Fs Where do you invest? We invest in the UK s #1 BTL hotspot, the East Midlands. Growth in the East Midlands has been second only to some London Boroughs in recent reports. That, coupled with the fact that house prices are half the national average means that we can buy a house for 50-60,000, and that same house will rent for 475-550pcm, meaning fantastic yields in an area tipped for growth in the future and undergoing lots of regeneration. fantastic combination. I ve heard it is possible to use the same deposit to buy multiple houses. How do you do that? simple explanation would be if you were to think about the property programmes on television. budding investor buys a house cheaply then renovates it to make it worth more money. t the point he has made the property worth more money, instead of selling the property, he instead, takes out a new finance product based on this higher value. This is called releasing equity. The equity released can, depending on the property, return some or all of your original deposit to you to use again on your next property. more detailed explanation and some real life proof and examples are show by our experts on our Fact Find workshops. www.fosseytaylor.com Page 3
If this property is so good, why don t you buy it yourself? We would, in fact we guarantee it. Fossey Taylor is not only a business that helps you buy an investment property, it is also allied to the family estates office of the Fossey Taylor family. The roots of the business are in a personal portfolio that is based on the same types of properties we buy today, good, high yielding investor grade property. That portfolio continues to grow by investing in exactly these properties. lso, the whole team at FT are encouraged to build their own portfolios and some are well on their way to their own property fortune. We guarantee that every property we recommend for you to buy, we would buy ourselves. In fact, our buying process means we often have to. If a client, for whatever reason, cannot proceed with a purchase, then we buy the property instead. In this way we underwrite every deal. It is one of the reasons people love selling to us, we guarantee the sale. It is very likely that we will be BTL neighbours! How much money do I need? If you use a typical BTL mortgage then you will need access to 30,000 40,000 per property, which covers a deposit on a property, doing a renovation to add value and also all associated management fees. We deal with clients who invest in larger projects that require more money, in blocks of flats for example and also with clients who buy property in cash. The biggest investments can be over 500,000 but we are always looking for a great yield, so the bigger the investment the bigger the return. Do I have to tie myself into a long contract and commit to buying multiple properties over many years and pay you all fees up front? No. Our contract does not tie you in at all. You buy one property at a time and pay management fees only when we have done our job on completion. www.fosseytaylor.com Page 2
Do you take an equity stake in my property? No we do not. Do you take any fees upfront? No we do not. You pay when we have done our job on completion. Up until you complete on a property all our time and advice is free. Is the Property you buy registered in my name? Yes, it is. You buy the property yourself and we have no claim over it at all. You are free to do as you wish with the property, though we hope you keep it with us to rent and manage and then go on to buy more. There is absolutely no obligation to do so. So you must pick all the best properties for yourself? In fact sometime it is the opposite. ll the properties we buy are very good deals, however we do little negotiating. The price we pay is usually the very top of what we would pay and significantly below what the vendor would ideally like. ll properties are negotiated to very specific and strict margins and percentages; we often negotiate in 100-250 increments. Very simply, if a property were to get mis-priced we could not pass it onto a client as it would be very obviously off specification. However on the odd occasion we do have a property that is a few 000 overpriced, but as we have put time and effort into it we do often buy it ourselves. Our time is free to ourselves of course, but I guess you say we more often than not buy the worst deals! www.fosseytaylor.com Page 3
Do I have to use your mortgage advisor and your solicitor? No you do not. You are perfectly at liberty to use your own. s part of our management fee we recommend a great team of professionals and they are all yours to use but if you wish to use your own that is perfectly fine. Having said that, to get the best out of our service, we do recommend using our team as we are much better able to help and advise you when we are all connected on speed-dial! Your fees seem high, what am I paying for? Our management fees are probably the most competitive in the industry and we are 100% confident they represent fantastic value. full and detailed explanation of what our fee covers is given at our Fact Find workshops. When you see the amount of work that goes into what we do, we know you will agree we are fantastic value. [That is before you find out that we actually create you more money than we cost you!]. How much do these properties rent out for? typical 2 or 3 bed family house rents out for between 475 and 600pcm. What if you can t rent out my property? This is a very common concern, we hear it a lot from people taking the plunge into first time BTL ownership. The reality is that so long as a property is in the right location, presented right and marketed at the right price it will always find a tenant within an acceptable, non-scary, timeframe. We are professionals and we will certainly have rented a property very close to yours very recently for the figures we are talking about. Because we do this so often we get very good market knowledge and predict rents quite accurately. Just ask us to show you a similar property that we have already rented in the area. www.fosseytaylor.com Page 4
What yield will I achieve? We aim for between 8-12% yields. If we achieve more or less than this then there will have been a reason for it. If a lower yield, then we will be looking at the property because it offers something special in terms of capital growth; if higher, then we will be putting the property to some intensive use. Do you buy houses or flats, leaseholds or freeholds? We buy anything where the figures fit and that can mean any of the above. ll things being equal though, we prefer a freehold house and 90% of what we buy are 2 and 3 bed family houses. If we buy something else then any disadvantages have to be priced in. Do you buy or develop HMO s? Yes, we do. They come under our bespoke plans. sk to speak to a member of the sales team to get more information. What if my property needs a renovation? Most properties we buy do. We employ over 70+ subcontractors to do just that. It is hard to do justice in writing, you would be best served by taking a trip to Nottingham to see the properties in the brick. Call 0115 824 84 84 to make an appointment. What if a building team does not do a good job? We guarantee that they do. We control everything very tightly with a detailed schedule of works, bill of quantities, fixed timescales and fixed budgets. If you come and see us in our offices we can take you to see some current renovation jobs. www.fosseytaylor.com Page 5
What happens if interest rates rise? This is something that is obviously outside of our control. However the properties we invest in are all what we term investor grade and for us that means that they offer good yields and are in good re-sale area. Therefore you are protected as much as you can be because if rates do rise you have the biggest possible profit margin to absorb any increase in costs, or you could just sell the property for a profit. Some of our clients reduce their exposure by fixing their mortgage interest rate or reducing their loan to value on the purchase. How much do you charge to manage my property once it is bought and tenanted? 8%, fully managed. www.butterfieldtaylor.co.uk What if you go bust, fall under a bus or go crazy and are hauled off by men in white coats? Whilst this would be bad for us, you would be fine. Your house is in your name and there are absolutely no contractual ties keeping you connected to us. You simply pick up your property and take it to another letting agency just like you would with any property. By the way, we are in great financial shape, so none of this will happen! How quickly can you find me a property? nything from 24 or 48 hours to 6 weeks. It has never taken more than 6 weeks to allocate a property to a client. When will you hit saturation and not be able to do this anymore? out. There are approximately 40,000 properties sold in Nottingham each year. We need to buy 15-30 every month at the most so, no, we will never run www.fosseytaylor.com Page 6
What if it no longer works where you currently invest? What happens to my investment and will you still be around to manage it? This is a possibility of course and it would be no bad thing for those who did get in at the right time. If prices go up then we may find ourselves in a position where we cannot buy at a price that gives us the yield we are looking for. We may at that point decide to go find somewhere else. If that were to happen, then rest assured, the 1000 or so properties we will have bought by then will still need managing and that will be a job in itself so, yes we will stick around. Where does my rent go? It comes to you, just like any normal BTL landlord/letting agency relationship. We suggest you open a dedicated property bank account if you have not already done so. Who pays the mortgage and other bills? Unfortunately you have to! s above, this is as normal and all bills come out of your own property account as you would expect. This is your house. How do you get all the good deals? Surly I could walk into any Estate gents and buy the property for the same amount? This is very unlikely, we operate in a market that most people do not know exists. We have gained our privileged position by being in the market buying properties for many years. Do you buy from auctions? Not much at the moment, we can buy a lot cheaper elsewhere. We used to and if things change, we will go back. www.fosseytaylor.com Page 7
Can I buy in cash? Yes of course and lots of our clients do. You will find the process a little quicker and straightforward if you buy in cash. How do I know if I can get a mortgage? We can help you find out. It is a quick and usually simple process and you could have an answer within 24-72 hours. What happens if a tenant does not pay the rent? Of course this can happen, property investing is not without some degree of risk. However we are professionals and our lettings department carefully checks and references tenants before they move in and then manages the tenancy closely to ensure we keep things like voids and bad debts to an absolute minimum. What happens if a tenant trashes the house and leaves? s with a tenant not paying their rent, there is degree of risk when investing in property. However this concern is probably the most often overstated. t the time of writing we have seen this less than a handful of times, in thousands of lets. In most cases the tenant deposit covered any costs to repair the damage and in the only case we can remember where it was more, we were actually able to recover costs through the courts. Do you rent to tenants on housing benefit? Some of our tenants may be in receipt of some form of benefit payments, some are private tenants. One thing we would say is that a good tenant is a good tenant and we try not to label a tenant with pre-conceived ideas as we are often proved wrong! If referenced correctly and the correct due diligence is done a tenant in receipt of housing benefit can often be a better bet than a private tenant [they do not lose their jobs!]. If you discount this sector you may not be maximising your opportunity. www.fosseytaylor.com Page 8
We rent to private tenants just as often as to LH tenants and as the landlord you have the final say in tenant choice anyway. What is the standard of the renovations you do? It depends upon what we are looking to achieve. ll renovations are done to a high standard of workmanship, however sometimes we spend more or less on fixtures and fittings or decorative features depending on whether we are trying to save cost or maximise value. Generally, if we are going to rent the property, and the work will not get it rented quicker or for more money or get add value, then we try not to do it. By following this formula we get a fit for purpose standard, that won t cause ongoing maintenance issues, at a price that means the work added more value than it cost. In this way we ensure we create an equity margin in each property. When you renovate a property, how long does it take? Usually between 4-6 weeks depending upon the property. You will know the timescale for a renovation before you buy any particular property. How many builders work for you? t the time of writing, over 70 directly subcontracted individuals. What if the renovation goes over budget? Our renovations are run to a strict timetable and budget. Bear in mind we have undertaken hundreds of similar renovations already and this gives us a great track record. When will properties run out? Generally in a typical year there are 30-40,000 properties sold in a single year in Nottingham. In a typical year Fossey Taylor might buy 200-300 properties, some of which were not on the official market anyway. www.fosseytaylor.com Page 9
We are a blip on statistics and we can t see properties running out ever. How long will you be around as a company? There will always be a good time to buy property, we plan to be around as long as there is a property to invest in. You buy houses fast. Do you expect me to buy a house in 48 hours? How can I do that? We simply get you prepared upfront. You ask all the questions and get all the answers before we even talk about a property. We term it as a client being Ready Willing and ble. Because of this when we have to move quickly you are 100% ready and prepared. t what point to you advertise the property for rental? We generally put the To-Let board up at the property as soon after we complete as possible. Realistically we may not be able to show prospective tenants around a property if it is undergoing major works. However we can usually start to show the property a few weeks before it is 100% ready with a view to the property being rented ready for when it is finished. www.fosseytaylor.com Page 10