How Does Green Deal Finance Work?

Via the Green Deal scheme run by the UK government, you can make your home more energy-efficient without paying a lot of money. Unlike other systems, it does not offer grants, but finance in the form of a loan. Still, this does not mean that it is financially burdening in any way. Find out more about Green Deal finance so that you can use it with confidence.

Scheme Basics

The scheme is designed to help you make home improvements which will contribute to energy efficiency. The list of eligible improvements includes wall and loft insulation, double-glazed windows, draught-proofing, underfloor heating, heating controls, boiler replacement and even solar panels. Other types of improvements may qualify as well. In order to make these improvements, you will receive a loan which is repaid under special terms and conditions.

Finance Eligibility and Amount

Any person owning or renting a property in England, Wales and Scotland can apply for Green Deal finance and qualify. There is no income assessment. You can qualify irrespective of the income which you earn. The finance is available from registered providers and lending criteria apply. The lender will take into account your credit score and history when determining your eligibility and the interest rate to be charged. Still, the requirements are lower so around 8 of every 10 applicants qualify.

The loan amount is based on the amount of money which you are expected to save on your energy bills. This will enable you to finance the most energy-efficient improvements which can be made. In general, you are free to make a personal financial contribution of any size. Similarly, you may use grants available from other schemes to pay for the improvements.

Repayment Term and Structure

Each Green Deal finance package has payments which are lower than or equal to the savings on your energy bills which you will generate as a result of the planned home improvements. In this way, you will incur no additional costs whatsoever. You will keep on paying the same bill or a slightly lower one. Once the loan is paid off, you will start generating major savings from the energy-efficient improvements.

The repayment term is typically between 10 and 25 years. You can select it in line with your financial plans. A longer term will result in smaller payments while a shorter one will help you to save on interest.

Finally, you should know that the Green Deal finance payments are automatically deducted from your energy bill. The loan stays with the property and does not go with you if you move to another house.

Buy to Let Is Still a Good Investment

During the economic slump of the past few years it has been a difficult time for both savers and those looking for a good investment. There are hardly any savings accounts that keep pace with inflation and even the price of gold has seen some dramatic falls.

However, there is one sector in the UK where investors can still achieve a good medium to long term return on their investment and that is in the buy to let property market. UK government schemes such as Funding for Lending and Help to Buy, designed to kick start the property market, have resulted in the ready availability of cheap mortgages, which are tempting more people into property investment.

Indeed, the number of private landlords in the UK is now getting up to around the million mark so clearly the buy-to-let market is booming. The easy access to cheap mortgages and strong rental demand continues to drive this market sector.

Buy-to-let lending has increased substantially in the past couple of years and many experts believe this is due to the wider availability of investment mortgages via the Bank of England's £80 billion Funding for Lending scheme. The scheme has had a significant impact on lending by improving liquidity and encouraging lower mortgage interest rates, which has helped first-time investors and is one reason for the good returns available to investors.

The other reason investment returns are good is that there is a continued high demand for rental property because, ironically, those people renting are finding it difficult to buy their own homes because they do not possess a large enough deposit. This has resulted in increasing tenant demand and, at the same time, a shortage of properties. Of course, not all of the rental demand may be long term; some renters could simply be waiting to save enough deposit to buy a home, others may be renting temporarily while trying to buy or as the result of a job relocation.

Many investors feel that a buy to let property will make their capital work harder and earn them more especially since average rental yields are around 6 per cent per annum; certainly a higher rate than any savings accounts or bonds in the current market. Since buy to let returns compare very favourably with savings accounts, stock market performance and other types of investment it is not surprising that more people are turning to investment property.

However, buy to let is not always a straightforward type of investment; there are numerous laws and regulations that every landlord in the UK must comply with. There are also the logistical issues of property maintenance, finding new tenants, handling the rental payments and chasing non-payment. Of course, this could be handed over to a letting agent but that would eat into the profits.There are also dozens of buy to let mortgages available to choose from and new investors should take professional advice from a mortgage broker to find the most appropriate deal for them, as well as investigating all the legal issues and risks associated with this type of investment.

7 Tips for Landlords When It's Time to Raise Tenant Rents

One of the inevitable consequences of owning rental income property is that from time to time the landlord finds it necessary to inform tenants that their rent will be getting raised.

The issue is not a slam-dunk. Rent increase is a sensitive subject that greatly impacts real estate owners and tenants alike for their own set of reasons.

The tenant, of course, is not going to be pleased that they will have to pay more to continue occupying the unit. Perhaps they can't afford to pay more. Or maybe it means having to do away with some simple pleasures or other goods and services. Whatever, a rent increase is never what tenants want to hear.

As a result, knowing full well how a rent increase could affect their tenants, property owners are confronted with their own fears and concerns surrounding the financial aspects of the decision.

The primary fear being, of course, that otherwise good tenants might decide to move out and leave the landlord with increased vacancies. Although this might be manageable for properties having many units, an increased vacancy rate for properties consisting of just a few units can be financially devastating to real estate investors.

Fair enough.

Real estate investors, nonetheless, are running an investment business that totally relies upon rental income and sometimes having to raise rents is the only way to make it profitable - or at least profitable enough.

Okay, so let us suggest some things for you to consider when rent increases are in order that might help minimize the risk of driving out your tenants. 

•   Avoid pure greed. If all you want is to produce more money from your investment without rhyme or reason than the other suggestions might not be relative and you may have to simply take your chances.

    

•   Understand your market. If your market area is generally saturated with other rentals than you might suffer a huge turnover of tenants due to a high supply-to-demand ratio. If supply is scarce, than the opposite is true and you might not suffer any turnover.

    

•   Know your property. How do your rental property's location, condition and amenities measure up to other rentals in and around the area? Tenants are less willing to endure the stress and cost of relocating over a nominal rent increase when you provide desirable features compared to other properties.

•   Know your tenants. How does your property's unit size measure up to tenant needs? For instance, your rent increase could motivate an accountant with several assistants occupying your small office space to relocate to a larger space. Or a single occupant in your two-bedroom unit to set off in search of a one-bedroom unit.

    

•   Watch your competition. If similar-type units are available just around the corner for less rent than you're proposing, chances are good that you'll lose tenants. If your rents are reasonably in line, than probably not.

    

•   Be smart. Modest increases given over consistent intervals are more easily understood than irregular ones that surprise and undoubtedly will alienate your tenants.

    

•   Offer a trade off. Perhaps a month-to-month tenant would be willing to sign a lease to get a rent that reflects less of a increase than otherwise proposed. This allows you to bump up your rental income somewhat and at the same time guarantees that you'll have an occupied unit during the term of the lease.

Rule of Thumb

Real estate investors will always run some risk when proposing rent increases because tenant expectations vary, circumstances vary, market conditions vary, and certainly personalities vary. Nonetheless, when the investor does his or her homework and then proposes an increase that has reasonable grounds, chances are good that the fallout will be minimal.

Here's to your real estate investing success. 

Benefits of Investing in Real Estate for Sale

Investing in real estate for sale is all about timing for you to succeed. It is always advisable to invest when the property market has favorable prices. This will allow you to enjoy lost interest and also use less capital when purchasing the property. Another perfect time to purchase property is when property owners are selling their properties at reduced prices.

Buying property as an investment is one of the best decisions that you will make in life. One of the benefits of purchasing properties for sale is the fact that the property will appreciate in value with time. Capital growth is one of the reasons why financial consultants advise their clients to invest in property. This growth is sure and steady. For people who like safe investments, property is one of these investments as no matter the location of the property, you will indeed make a profit when you decide to sell it. There are cases where you can decide to rent out the property. This will give you immediate returns on your investment. Here are other benefits of investing in real estate:

•   Insurance: Insurance is a great way to mitigate risks that comes with investing in real estate. Indeed insurance companies are always willing to offer property insurance to investors. You can insure this property for sale against risks such as fire, theft or damage. In the event of a misfortune, the insurance company will assist you in recovering from the loss. There are different policies that are available for clients. This allows them to choose a policy based on their budget and needs.

•   The best option of investment for beginners: The best thing about purchasing properties as an investment is that it is open to anyone. You do not need a vast amount of knowledge or a lot of money to invest in property as in the stock market or operating a business. Property development companies selling the property will often require a down payment. The rest of the payments can be made in installments. This means that with proper planning, anyone has the ability to invest in this venture.

    

•   Property for sale allows the investor to be in full control of the property. This means that all the decisions regarding your investments are solely yours. You are also the decision maker when it comes to how to reinvest the returns that you receive from your property.