We have just exchanged on one probate property and completed on another. The question we need to ask ourselves is what to do with each property. Do we sell them on or do we keep them?
Currently, we are not in the sellers’ market; we are in a buyers’ one. However, as long as we can sell them for relatively more than we purchased them, there's quick money to be made. For one of the deals, the client did not pay the stamp duty. The solicitor was at a loss as to how this could be done, but there is a way. This reduces our client’s incoming costs by a large chunk, and strengthens the case for a resell.
In the course of my dealings, I have met both camps. Those who buy and sell aggressively, and those who never sell - they keep holding stock. The latter patiently wait, and refinance when required. A proponent of this school of thought once said to me, turnover is vanity and profit is sanity. This does not actually make sense literally, but what he meant was trading in property might make you feel good, but it’s when you hold onto property long term that you really cash in on the asset. My conclusion is there is no absolute answer. It depends on a few things, including the individual’s nature and circumstances.
The issues with each deal mentioned above can be bifurcated. One side is dealing with the paperwork, the other is refurbishing the actual asset. One property has a short lease, which needs to be extended, the scenario with the other property is a little more convoluted. The freehold is in escheat, which means the crown now owns the freehold. So this will need to be purchased off the crown. Doing just the paperwork side of both projects alone, will make the properties more
marketable and attractive. The reason being, that currently, no mortgage lender will lend on them. Once the lease issues are sorted out, they become eligible for a mortgage. This opens the property up for both end users and investors.
When most people purchase a property, the majority of the money is not theirs, it comes from the lender. Therefore, it needs to tick some boxes. When a property cannot tick certain boxes the demand for the asset shrinks substantially. And this opens up the possibility of a deal to be done, and a chance to resell the asset in a short space of time. We will need to crunch the numbers with both of these, as well as try to elicit an honest response from a local agent, which is easier said than done.
Either way, there is no disputing these were hard deals we purchased for our clients. There are more on the horizon, which will be crystallized in the next week or two. Do get in touch, if you are interested in the next deal.
Agony Agent is here to help!
Q: Are my tenants allowed to withhold rent for property issues?
A: This question could open up a debate and an article that covers over three pages. But, the short answer is yes, they can! However, it can only be done using the Rule of “Set Off”, which your tenants would need to follow to the letter. Now, the very best way to tackle this problem would be for it to be done head on. Once the issue, whatever it may be, has been reported; get the ball rolling ASAP, and get a contractor around there. Most tenants are placated when they can see that some work is being done to the property to remedy the issue, and that you are keeping them up to date with progress, such as waiting for parts. If you have a nice contractor, then they will take this off your hands and do the updates for you.
It’s very easy to avoid this if you keep lines of communication open with your tenants, and get things repaired as soon as you can.
Being in business invariably means being busy. I do not think I am unusual, in that it is easy to slip into a mentality that everything is important. I don't have enough time to do everything and all of my responsibilities lie heavily upon my shoulders.
This state of mind is exacerbated by the giddying expectations created by digital communications. The sense out there is that if a response is not received within hours then you are ignoring or neglecting that person.
When the world starts to shrink inside my mind, when my creative spark starts to dissipate and my natural enthusiasm wanes, it is time to access more freedom in my thinking by meditating on the temporariness of everything.
Like the English weather, all states of existence change. Nothing is permanent. Time changes everything. In the same way that clouds come and go, we are all born and we all die. We can only do our best and it helps to remember that all things pass. Nothing is ever as good as we hope. Nothing is ever as bad as we fear.
This does not excuse us to be irresponsible. And it does not imply there is no meaning in life. It just means that, by remembering that all things come to an end, we gain some healthy perspective on our lives and we can take each day as it comes.