First Default

Checking my rental payments the other day when I noticed considerably less money in the account than I had been expecting from the Park Central property. I immediately emailed the letting agency City Life and got a reply asking me to contact their accounts department. I rang them and they said that the tenant had not paid in the beginning of the month and they had written to the tenant and copied me (I hadn't received anything from them).

I asked when they were going to follow up and they said they intended to ring that day, maybe slightly cynical but I did wonder if they would have rung the tenant if I hadn't followed up. They promised to call me back the next day and didn't so I rang them again. Different lady this time but she said she would follow up and ring me back, waited a few hours, nothing so I called them again. To be honest I was getting really p*ssed off, if they couldn't be bothered to ring me the landlord was anyone actually ring the tenant to find out why they hadn't paid?

I rang them again this morning and they say it has been sorted out and the tenant came in this morning and paid in cash and I would receive the money in my bank account in 3 working days. I'm still not happy as I don't see any evidence that they have taken this seriously and I don't know how much confidence that a) I will actually get this months money in 3 days or if I do b) whether I will have the same problem next month.

Hope I'm wrong

Getting your money back.

Most new property investors are aware of the need to buy BMV (below market value) but many are not prepared for the additional costs that can come out of the woodwork just when you think its all done. Its not only the usual things like Solicitor, stamp duty, mortgage fee but if you are providing a furnished property then bed, sofa, furniture, and perhaps a microwave to reduce the wear and tear on the cooker, also unexpected things like travel and hotels if the property is a long distance from where you live and you need to visit it.

I have been investigating ways to not only get the lowest possible price for this additional expenditure but also get a percentage of your money back once the item has been purchased. My method is simply this:

1/ Use a price comparison site such as Pricerunner or Kelkoo to compare prices and establish the lowest cost retailer.
2/ Use a cash back referrer site such as Rpoints to get up to 10% of your low cost purchase refunded.
3/ Pay for the item with a cash back credit card (Amex Platinum and MorganStanley offer up to 3% for the first 3 months)

Obviously you need to exercise some common sense, don't buy an item you don't really need or use a more expensive retailer just to get the referral points. Identify the item, make sure you've got the lowest price, then see if you can obtain any cash back.

Bottom line is that it is good business sense if you have to buy the item to get the lowest price you can achieve.

Completing the Mortgage Application -Yawn

We received a pack for the application for the mortgage on Adelaide Wharf last Saturday and I've been putting off doing it because even though they make it as simple as possible its still a lot of digging to find out all the pieces of information they need to make the offer.

The documents to be completed included
1/ Mortgage application form
2/ Proof of Id (photo id such as passports or drivers licence)
3/ 2 * proof of current address (bit difficult as most of my utilities bills are online these days)
4/ Fee agreement
5/ B2Let fact find
6/ Terms of business letter.

Finally got it off today after ringing round Savills and Serliana for some help with the finer points of some of the questions..

A lot of stuff of in the press lately regarding mortgage interest rates. It seems that opinion is divided, one lot saying get a fixed rate at any costs and another lot saying stick with the variable rate as the interest rate will come down over the next year or so, so don't tie yourself in to high fixed. I will probably go with the variable, just hope I don't regret it!

Admin, Admin

Got to the bottom of the charges with City Life and the full amount has now finally been paid so reasonably happy there although just checked on RightMove site and the rent for the Park Central property 1 bed apartments seems to have moved up by about £50-£75 per month!. Probably a lesson to be learned about everything coming to the man who waits!

More mortgage stuff coming through on Adelaide Wharf now, not due to be completed until August so it seems a little premature but better now than later.

Getting bombarded with emails and phone calls from people we met at the NEC show last weekend. The problem is that there is just so much information you need some sort of filter so that you only concentrate on the stuff that is valuable to you.

To the Property Investor Show at the NEC

Anne and I went to the Property Investor show at the NEC today. It was very informative and although there were plenty of people there it wasn't packed. It was free to get in although the associated costs where a bit steep. I thought that parking at £7.00 per day was a bit extortionate and likewise the sarnies at £3.00 for 2. I guess its not too bad if your used to London prices but this is Birmingham!

I had thought that it would be primarily a UK based property show but it turned out that probably 75% of the stalls were for overseas stuff. It was still interesting but it was sort of running the gauntlet at times charging down the aisles trying to avoid the barrages of leaflets and invitations to chat about opportunities that you knew you just weren't interested in.

We had a long chat with a company called Smarthouse that were building/renovating purpose built accommodation for students around Leeds University. The guaranteed positive cashflow for a year sounded good especially after we are losing money on Park Central but I can't help thinking this might be just another form of discount. If we are interested the I probably need to follow up and see exactly how long it lasts and talk to other investors as to how easy the property is to let after the initial guaranteed period.

We went to a seminar given by Jonty Crossick from Ready2Invest, got to say it was one of the best free seminars that I have been to, mainly because he was trying to give actual advice rather than explicitly trying to sell us something. The seminar was basically about buying the sort of property that was right for you and he covered financial goal setting and doing your own risk profiling. We had a long chat with him afterwards when he gave his thoughts on the UK property market (not as buoyant as it has been, still lots of life in it but be careful to pick your location) and some of overseas areas that he was looking at. He came across as down to earth decent bloke who had made good with some intelligent strategies.

All in all a good day even though it was a bit rushed and we couldn't find the car in the car park!

First Rent comes through - eventually !

Took a while to get the first payment through from CityLife, rent paid on the 2 March by the tenent but didn't actually get my cash through until the 13th which I wasn't exactly happy about however I guess that there are inital set up processes to go through also they provided a detailed breakdown of the costs they had taken from it. The problem is that it seems to be extremely light from what I was expecting, Serliana brokered a deal with CityLife for property club members but it looks like I've been put through at standard rates.

I rang them (late on a Friday) and managed to get through to a lady in accounts who promised to look into it Monday for me. I sent her the emailed confirmation and she said it should be pretty straightforward to resolve so hopefully it will get shorted out pretty quick.

I've spent the last week or so reading the Rich Dad, Poor Dad books 1 and 2. They seem to be pretty seminal reading for would be property investors so intend to write my review of them next week. I might have a go at using the Google documents and spreadsheets functionality and providing a link to them rather than simply writing up in the blog.

Good News on PC

Got some good news from City Life on Tuesday, they had someone who wanted to make an offer on Park Central, hurrah! The couple wanted to move quickly (double hurrah) and be in the apartment by Thursday 1st March. Obviously suited us, so we asked City Life to run the usual background and credit checks and when they came back ok, we said ok!

Even though we got the apartment cheap and the letting fee is more than Serliana estimated, the cash from the let doesn't cover the mortgage which is a bit of a concern especially with the management fee taken out however its still a damn site better then paying mortages on your own house and the apartment. I guess the way to look at it is as if you were simply paying money into a long term savings account. Still I think for the next property that we buy we will look to make a small profit on.

I wasn't too sure if we needed to do anything or sign anything but apart from the inital agreement with City Life that seemed to be about it. There was a bit of an issue with the keys, I had left them with Arkade who were orginally marketing the property for us so I needed City Life to get them and have additional keys cut for themselves and for the lettor, unfortunetly they only picked up 2 of the keys so while the lettor can get in the building and the aprtment, they can't as yet get out on the balcony! Still plenty of time to get them the key and its not exactly balcony weather yet anyway.

Couple of things to confirm with City Life such as who holds the letters deposit, what are the arrangements for paying us the monthly fee, Serliana discount etc. Probably drop them a line later today. Its getting exciting again!

House Dressing

I went to the Park Central apartment again yesterday and spoke to Andrew Kay from Arkade Properties. He gave us some useful tips about making the property seem a bit more attractive in order to distingush it from the others that were being let.














We rearranged the furniture and added some simple touches like cushions, bowls and lightshades over the bare lightbulbs.














In the kitchen area we added some tea towels, cups, bowls, tea, coffee, sugar pots etc















In the bedroom we put some pillows and sheets on the bed and added a bedside table lamp















It made a quite a difference and it certainly looks a lot more "homely" now!

Currently being let by:
Arkade Property - Danni 0121 236 9918
Stirling Akroyd Lindsay 0121 616 3535
City Life - Farhad 0121 456 3334
Fleetmilne - Ben 0121 643 6996

Take The Virtual Tour of the Park Central Apartment

Park Central

Had a good look round the Park Central property today. Its just off Bath Row near the Five ways roundabout in Birmigham city centre. Approx 5 minutes walk to the nearest railway station, about 10 minutes to the main Birmingham New Street Station and about 5 minutes to Broad Street for entertainment and shops. The property is accessed through this pretty impressive door (Well it took me ages to find the right key!). It is on the first floor and has an entry phone which is a nice security feature and there is a lift close to the apartment door.















The first room I went in was the kitchen. It is very modern and has a decent size cooker, a washing machine/dryer, plenty of cupboard space and power points.

and a very large fridge freezer!

The lounge itself is functional and simple but I guess that you have to be careful not to impose your own standards on potential customers, I like to think of it as a "Blank Canvas" :-) It also has a well locked entrance on to the balacany

Next I went in the bathroom (just for a look!) there is a wc, a separate shower and bath and a wash basin with a heated towel rail

Next the I went into the bedroom, like the lounge it is quite simple but functional, it has the bed, a set of drawers and a large wardrobe.

I also went out on the balacany for a look round, its quite secure, not overlooked by any larger buildings and as the end apartment its not sandwiched between anyone elses balacany.

Currently being let for me by Four letting agencies

• Arkade Property - Danni 0121 236 9918
• Stirling Akroyd Lindsay 0121 616 3535
• City Life - Farhad 0121 456 3334
• Fleetmilne - Ben 0121 643 6996

Getting paid for paying the bills

One of the things that I learned during the whole Park Central property buying process was that you are regularly asked for quite large amounts of money! Not only for the property purchase itself but for the various sundries that accompany it. Solicitors fees -£1200, Brokers fees £600, Furniture - £900, Blinds - £250 etc.

I decided that I would use my credit cards to extend the amount of time before I had to pay the money and so increase the amount of interest before I had to retrieve the money from my savings account. Then I came across the website run by Martin Lewis called www.moneysavingexpert.com Martin suggested a way to generate extra cash by getting 2 particular credit cards: MorganStanley (Mastercard) and Conran (Visa).

These are 2 of the best moneyback credit cards on the UK market today and should pay back between 0.5%-3% of your total credit card purchases. Its not a fortune but if you have to spend the money anyway why not get a couple of hundred pounds a year back for what you would have to have spent anyway!

Mid week, mixed blessings

Good news on the money refund from Serliana turned up in our account this morning. I had thought that this would be a sticking point but it came through about a week early so I was very pleasantly suprised.

Still a bit concerned about the lack of tenants at the Park Central property! Feedback from Suzanna at Serliana was that Arkade Lettings have reported a lot of interest but no offers yet. She has told them to push harder and taken out additional advertising so I guess they are doing as much as possible but it is the end of the month and the first mortgage payments are due and I don't have a tenant yet, guess this is the start of the sleepless nights!

Got an email from Mike from Amateur investor (see links section), a US Property investment site. He suggested getting my blog added to pfblogs which aggregates feeds from personal financial webloggers, I sent them an email and I've now been added to http://blogsonrei.com/. Have to wait and see if it results in significantly more traffic.

Mortgage on where???

Still no news about letting at Park Central yet although the mortgage company rang me to explain the inital mortgage payment would be for January and February together. One thing that threw me a bit was that the address that they quoted was not one I recognised! I assumed that the address I was used too was the plot address from the builder and not the actual mail address of the property, either that or I've got a mortgage on the wrong place!! Probably need to follow up this up with the Solicitor.

I've had really nice comments about the blog recently. Brett Woods from "your property club" emailed me to say it was a "fantastic idea for a blog" and I've had similar comments from people who have been thinking about starting property investment but were confused about how to go about it. All I can say is keep reading and let me screw it up first! If anyone has any questions or comments then please use the comments facility at the bottom of each post, I promise not to censor any relevent posts.

Show Me Da Money

One of the reasons we went with the Serliana property investment club was that by taking on a large number of properties from the developer they are able to negotiate a considerable discount which they pass on to their clients (i.e. us!). In order to get the mortgage they arranged for a RICS surveyor to value the property to confirm that their discount was “real”.

Now we have brought the property at Park Central we now need to get the Serliana discount paid to us. So far, this is a lot simpler than I initially thought it would be, we just had to pass a copy of the mortgage broker and solicitors invoices to Susanna at Serlinana and to present them with our invoice (Fortunately they also provided us with a template document to use for the invoice). I passed her the invoice on Thursday, and received an email saying that it was all in hand but they needed to wait for the developer to pay them the agreed fees before they could it back to us. The original agreement said it would be paid within 30 days so I guess worse case is 30 days on from 5th of Jan so anytime before 4th/5th Feb is good.

I also spoke to Susanna and Lucy about how the letting was going. She said the feedback from the letting agency was they had had several people round but no takers yet. She said the fact that there wasn’t a parking space with the apartment may be putting some people off. Actually this cheesed me off a bit because when I was initially looking at the place I talked to Serliana about the lack of a parking space and they said that it wouldn’t matter as there was plenty of parking space around the development. I'm going to have to have a chat with the letting agency myself.

The Waiting begins

After the purchase of my first property investment at Park Central, Birmingham went through last Friday it all went a little quiet, I suppose I was waiting to hear from either Serliana or Breytenbach as to who had the keys. Heard nothing by Wednesday so I emailed Suzanna at Serliana and she told me that Letting agents had been given the keys, the furniture had been delivered, the blinds would be fitted Saturday, and viewings had been scheduled by the letting agent for Thursday and Saturday!

So, seems like everyone is on the ball but I can't help worrying about a long void especially with mortgage rates going up yesterday, not that it effects me too much as this property is on a fixed rate mortgage in fact I suppose it could be argued that the more "un-affordable" property is to buy the more people will be looking to rent?

Still hope we get someone before too long.

D-Day on Park Central!

Well I'm finally a "real" amateur property investor in that I've now got an actual buy to let property! I took the day off work in case anyone needed to get hold of me quickly but in the end it was a very quiet day. The furniture providers (David Philips) rang to say they needed a deposit and they would be delivering next Tuesday, then the solicitors (Breytenbachs) rang me around 4.00PM to say it had all gone through alright. Thank you Serliana, thank you Breytenbachs, thank you Savills Private Finance!

To tell the absolute truth it was a bit of an anti climax, when you buy a house your going to live in it is a time of high excitement, theres the last minute tranfer of funds, the move itself, the packing and unpacking, meeting the new neighbours etc, etc. In contrast, this was a bit like opening a savings account, your broadly optimistic that your going to make some money (or you wouldn't be doing it) but its not like its going to change anything significant, at least not immediately.

Crucial bit now is to get someone in to let it, so over to the letting agency Arkade Properties.