can use our recommended workmen. Any small maintenance jobs may deter an eager new tenant so it is best to have these done before any viewings take place. The better you present your property the more tenants it will attract and the more you will earn, the tenants will also have a great and easy let.

Jackson & Co is the only agent to do monthly inspections. This reduces any dilapidation. We also have our own non-profit maintenance team.

2. Neutral décor – An empty room will help prospective tenant visualise what they will do if they lived there and where their possessions would go. Neutral colours on the walls and floors will encourage new tenants as it is less personal and allows them to add touches of their own personality. If the property is furnished make sure suitable furniture is used, e.g. if it will be let to students a desk, chair and storage is useful.  We provide student furniture packs and blinds/window coverings if required.

3. Clean and fresh – Make sure the property is clean inside and out especially if tenants have recently left the property. The rooms should be fresh and clean, with no odours, cobwebs or stains. Windows should be clean and kitchen and bathroom. If there is a garden this should also be neat and presentable. We can recommend a cleaning service if required at very little cost.

4. Property maintenance – Maintaining the property during and after tenants is important. Wear and tear is inevitable and if maintained can easily be kept on top of. A quick response to any queries from tenants will encourage them to renew their contact or rent with you again. Guidelines are provided by the Association of Independent Inventory Clerks and RICS to determine what is fair when evaluating any damage.

As part of our property management service we will carry out regular inspection of the property and keep an inventory with pictures. This will ensure any dispute over damage can be settled easily.

5. Furnishings – If the property is furnished all appliances and furniture must be to a good standard and have passed the appropriate safety checks, including the British Standards of fire safety. Ensure all furniture is not valuable and can be replaced in case of an accident (they do happen).

6. Responsibility – When becoming a landlord you are responsible for the maintenance of the property including; electrical, plumbing as well as any other repairs including; appliances and white goods. It is also your responsibility to insure the property and the contents that your own, special landlord insurance is available. We can help advise on how much cover is needed on each property.

At Jackson & Co we have a long list of tenants ready to rent and a great track record of successful lettings. If you need any other information or just want to discuss becoming a landlord further give us a call: 01206 266714.

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Student Living

During your time at university one of the most important things you will have to organise is your student accommodation. It’s not only the place that you will live for the next one, two or even three years but also the place where you will study before your exams so it’s important to have somewhere to relax and work.

We have a set of very helpful agents that will help you find your perfect place and search the market. Here are our top tips when looking for a student flat:

Area

• When looking for next year’s accommodation timing is important. You need to be early as the student houses are soon snapped up. It also gives you a wider choice of properties to look at.
• Make sure you research the area.  Check out what is in the area, how far is it to the shops, and town centre. How long will it take you to get to your morning lecture and how close are the train stations for going home at the weekend. How much will it cost for a taxi back on a night out.

Flatmates

• Who do you want to live with? We have a range of student houses with different numbers of bedrooms so you can live with as many or as little of your friends as you want. Do you want a party house or do you need a quieter environment for your final year’s studies. Make sure you are certain you want to spend the next year in the same house as all your friends.

Property

• Be sensible; make sure you can afford the house. You will have to budget for rent, bills, food, a TV license, and of course your nights out. University halls are more expensive than private accommodation but you will have to organise your own finances.

Letting Agent

• At Jackson and Co we specialise in student accommodation so we are knowledgeable and can help you find your perfect flat. We can help with any element of your student housing to make it as carefree and easy as possible. You will be spending a lot of time in your house so it is important that you are happy with everything.

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NEW!! Just £395PCM

Who said that renting needs to be expensive?

Check out this charming, self-contained, one bedroom studio flat with separate kitchen and bathroom and in a fantastic location for commuters.

This won’t be on the market for long so check it out now and register your interest with Jackson and Co to avoid disappointment.

http://www.rightmove.co.uk/property-to-rent/property-30189649.html

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It’s Friday!

Jackson and Co property services would like to wish you all a very happy Friday.

What are you all upto at the weekend? Why not head over to our facebook page and let us know:

Jackson and Co property services are Colchesters number 1 agent for renting a flat in Colchester, renting accommodation in Colchester, Student accomodation in Essex, property management in Colchester, Essex.

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Tips for Tenants

Jackson and Co property services are leaders for property letting in Essex and for student accommodation for Essex University.

Jacksons Colchester are committed to offering expert advice when it comes to renting a flat or renting a house share in Colchester. Property sharing advice is quite prominent on the internet and we found this information particularly helpful so why no check it out:

http://www.accommodationforstudents.com/info/living-in-harmony.asp

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