If you hold a Northern Rock Mortgage beware you could be about to lose your house.
We all remember the scene in 2007 when there was a run on the Northern Rock Bank. Queues of people waiting around the country to get into the bank and withdraw their money. It was at this time the government stepped in and nationalised the bank.
As a property investor. my husband, had a large portfolio of mortgages with Northern Rock at the time, he has since reduced the number of mortgages held with them but still retains a substantial portfolio mortgaged to Northern Rock.
Since we have had the lib/con government the bank has been split into two separate divisions. One holding all the customers deposits and one holding all the mortgages. An organisation UKAR is now responsible for managing the Northern Rock mortgage portfolio under the new name of N-RAM.
In June we received a letter from N-RAM stating they wanted to revalue our portfolio and have a meeting to discuss our exit strategy. The meeting subsequently took place with our accountant present. Through probing questions from our accountant it was admitted that N-RAM want the portfolio revalued, if property prices have dropped since the last valuation - basically we all know they have dropped since 2007 - and LTV is higher than the terms and conditions of the mortgage agreement then N-RAM are claiming breach of contract and will be forcing the sale of the properties.
I don't know how many mortgages held by N-RAM would fall into that category but imagine what that is going to do to the housing market having all these properties repossessed and sold off on the market. I can see house prices plummeting and giving N-RAM more opportunity to dispose of all the mortgages it holds in a very short time frame.
Thursday 21 July 2011
Thursday 23 June 2011
What a Crazy Investment Week ....
The past 7 days have been one of my busiest weeks in a long long time. I am very much an advocate of working as little as possible each day. It's one of the perks of building up my investments and focusing on cashflow, the ability to work when I want to work. Something went drastically wrong last week!
So here is a brief summary of my investment week. (It is probably a good time to state that I am not offering financial advice. I am not regulated by the FSA and so cannot offer any advice. I purely write about my experience and urge you to do your own research or get financial advice from people authorised to give it.)
Property - lots of viewings and several new tenants has seen my portfolio hit the maximum on occupancy. In other words my properties are full with the exception of one where the tenant moves out today. I opted a few weeks ago to give this property to a RSL to manage. I wait to see if they live up to all the hype they have given me and how quickly they can tenant it. Phone is still running hot and I have topped up my waiting lists.
Shares - I have been investing heavily in shares. UK shares have fallen for 7 consecutive weeks making this the longest downturn in the market since the credit crunch meltdown in 2008. Today has continued with the downward trend. Worries around the Greek debt has the markets trembling as they prepare for the economic fallout if Greece defaults. Banks are particularly exposed to the default as they hold (by law) a percentage of their capital in sovereign debt. The continued downward trend has created some very cheap prices to buy into companies.
My strategy is two fold. I buy for dividends and I buy for capital growth. On the dividend side I had 3 companies in my portfolio going ex-dividend this month. The cheaper shares has allowed my to buy extra stock and hence boost my income for July and August when the dividends are paid. It's times like this I remember the words of the great Warren Buffett 'you want to be fearful when others are greedy and greedy when others are fearful'. At the moment sharemarket investors are fearful and this is my opportunity to be greedy and buy my shares at a discount price. Remember, I am only buying into companies that I have researched, seem solid companies and whose shares appear undervalued by my criteria.
My second strategy is capital growth where I buy penny stocks which I sell once they have doubled in value or once I feel they have hit their high. Surprisingly, most of my penny stocks have held their price or risen in value during this down time. Two stocks have fallen due to their link with oil. So I took the opportunity to purchase more as the companies still look fundamentally sound.
Bonds - I sold off the last of my bonds. I have been slowly selling them for several weeks as the returns have been dwindling. Finally, offloaded the last of them. I'm sure there will come a time when bonds are giving good returns again but now is not the time.
P2P - I have been involved in this type of investing for around 20 years. Mainly in New Zealand but since coming back to the UK the opportunities have been very restrictive until companies such as Zopa.com went online 6 years ago filling the void created by the banks failure to lend. P2P (Peer-to-Peer Lending) has grown significantly with Zopa now having 2% of the market and other companies coming online with niche markets and their own spin on ways to borrow money or you to lend as an investor. Ratesetter; Thincats; Yes and Funding Circle are just a few. I've used some of the money from Bonds to increase the amount held in these accounts and again this will increase the monthly cashflow over the coming months.
Gold and Silver - I've increased my holdings in both these commodities. Interestingly while US dollars prices for gold and silver have declined recently due to exchange rates UK stirling continues to increase in value. Gold bought at the beginning of the week has increased and now stands around £950 per troy ounce. I wouldn't be at all surprised to see gold reach £1000 per troy ounce during the second half of this year.
And finally Woodlands- I had a good look at some woodlands with the view to purchasing some for the income from the timber and capital increase in the land. Income from Woodlands is tax free. Capital Gain on the timber is also tax free. You do however pay capital gains on the increase in the land.
So there you have what has been a very busy investment week for me. Until the problems over Greece are sorted I expect the volatility in the investment world to continue and this might just be the start of what could be long days and busy weeks for a few months to come.
So here is a brief summary of my investment week. (It is probably a good time to state that I am not offering financial advice. I am not regulated by the FSA and so cannot offer any advice. I purely write about my experience and urge you to do your own research or get financial advice from people authorised to give it.)
Property - lots of viewings and several new tenants has seen my portfolio hit the maximum on occupancy. In other words my properties are full with the exception of one where the tenant moves out today. I opted a few weeks ago to give this property to a RSL to manage. I wait to see if they live up to all the hype they have given me and how quickly they can tenant it. Phone is still running hot and I have topped up my waiting lists.
Shares - I have been investing heavily in shares. UK shares have fallen for 7 consecutive weeks making this the longest downturn in the market since the credit crunch meltdown in 2008. Today has continued with the downward trend. Worries around the Greek debt has the markets trembling as they prepare for the economic fallout if Greece defaults. Banks are particularly exposed to the default as they hold (by law) a percentage of their capital in sovereign debt. The continued downward trend has created some very cheap prices to buy into companies.
My strategy is two fold. I buy for dividends and I buy for capital growth. On the dividend side I had 3 companies in my portfolio going ex-dividend this month. The cheaper shares has allowed my to buy extra stock and hence boost my income for July and August when the dividends are paid. It's times like this I remember the words of the great Warren Buffett 'you want to be fearful when others are greedy and greedy when others are fearful'. At the moment sharemarket investors are fearful and this is my opportunity to be greedy and buy my shares at a discount price. Remember, I am only buying into companies that I have researched, seem solid companies and whose shares appear undervalued by my criteria.
My second strategy is capital growth where I buy penny stocks which I sell once they have doubled in value or once I feel they have hit their high. Surprisingly, most of my penny stocks have held their price or risen in value during this down time. Two stocks have fallen due to their link with oil. So I took the opportunity to purchase more as the companies still look fundamentally sound.
Bonds - I sold off the last of my bonds. I have been slowly selling them for several weeks as the returns have been dwindling. Finally, offloaded the last of them. I'm sure there will come a time when bonds are giving good returns again but now is not the time.
P2P - I have been involved in this type of investing for around 20 years. Mainly in New Zealand but since coming back to the UK the opportunities have been very restrictive until companies such as Zopa.com went online 6 years ago filling the void created by the banks failure to lend. P2P (Peer-to-Peer Lending) has grown significantly with Zopa now having 2% of the market and other companies coming online with niche markets and their own spin on ways to borrow money or you to lend as an investor. Ratesetter; Thincats; Yes and Funding Circle are just a few. I've used some of the money from Bonds to increase the amount held in these accounts and again this will increase the monthly cashflow over the coming months.
Gold and Silver - I've increased my holdings in both these commodities. Interestingly while US dollars prices for gold and silver have declined recently due to exchange rates UK stirling continues to increase in value. Gold bought at the beginning of the week has increased and now stands around £950 per troy ounce. I wouldn't be at all surprised to see gold reach £1000 per troy ounce during the second half of this year.
And finally Woodlands- I had a good look at some woodlands with the view to purchasing some for the income from the timber and capital increase in the land. Income from Woodlands is tax free. Capital Gain on the timber is also tax free. You do however pay capital gains on the increase in the land.
So there you have what has been a very busy investment week for me. Until the problems over Greece are sorted I expect the volatility in the investment world to continue and this might just be the start of what could be long days and busy weeks for a few months to come.
Saturday 11 June 2011
Always An Investor, Sometimes a Gambler, Not A Trader
Yesterday I had a conversation with my lovely friend Helyn about share trading. Helyn and I met a few years ago at a property seminar, since then, to her credit, Helyn has invested a lot of time building up her financial knowledge and using the knowledge to start building her wealth. We are both suppose to be attending a share seminar in London next weekend but due to a family situation I have had to cancel. Following our chat I thought it a good opportunity to clarify my definition of a trader and why I class myself as an investor.
What's a Trader?
A simple definition for me is that a trader is someone who will buy shares with the intention of selling quickly to realise a profit. Depending on what the sharemarket is doing they may buy a share and sell it a couple of hours later for a profit. They may hold the share for a longer period but are always looking for the best time to sell it and get a profit. If the shareprice drops all efforts will be made to reduce the loss, get the money out and get back into buying again.
Being a trader is very time consuming, you need to spend incredible time reading, research, following every move the share makes. Guage the right time to enter the market and the equally important time to exit. While they hold the shares they need to keep an eye on streaming prices and be alert as to how the price of the share is moving.
Being a trader is very intensive and can be quite stressful.
What is an Investor?
For me, being an investor is all about buying assets that generate income. When I buy shares, like a trader, I will research the share thoroughly to ensure I am buying into a good company but for me the emphasis is on dividend yield and holding the share as long as possible so the income continues to come in regardless of the share price. I am continually looking for good dividend yield with a preference of 7% or higher and company stability to ensure the dividends continue regardless of the economic conditions. When I find a good share to buy I am likely to hold it for years as long as it continues to provide a good dividend. I was disappointed recently when one of the long standing high dividend paying companies in my portfolio was subject to a takeover and will subsequently be delisted. I am now on the lookout for another company to replace it in my portfolio.
For me the best part of being an investor is the freedom I enjoy. Because I hold shares for such a long time, unlike a trader, I spend very little time in the office. Each morning I check the price of the shares and any news that might affect it. Normally, that takes about half an hour. I'm then finished for the day.
As an investor I hold different types of assets; shares, property, bonds, gilts, lending etc. they all have one thing in common. They provide a regular income. They build my cashflow and the cashflow continues to come in regardless of whether I work or not.
Where the Gambler come in.
Although I buy shares with income in mind, I also buy shares in what I consider to be up and coming companies. These type of investments I look at are referred to as penny shares. Again I will research a company to check that it is a valid company but this time I am looking to see how likely I think the company is to deliver on its promises and increase the value of the company. I am looking for the value of the shares to at least double in value but will stick with a share if I think it will go higher. Sometimes I achieve those objectives and sometimes I lose money because the share did not perform as expected. This is where the Gambler comes in. Some of the purchases I have made have been sucessful. For instance I purchased shares in a gold mining company for 4p and eventually after a couple of years sold those shares for 46p. A nice healthy profit. With an oil exploration company I bought shares for 2p sold at 7p. The shares then dropped in price and I bought back in at 4p and again the shares are now at 7p. If they keep going up I may sell at 8p or again hold them for longer. I've also had my losses. I bought into a company at 12p and the shares within a few hours dropped to 8p and have sat there ever since. With penny shares there are likely to be more losses than gains hence I refer to these shares as gambling.
So for me there is a big difference between a trader, an investor and a gambler. I am always an investor, sometimes a gambler but not a trader.
What's a Trader?
A simple definition for me is that a trader is someone who will buy shares with the intention of selling quickly to realise a profit. Depending on what the sharemarket is doing they may buy a share and sell it a couple of hours later for a profit. They may hold the share for a longer period but are always looking for the best time to sell it and get a profit. If the shareprice drops all efforts will be made to reduce the loss, get the money out and get back into buying again.
Being a trader is very time consuming, you need to spend incredible time reading, research, following every move the share makes. Guage the right time to enter the market and the equally important time to exit. While they hold the shares they need to keep an eye on streaming prices and be alert as to how the price of the share is moving.
Being a trader is very intensive and can be quite stressful.
What is an Investor?
For me, being an investor is all about buying assets that generate income. When I buy shares, like a trader, I will research the share thoroughly to ensure I am buying into a good company but for me the emphasis is on dividend yield and holding the share as long as possible so the income continues to come in regardless of the share price. I am continually looking for good dividend yield with a preference of 7% or higher and company stability to ensure the dividends continue regardless of the economic conditions. When I find a good share to buy I am likely to hold it for years as long as it continues to provide a good dividend. I was disappointed recently when one of the long standing high dividend paying companies in my portfolio was subject to a takeover and will subsequently be delisted. I am now on the lookout for another company to replace it in my portfolio.
For me the best part of being an investor is the freedom I enjoy. Because I hold shares for such a long time, unlike a trader, I spend very little time in the office. Each morning I check the price of the shares and any news that might affect it. Normally, that takes about half an hour. I'm then finished for the day.
As an investor I hold different types of assets; shares, property, bonds, gilts, lending etc. they all have one thing in common. They provide a regular income. They build my cashflow and the cashflow continues to come in regardless of whether I work or not.
Where the Gambler come in.
Although I buy shares with income in mind, I also buy shares in what I consider to be up and coming companies. These type of investments I look at are referred to as penny shares. Again I will research a company to check that it is a valid company but this time I am looking to see how likely I think the company is to deliver on its promises and increase the value of the company. I am looking for the value of the shares to at least double in value but will stick with a share if I think it will go higher. Sometimes I achieve those objectives and sometimes I lose money because the share did not perform as expected. This is where the Gambler comes in. Some of the purchases I have made have been sucessful. For instance I purchased shares in a gold mining company for 4p and eventually after a couple of years sold those shares for 46p. A nice healthy profit. With an oil exploration company I bought shares for 2p sold at 7p. The shares then dropped in price and I bought back in at 4p and again the shares are now at 7p. If they keep going up I may sell at 8p or again hold them for longer. I've also had my losses. I bought into a company at 12p and the shares within a few hours dropped to 8p and have sat there ever since. With penny shares there are likely to be more losses than gains hence I refer to these shares as gambling.
So for me there is a big difference between a trader, an investor and a gambler. I am always an investor, sometimes a gambler but not a trader.
Wednesday 1 June 2011
Being an investor .....
1999 was a new beginning. It began quite simply with a colleague suggesting I read a book. The book has now gone down in history as one of the great financial books of its time. 'Rich Dad, Poor Dad,' by Robert Kiyosaki. I read the book, promptly went out and got the second one in the series. I was hooked. My husband wasn't convinced.
About a month later the same colleague asked if we would like see Robert Kiyosaki in Auckland, NZ in January 2000. The answer was a resounding yes. At the end of the seminar my husband suggested we buy the third book in the series. The five and a half hours trip from home from Auckland flew by as we discussed all the possible opportunities we had gained from the seminar. We took a couple of days off work and read book three from cover to cover twice. Our life as investors was about to begin or so we thought.
New Zealand has a high home ownership population and we decided the best thing for us was to move to Australia and start our new lives as investors. Unfortunately, it wasn't meant to be and within a week we were on our way to the UK following the death of several family members.
Our plans were on hold for about a year while we dealt with the family tragedies. We didn't lose sight of what we wanted to do and by 2001 we bought our first house. Run down and needing repairs. We lived in it for 3 years but always with the intention that it was going to be a rental property. In September 2001, on my husbands birthday we bought another property at auction. Two houses within 3 months. From there we set ourselves the target of doubling our portfolio every year. A strategy we kept going until Northern Rock (one of our major lenders) got into trouble in September 2007, at which stage we had 60 properties and we ground to a halt. The next two years were spent, trying in vain, to raise financing to purchase more properties.
Late August 2009, we were invited to another Robert Kiyosaki seminar. We again bought some more books, sat down and read them together and hatched the next plan of attack. At this stage we had a healthy property portfolio but little else in investments. So we decided now was the time to start building other income producing assets. Remembering the advice from the books. An asset is something that puts money in your pocket. Just keep building the asset column.
We had for twenty odd years dabbled in shares but never in a major way. That was about to change. We devised a two level share strategy. We would buy shares that produced a good dividend yield preferably over 7%. We would also invest in penny shares with the aim to double our money. Sell the shares and put half back into high dividend yield and the other half back into penny shares. We are still operating that strategy with good results.
We also set ourselves a goal of doubling our income from investments other than property every year. 2010 was a real learning curve as we tried different strategies until we found one that worked well for us. We didn't quite make our goal of doubling income that year. But the goal has already been achieved in 2011 and we expect it to be one of our best years for a long time.
We've continued our learning and our investments are now very diversified. We still hold our property portfolio, we have our penny shares and our high yield dividend shares. We operate a lending portfolio where we provide loans to other people through a third party and receive monthly interest in return. We hold gold, silver, copper and other commodities all of which provide capital growth.
We've worked hard to become investors in the real sense of the word. Every day we do something to increase our wealth and our income. We always remember Robert Kiyosaki's advice. The definition of an asset is something that puts money in your pocket. Keep building the asset column.
About a month later the same colleague asked if we would like see Robert Kiyosaki in Auckland, NZ in January 2000. The answer was a resounding yes. At the end of the seminar my husband suggested we buy the third book in the series. The five and a half hours trip from home from Auckland flew by as we discussed all the possible opportunities we had gained from the seminar. We took a couple of days off work and read book three from cover to cover twice. Our life as investors was about to begin or so we thought.
New Zealand has a high home ownership population and we decided the best thing for us was to move to Australia and start our new lives as investors. Unfortunately, it wasn't meant to be and within a week we were on our way to the UK following the death of several family members.
Our plans were on hold for about a year while we dealt with the family tragedies. We didn't lose sight of what we wanted to do and by 2001 we bought our first house. Run down and needing repairs. We lived in it for 3 years but always with the intention that it was going to be a rental property. In September 2001, on my husbands birthday we bought another property at auction. Two houses within 3 months. From there we set ourselves the target of doubling our portfolio every year. A strategy we kept going until Northern Rock (one of our major lenders) got into trouble in September 2007, at which stage we had 60 properties and we ground to a halt. The next two years were spent, trying in vain, to raise financing to purchase more properties.
Late August 2009, we were invited to another Robert Kiyosaki seminar. We again bought some more books, sat down and read them together and hatched the next plan of attack. At this stage we had a healthy property portfolio but little else in investments. So we decided now was the time to start building other income producing assets. Remembering the advice from the books. An asset is something that puts money in your pocket. Just keep building the asset column.
We had for twenty odd years dabbled in shares but never in a major way. That was about to change. We devised a two level share strategy. We would buy shares that produced a good dividend yield preferably over 7%. We would also invest in penny shares with the aim to double our money. Sell the shares and put half back into high dividend yield and the other half back into penny shares. We are still operating that strategy with good results.
We also set ourselves a goal of doubling our income from investments other than property every year. 2010 was a real learning curve as we tried different strategies until we found one that worked well for us. We didn't quite make our goal of doubling income that year. But the goal has already been achieved in 2011 and we expect it to be one of our best years for a long time.
We've continued our learning and our investments are now very diversified. We still hold our property portfolio, we have our penny shares and our high yield dividend shares. We operate a lending portfolio where we provide loans to other people through a third party and receive monthly interest in return. We hold gold, silver, copper and other commodities all of which provide capital growth.
We've worked hard to become investors in the real sense of the word. Every day we do something to increase our wealth and our income. We always remember Robert Kiyosaki's advice. The definition of an asset is something that puts money in your pocket. Keep building the asset column.
Monday 18 April 2011
Property - The best time to buy is now
Don't buy property its about to crash - I've been hearing this from the so called experts for the last five years. But guess what? if the naysayers keep this up for long enough then there will come a time when they will be proven right. That could be tomorrow, a month from now or 10 years from now. Despite the worst recession in a lifetime, or at least since 1930, property prices have held their values fairly well. Has property crashed? No. Has it moved downwards slightly? Then the answer is yes. But let's put this in context.
Everything that we invest in moves in cycles. That is it has ups and downs. If you drew a circle on a piece of paper and hold it in front of you at the top is the high. At the bottom the low. Over a period of time any investment will complete a circle (cycle) of highs and lows. But interestingly the low in each investment is normally higher than the previous low. The highs tend to go higher. This applies to property, commodities, shares etc.
Today and every day for the past five years I've been hearing that property prices are going to crash. But what is meant by a crash? If you think property prices will go back to where there were twenty years ago then I'm afraid you will be very disappointed. Inflation and wage rises over the last twenty years will ensure prices don't go that low.
Let me give you an example: A few months ago I was out for a drive with my step-father, who is now in his 80's. We passed a house with a for sale sign. He told me he used to own the house many many years ago. He had bought it for £2000 and sold it for £4000. He thought he had done really well doubling his money. Later I checked the for sale price on the internet and the property was listed for £269,000. Since my step-father bought and sold the property there have been several recessions and investment cycles. Even now house prices have reduced a little as a result of the credit crunch but I would consider it extremely unlikely that the price of the property listed for £269,000 would reduce to just £2000.
History shows us that despite house prices moving up and down on average houses will double in value every ten years. We know that everything moves in cycles and we are heading towards the bottom of the current cycle in the property market. However, if you can get mortgage financing then the best time to buy is now.
No matter what investments you hold, nobody can predict the top or bottom of the investment cycles. The best most investors do is to read the 'change' signals and hope to get into the investment just after it hits the bottom and out of the investment when it has just hit the top of the cycle. An investor then rides the market until they see the signals for the next shift upwards or downwards.
The property market has been in a downward movement for about four years. Indications are that we are nearing the bottom of the property market and may already have started the move towards the next boom market. If we have reached the bottom then buying the house my step-father used to own for £269,000 would be a shrewd investment and you would then be in a good position to ride the next boom. If we haven't reached the bottom then if you bought the property and lost a few thousand in value the losses would soon be wiped out as house prices start increasing again. Either way I believe now is the best time to buy property. If history repeats itself, and it usually does, in ten or fifteen years time the house will be worth over £500,000. Would you be happier waiting for it to reach that level or buy it now while it is worth £269,000.
I know what I would be doing. I'd be buying now at today's prices
Everything that we invest in moves in cycles. That is it has ups and downs. If you drew a circle on a piece of paper and hold it in front of you at the top is the high. At the bottom the low. Over a period of time any investment will complete a circle (cycle) of highs and lows. But interestingly the low in each investment is normally higher than the previous low. The highs tend to go higher. This applies to property, commodities, shares etc.
Today and every day for the past five years I've been hearing that property prices are going to crash. But what is meant by a crash? If you think property prices will go back to where there were twenty years ago then I'm afraid you will be very disappointed. Inflation and wage rises over the last twenty years will ensure prices don't go that low.
Let me give you an example: A few months ago I was out for a drive with my step-father, who is now in his 80's. We passed a house with a for sale sign. He told me he used to own the house many many years ago. He had bought it for £2000 and sold it for £4000. He thought he had done really well doubling his money. Later I checked the for sale price on the internet and the property was listed for £269,000. Since my step-father bought and sold the property there have been several recessions and investment cycles. Even now house prices have reduced a little as a result of the credit crunch but I would consider it extremely unlikely that the price of the property listed for £269,000 would reduce to just £2000.
History shows us that despite house prices moving up and down on average houses will double in value every ten years. We know that everything moves in cycles and we are heading towards the bottom of the current cycle in the property market. However, if you can get mortgage financing then the best time to buy is now.
No matter what investments you hold, nobody can predict the top or bottom of the investment cycles. The best most investors do is to read the 'change' signals and hope to get into the investment just after it hits the bottom and out of the investment when it has just hit the top of the cycle. An investor then rides the market until they see the signals for the next shift upwards or downwards.
The property market has been in a downward movement for about four years. Indications are that we are nearing the bottom of the property market and may already have started the move towards the next boom market. If we have reached the bottom then buying the house my step-father used to own for £269,000 would be a shrewd investment and you would then be in a good position to ride the next boom. If we haven't reached the bottom then if you bought the property and lost a few thousand in value the losses would soon be wiped out as house prices start increasing again. Either way I believe now is the best time to buy property. If history repeats itself, and it usually does, in ten or fifteen years time the house will be worth over £500,000. Would you be happier waiting for it to reach that level or buy it now while it is worth £269,000.
I know what I would be doing. I'd be buying now at today's prices
Friday 1 April 2011
Bond Scheme Runs Out of Money
As a landlord, when letting a property I take the risk that I will have a good tenant, capable of looking after the property, paying his/her rent on time and being a good neighbour. Unfortunately, no matter how many checks I do I often can't tell until the tenant is in the property how good they are going to be.
To protect against damage and rent arrears Landlords ask for Bonds. I know that for a lot of tenants the cost of a bond is something they cannot afford and so over the years Bond Schemes have started to help tenants get into properties. Schemes, such as, Solas Bond Scheme run here in Wales by the Welsh Assembly has been around for many years and is an organisation I have used for several years.
It concerned me last year when they started revoking guarantees on existing tenancies. Claims submitted to them at the end of last year were ignored. It took months of emails and phonecalls to get the paperwork through to make the claim.
Since January, I have been making weekly phonecalls on progress with claims. After many excuses the claims were finally approved but not paid. So for the past few weeks I have been chasing every week for payment.
Today, I received a phonecall, only after threatening legal action, advising they have run out of money and can't make the payment until the new financial year.
What credibility does an organisation have if it can't pay it's claims.
Will I be taking on Solas Bond Scheme applicants again? No
Will I recommend them to another landlord? No
To protect against damage and rent arrears Landlords ask for Bonds. I know that for a lot of tenants the cost of a bond is something they cannot afford and so over the years Bond Schemes have started to help tenants get into properties. Schemes, such as, Solas Bond Scheme run here in Wales by the Welsh Assembly has been around for many years and is an organisation I have used for several years.
It concerned me last year when they started revoking guarantees on existing tenancies. Claims submitted to them at the end of last year were ignored. It took months of emails and phonecalls to get the paperwork through to make the claim.
Since January, I have been making weekly phonecalls on progress with claims. After many excuses the claims were finally approved but not paid. So for the past few weeks I have been chasing every week for payment.
Today, I received a phonecall, only after threatening legal action, advising they have run out of money and can't make the payment until the new financial year.
What credibility does an organisation have if it can't pay it's claims.
Will I be taking on Solas Bond Scheme applicants again? No
Will I recommend them to another landlord? No
Friday 12 March 2010
Who needs Landlords?
Better late than never, I have just caught up on the news concerning the Wilsons. A husband and wife team who gave up teaching maths to become landlords in Ashford. They have a property portfolio of around 700 properties. The article I read, states they suffered badly during the recession and were only saved from being made bankrupt by Bank of England reducing interest rates. It goes on to say about get rich quick schemes and bad business decisions. The tone of the article came across as anti Landlords as did most of the comments made by readers. Yet I saw very little comment made about the number of tenants who failed to pay their rents causing the Wilsons to be in their predicament in the first place or the invaluable role they played in providing accomodation to people who don't own their own homes.
In comparison, my own BTL portfolio is quite small at around 60 properties. Before the recession I experienced very little rent arrears with only one or two of my tenants being in arrears. That changed during the recession to 95% of my tenants having rent arrears. So I can empathise with the Wilsons. Was it my fault that the recession hit so many of my tenants causing the defaults? That certainly isn't bad business practice on my part it came down to bad practices from banks causing the worst recession since the 1930's. The Wilson's didn't create the recession. They didn't cause their tenants to default on rent payments. They didn't cause their tenants to lose jobs. They are the victims of the current financial situation caused not by them but by greedy bankers and governments who failed to take action when it was needed. Yes, they benefited from the Bank of England reducing rates but I'm sure that like me they have many lenders who haven't reduced rates but instead continued to put rates up blaming the economy for increases.
In my town the local council advise they have a shortfall of 6000 properties. My 60 properties are a pittance compared to the actual number of properties needed for homeless families in this area. I like to think I am providing a service and helping families have a decent home to live in which the local council can't provide. Across the country it is a similar situation. Governments and Councils just don't provide sufficient housing to meet demand.
Who needs Landlords? The whole country does. Without us there would be far more homeless families. So give us a break. We aren't the villans in this country. We provide a much needed service. Yes, we make some money out of it. We also lose a lot of money from tenants non payment of rent and greedy lenders. We take the risks and we live with the consequences but doesn't that apply to anyone in business?
In comparison, my own BTL portfolio is quite small at around 60 properties. Before the recession I experienced very little rent arrears with only one or two of my tenants being in arrears. That changed during the recession to 95% of my tenants having rent arrears. So I can empathise with the Wilsons. Was it my fault that the recession hit so many of my tenants causing the defaults? That certainly isn't bad business practice on my part it came down to bad practices from banks causing the worst recession since the 1930's. The Wilson's didn't create the recession. They didn't cause their tenants to default on rent payments. They didn't cause their tenants to lose jobs. They are the victims of the current financial situation caused not by them but by greedy bankers and governments who failed to take action when it was needed. Yes, they benefited from the Bank of England reducing rates but I'm sure that like me they have many lenders who haven't reduced rates but instead continued to put rates up blaming the economy for increases.
In my town the local council advise they have a shortfall of 6000 properties. My 60 properties are a pittance compared to the actual number of properties needed for homeless families in this area. I like to think I am providing a service and helping families have a decent home to live in which the local council can't provide. Across the country it is a similar situation. Governments and Councils just don't provide sufficient housing to meet demand.
Who needs Landlords? The whole country does. Without us there would be far more homeless families. So give us a break. We aren't the villans in this country. We provide a much needed service. Yes, we make some money out of it. We also lose a lot of money from tenants non payment of rent and greedy lenders. We take the risks and we live with the consequences but doesn't that apply to anyone in business?
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