By taking advantage of dips in the property market, one man has amassed a personal portfolio of £25million.
As prices start to fall, it may be the perfect time for buyers to get involved with the property market before it surges.
Bola Ranson is a full-time property investor who helps aspiring property investors to get on the ladder despite economic turmoil.
The average UK house price fell by 3.8 percent on average in July this year – the fastest annual rate in 14 years, according to the latest Nationwide House Price Index.
According to Nationwide, house prices dropped by 0.2 percent month-on-month in July, to reach £260,828 on average with the price of a typical home now sitting 4.5 percent below the August 2022 peak.
This has not been a huge surprise for investors, as prices had fallen consistently since the beginning of the year.
Property website Zoopla has forecast prices to fall by five percent over 2023 and forecasts from the Office for Budget Responsibility (OBR) say that house prices could fall by 10 percent over the next two years.
Having developed solid relationships with quality new build developers and partaking in several residential and commercial deals in the UK, Mr Ranson has shared his top tips on how to save money and make money in the current UK property market.
Mr Ranson said: “If you are looking to buy, maintain a good credit rating. This sounds obvious but in a market of rising interest rates when lenders are often tightening criteria, presenting yourself in the best possible light is crucial.
“Successful property investors understand that a powerful tool to build wealth is debt. It allows us to buy and control a larger property (or properties) than we would ordinarily be able to. Maintain regular credit card payments (you don’t have to clear them every month), pay utility bills until – set up direct debits to pay the minimum monthly amount if necessary. Just don’t pay late whatever you do.”
He urged people to take advantage of the uncertainty that interest rates are creating by offering well below the asking price. Without a doubt, properties are taking longer to sell due to buyers realising that their cost of funding a property purchase have increased.
“Take advantage of this, be bullish,” he added.
Rather than making offers at the asking price, people can try and make offers well below. Mr Ranson continued: “Push your luck and offer 10 percent or 15 percent below and see what happens. Sellers are far more likely to listen to you now than they would in a strong bullish market.”
Additionally, if someone is planning to build a portfolio of properties, they can think about buying in a limited company rather than their personal name.
Mr Ranson explained that the tax change brought in by Chancellor George Osborne back in 2017 (nicknamed Section 24) means that people are taxed much more heavily on rental income when they own property personally.
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However transferring properties into a company later can be expensive due to capital gains tax and additional stamp duty, he said so Britons should do their own research.
Alternativel those looking to make money can consider renting out their spare bedrooms.
Mr Ranson said: “You can use a site like Airbnb to let out on a short-term basis and maximise your income or let out on a longer-term through a site like spareroom.co.uk. You will be surprised at how much extra revenue this can generate. You could even move into rented accommodation or with family and Airbnb the whole property.
“Another way to generate quick revenue is to move into rented accommodation or share with family and rent out your existing home as an HMO (House in Multiple Occupation). This means renting each room to a separate person. If you own a three-bedroom house you would end up with three separate tenants all paying you rental income.
“Depending on which borough you live in you may need to apply for a licence to do this but it’s an excellent way to take advantage of the current rising rents and also boost your income temporarily.”
Alternatively, he suggested that if someone is struggling to keep up with their mortgage payments, they can try and ask their lender to switch their mortgage product.
Most lenders will have alternative products and usually, these will be in the form of two- or five-year fixed rates.
“This could save you hundreds monthly,” he added.
Lastly, he suggested remortgaging as an option for cheaper monthly bills.
Mr Ranson said: “If your current lender is not offering you any alternative products, consider switching to a new mortgage lender. An independent mortgage advisor is best placed to assist you with this.”
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