Category Archives for "Property Rant"

Cashflow and Interest Rates

Cashflow and Interest Rates… where they’re likely to go?

Video Transcription:

Hey guys. So Bretts Property Rants. So what I wanna chat about, I guess, is cash flow, and in particular, interest rates, and where they’re likely to go.

I mean, we have had the lowest interest rates ever in the history of the world, I think, to be fair. Probably not the history of the world. That’s probably a, but certainly, in modern history, it’s been the lowest for the longest. And I don’t think they’re ever gonna go back up to where they were, because, you know, corporate debt in America is nine trillion. You know, their consumer debt is 22 trillion. You know, they’re huge numbers. And the problem is if interest rates go too high, then they can’t afford anything, and they’re gonna have massive defaults, et cetera, et cetera, et cetera

And there’s a whole range of reasons why I don’t think it’s going up too high. But I do think the interest rates will go up, and they will need to go up, and I think the key is for you, personally, have you actually calculated all of your debts, put ’em all together, okay, and then worked out if interest rates rose, let’s say 1%, 2%, 4%, you know. I think at 4%, that’s really going to be a massive stress test, you know. And when we look at that, that’d be a massive jump for most people.

So I think if you can sustain a 4%, you’ve got absolutely nothing to worry about. I think 2% is about what, you know, what you really need to account for and you really need to calculate. If you’re gonna struggle, then what you might need to do is, right now, start to look at how you can start putting money aside, maybe paying off some debt or, you know, paying down that debt. If you have to, sell a house. If you have to, you know, don’t take on more debt. All these sorts of things. Don’t just include houses, ’cause this is not just about houses. This is all debt, okay.

The availability of your debt is gonna start decrease, and the money supply is decreasing right now. So, effectively, what that means is as the money supply decreases, you tend to find we go into a recessional downturn, okay. And so all these sorts of things are starting to kick in and start to move forward now. So, you know, you can sit there and say, oh, no, no, no. I’ve been watching the hundreds and hundreds of YouTube channels that say, no, house prices are gonna continue. You know, corporate debt’s gonna continue. Everything’s fine. But I would just say that lot of the indicators now are pointing towards a downward happening. And it could be in 2020, it could be in 2021, it could be in 2022 but somewhere around now. I mean, there are lots of things that countries could do to stimulate and to sort of, you know, stretch it out.

I think the UK’s in a reasonable position because it’s got a very strong economy. And actually, to be fair, we’ve had a pretty rough time over the last two years with Brexit. And that’s kept, the growth down. And that will play into, that’ll put us in a good position if the rest of the world does go into a downturn. That’s not to say that we’re not gonna, you know, see things changing and not have to do this. But I think for this, you know, what have you personally done? Have you done that calculation? If you haven’t, it’s probably time to do it, and then if you want to, you know, one of the big things we do is portfolio management.

So, if you’re not sure what to do, if you’re not sure how to do it, get all figures together, you know, book with a team, and, you know, sit down with them, and get them to run through the implications of that. ‘Cause when you run through the implications, you know, knowledge is power, and you can act on knowledge. You’re sticking your head in the sand and waiting for a kick up the ass, you know, that’s not the way to do it. That is not the way to do it. That’s gonna create stress. Maybe, right now, you can live blissfully, but that’ll create stress down the way, whereas you don’t need to.

Actually, what we find with most of our clients, they are fine. Once they do the numbers, they realize they’re fine, and they can then almost kick back and relax because they don’t need to worry. By far the majority of people are gonna be absolutely fine with that sort of 2% increase in interest rates, okay. So if you’re sitting out there, and you’re concerned about it, and you’re thinking your head in the sand, don’t, give the team a call, like go through the numbers and really get you a sense, you know, some certainty. That’s really what we want, is to give you a sense of certainty as you’re building a portfolio. Now it may be that there’s actually some leeway there if you take advantages and opportunities now. ‘Cause what we’re seeing is, you know, vendors and developers are starting now to give a bit more, you know, flexibility on their pricing, because things have slowed now You know, the numbers are slowing down.

Look, the price houses haven’t dropped off, but they will follow. And, you know, that will start to come, you know. But, right now, you know, things are still looking pretty good. But now’s the time to really make those adjustments if you need to make them.

Alright, guys, have a great day. Live with passion, see ya.

Bretts Property Rants

The North and South Divide in the UK

Video Transcription:

Hi, guys. Brett’s property rant. I was just reading an article about the north-south divide in the UK, between the southern counties, London and the southern counties, and the northern counties. Just talking about how that’s changing now. Now Wales actually kinda doesn’t include it. That pattern is changing. I think, to be fair, we’re gonna see a lot more of that. I’m saying right now, and I’ve been saying for the last couple of years, we’ve sort of backed away from selling in a lot of areas.

I just don’t want to sell ’em ’cause I think long term we’re not really gonna see the growth that you would expect from that property. What’s happening is the fundamentals are moving into the cities, into the major cities. That’s more where our investment focus is and that’s where more your investment focus is, but what that means is that rather than being a north-south divide, I think what you’re gonna start to see is… I think there will certainly be a north-south divide, but I think the other side of it is that there’s going to be a cities and suburbs divide. If you’re looking prediction-wise, give it, you know, maybe 10 years, 20 years, but certainly within a generation, I think we’re gonna start to see the suburbs becoming quite desolate. It’s almost like the Hollywood movies with the tumbleweed rolling down the town that used to have hundreds of people in it. I think that’s gonna start to happen a lot more now.

What you’re gonna find is your rents won’t go up. Your capital values won’t go up. That’s going to be the initial phases of it. As it goes further and further on and it becomes less and less attractive an area, then what you’re gonna see is actually it’s gonna get harder and harder to rent your property out. It might still be fine for owner occupies, but actually, if you’re gonna rent the property out, you’ve gotta be careful. That’ll be the next stage of it. I really don’t think you want to be involved in an area when that hits. Cities, what you’re gonna see is more and more, they’re gonna take over as the place to invest. All right, guys. Have a great day. Live with passion. See ya.

brexit

Property News – Brexit Update

Video Transcription:

Hey guys, so Bretts Property Rants. So, I thought I’d jump into the Brexit thing. I’ve actually had a couple of, break for a couple of weeks on it. Because to be fair there was so much happening and nothing happening at all.

And I think, you know, just having had a couple of weeks break, not looking at anything, not actually reading the news, not even been interested in what’s been going on, just been letting it happen. You know, I was travelling and things like that. It’s interesting because I thought what I’d do is I’d come back, I published my book at the start of April, and what I realize now is that I have no idea what the next move is.

I mean, there’s plenty of ideas, there’s plenty of options. And, you know what? Somebody may win it, somebody may go, yes, that’s what we’re doing, and that may be the thing that happens. But the interesting thing is, there are so many different opinions with various bits of power but no one has a majority. No one has the ability to get one thing though, whatever that is.

And I think that’s gonna be the telling thing. I think, realistically, you know, it’s heading more and more like we could have a no Brexit, because I think the reality is in the absence of us being able to make a decision, we’ll be handing our sovereignty over to the EU, who could say, either, in or out, make a decision. And I think the problem is, the decision on out won’t be able to be made because all the stops, stoppers have been put in place.

And so the default will end up being we stay in. You know, the other alternative is that we keep fighting but the, you know, I mean, ’cause we can always retract the Article 50 and then re-invoke it. I mean, there’s nothing that says we can’t. But, you know, it’s amazing now to think that we’re in a position where no one party can win, nobody has the influence, nobody has the ability to, you know, I mean, there’s just a severe lack of communication.

I mean, I thought maybe May and Corbyn might have come up with something, but you know, the problem is, is that May is the Prime Minister, she’s not the party. And I think a lot of the party, you know, they’re not, they’re not siding with her now. You know, and often times the party whip would bring their party behind a decision that needs to be made. I think their whips probably need to be sacked ’cause they’re, they’re very ineffective right now.

So yeah, so it’s a bit of an interesting situation now. And I’ll keep monitoring it but I think, to be fair, right now there is no clear and definite way to look at it. I think anyone that says that they can and they know and this is what’s gonna happen, you know, I think they’re full of crap. I really don’t see, having spent a couple of hours just going through article after article and reading up on everything’s been going on, there’s no clear way.

You know, and whether the EU force our hand and say, no more extensions, so either in or out, I think that seems to be the most likely one now. I mean maybe May and Corbyn might get together and get the numbers but then, you know, where does that lead us from an internal perspective? I mean, we’re out but we also, once we’re out we need to focus on getting the deals in place and everything in place. And that’s, you know, that’s pretty hard. Without any coordination that’s gonna be a very hard one.

Alright guys, have a great day, live with passion

 

Section 21

Section 21 Why You Can Keep Using It… For Now

So the government announced this reform, of itself it’s nothing dramatic as long as they do a much better job on the Court Reform and the Section 8 strengthening.

The problem we know is that the government is inept at reform so it’s likely to have further negative effects on the market.

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Video Transcription:

Hey, guys. Brett here, Brett’s Property Rants. What I want to do is, I want to just go through the Section 21, the end of Section 21, because the government’s come out and announced that, effectively, Section 21 is going to be no more. Now, importantly, that doesn’t mean now. They still have to go through a whole in processes and so it’s unlikely to happen before … certainly not in 2019, especially with Brexit. 2020 is more likely, but sort of back end, I imagine.

I just think that the government’s going to be so focused on the Brexit stuff that this will become a backdoor issue. But literally, they’ve hardly done any consultation. They’ve already made the decision, even though … It’s almost like to come out and say, “This is what we’re doing,” right after. And actually what they’ve said is that they want to do a further consultation on longer tenancies, and so this is one of the things that they want to do, is actually get the longer tenancies.

So basically, it’s still way long way off. Right now, I think the important thing is, as landlords, and what is going to start to hear more from me now, is we need to get together, and we need to become one voice as an industry, as a body, so we actually get heard. Because I think we’ve got to realize, the government is arrogant, and they think, “Well, there’s no way landlords are going to vote with Labor because Labor’s talking about all these rent controls and restrictions and things like that. So we’ve got them. We don’t need to worry about them. They’ll vote for us.” But I think what we need to start doing is saying, “Uh-uh, you’re not guaranteed. What we will do is disrupt you by voting for a third party or somebody else.”

Because I think they have to understand that what they’re doing is they’re trying to appease tenants, because Labor, they feel Labor’s been taking the tenants away, so, therefore, they’re doing these things to try and get the tenants back on side. Meanwhile, they’re saying, “Stick it to you, landlords.” They’re so arrogant about everything they’ve done, and that’s the thing that really peeves me off. In most businesses, you have a business and this is your income, you can deduct your expenses. If something goes wrong, you’re given a chance to put it right.

All the legislation that’s coming out now, it’s not a question of putting it right. It’s a question of, “Here’s the fine.” And the local councils are going to do it, and here’s … Effectively, what we’ve become is we’ve become the punching bag for the local councils to extort money out of. And make no mistake, most of this stuff is extortion. I mean, the very fact that one of their proposals is that with the tenant fee ban if a tenant is late 14 days, you can’t charge them interest. So basically, tenants can have an interest free loan. It’s ridiculous. Nowhere else are you able to get an interest free loan for 14 days. But, hey, punching bag landlords, that’s what they’re doing.

Anyway, back onto the Section 21. So it’s unlikely to happen straight away. There’ll be some further consultations, and that’s why I’m saying we need to come together as one voice. Really, what this all about … And look, to be fair, the whole Section 21 thing, how this affects us will depend on, number one is, how they strengthen the Section 8 and how they solve the court problems. Because make no mistake, this whole issue is not about Section 21. Section 21 has been one the most effective ways to get a tenant out, because you don’t want to rely on Section 8, as much as you would like to. There are so many times I’ve seen in court now where the judge rules with the tenant and gives them so much leeway at the expense of the landlord.

It’s like there’s no chance of getting that money back, and this is the problem. It’s almost like, “Oh, yeah. Oh, it’s a tenant. Oh, okay. I know you did the wrong thing but have another chance. Go away. Come back in two weeks time or three weeks time or six weeks time.” And then what a tenant starts to do, it starts then, “Oh, I’m sick today, and here’s my doctor’s note. So I can’t turn up. Let’s put it off.” So it’s another time. This is the sort of stuff that’s going on in the courts. Not only that, it takes so long to get. So they need to strengthen this.

One of the things that I’m now looking at is not using the court bailiffs, but actually using the High Court bailiffs. In other words, private institutions to go and get that debt. So when you’re in court, you actually ask to say, “Can you give it to the High Court?” It costs you money. So the other way’s free, there’s an admin fee. This way costs you money, but actually, you get it quicker, because with a High Court bailiff there’s no 14 days warning. It’s, “Right, get out now. We can go round there and execute that possession warrant.” There’s all these sorts of things, the questions around that.

The major thing is, okay, Section 21 goes, fine. Actually, it doesn’t matter. What we need is a way to end the tenancy when there are issues, which is Section 8. The problem with Section 8 is, most people will tell you how things go in court, which is that the tenants get lots of leeways. The problem is, it takes so long to get to court that it costs so much money. This is all about court reform and what they’re going to do there. The problem is, there’s no money in the courts. There’s no money. It’s ridiculous. I mean, it’s so underfunded. One of my best mates, he used to be a barrister in the criminal prosecution service, and it’s amazing how his income went from this down to where he actually got out of the industry voluntarily early, become a university lecturer because there was no money in it. Because the governments were austerity and austerity for like 10 years.

Look, the problem for me is what’s going to happen and what’s going to happen with Section 8. They’re the two keys issues that you need to consider and you need to continue to watch out for. But it’s not happening straight away, so you hear [inaudible 00:05:45] for it. So don’t expect definitive answers right now. Nothing changes. You can still use your Section 21s in the appropriate way. And look, for me, this is another landlord bashing thing is, most landlords don’t misuse it. Most landlords use it correctly and properly and do the right thing. But unfortunately, a small percentage do, and that’s what the shelters and the governments and that are jumping on and using, “Oh, look, this is happening all the time. We need to fix this.” It’s like, rubbish. You’re a bunch of idiots. Anyway. All right, guys, have a great day and live with passion. See you later.

Section 21 Ban

What landlords need to do about Section 21 ban

Not very often do I get mad about things but this has set me off.

Theresa May has gone too far with this. As landlords, we need to band together and become one voice.

Anyway watch the video and I will update you about how we can fight back.

Video Transcription:

Hey guys, Brett’s Property Rants. Today, yeah pissed off. You may have seen the live one that I just did, the video I just did. The Government is just losing it. They’re just a bunch of idiots. They’re talking about removing the Section 21, or the no-fault eviction. Anyway, you could watch the live one about my thoughts on that, which is just that it’s ridiculous.

I think one of the points is I’m just reading through the newspapers here. Of course, now, one of the papers, I won’t say who but is talking about them being short evictions. What a load of crap. Do you know why they’re calling them short evictions? It’s because the bloody courts are so frigging useless, yeah, that you cannot get a tenant out for at least three or four months. It takes so long to go through the whole process from the time they stop paying, or the time they do something majorly wrong where you want to evict them, where they should be evicted, rightfully should be evicted, yeah, it takes so long.

Yes, in that relation, it’s a short eviction. Basically, you got to give them frigging two months then, yeah, it’s a short eviction. You know what? This is absolutely ridiculous. It’s just another layer of ridiculousness by a Government that clearly… I mean I’m amazed they even, well, number one, I’m amazed they had even time to think about this. They’re spending so much time on this ridiculous Brexit and how they’re coping with that, or not coping with that. Anyway, it’s not about Brexit today. It’s about this Section 21.

I mean, really, this is the methodology that you have to use now in a lot of cases to get people out or get to the point where you can instruct people to get rid of them. It’s a lot quicker to do it that way than it is to go through all the other rubbish and the ways they do it. I mean the whole Section 8 process just takes so much time. Now, so many tenants can abuse the system.

I mean we’ve got one tenant, I mentioned before in my other video, 18 months they’ve not been paying, $1800 a month for a place. They’re not even a tenant. They claim to be a tenant, they’re a frigging permitted occupier. Yet, they’ve been allowed to go from one court to the next to the next that has been passing it all the way up to the High Court.

So far, I imagine there’s 40 or £50,000 out of that landlord’s pocket in loss of rent, legal costs, in all these sorts of things. I mean because it’s one of our things, I’ve had to instruct our insurers because of the sheer costs that are involved. It’s ridiculous. This woman even had the audacity to try and get an injunction against us, so that we couldn’t do our jobs. In the end, she got advice, basically got told to pull her head in. Meanwhile, I’m 7,500 out of pocket. That’s the appalling state of the market right now.

Now, Shelter and all these other idiots won’t talk about that side of it, which is what landlords are copping and what agents are copping. I mean to add to it, 170 bits of legislation. You know what? This is appalling, appalling what they’re doing. There is no consideration really for what is rational or what is right. It’s a total knee-jerk. They’re not really asking for opinions. They’re not really interested in that opinion when they’re given. I mean it is just appalling.

My take on it is we need to, as landlords, start banding together and having a voice. Otherwise, people like these Shelter bloody idiots are just going to continue to go on and on and on with all this rubbish. I mean we’re talking about small percentages of landlords that abuse it but, yet, they’re applying it across the whole board. I mean we have over 1200 properties we manage. In that 1200 properties, very rarely… And, in fact, I couldn’t even think of one, and neither the guys from the team, think of one instance where landlords are abusing their situation.

You know what? They want tenants in there. They want to keep tenants in there. Yes, they want to raise the rent because their costs are going up. Yes, they want to do all sort of things they have to do that. We have to raise the rent. I can tell you, I will be the biggest one to raise rents on these tenants. Yeah? Because we need to with all the additional costs, with regulations plus with Section 21’s gone, that means more stuff is going to go to court which is going to take longer. Rent and legal insurance are absolutely going to be needed now, which is another cost. All these things are just adding to it.

It’s appalling, absolutely appalling for what is a small minority. Government isn’t interested. It’s no use even talking to them. What we need to do, as landlords, is band together and have one voice and really stick it to them and tell them that this not appropriate. Anyway, guys, have a great day. Live with passion, and we’ll chat soon. Bye.

 

Property Deposit

Bullsh*t it takes 10.3 years to save a property deposit

I read an article saying it takes 10 years and 3 months to save a deposit as a first home buyer in the UK and I imagine there are the same stories running in other countries as well.

BS…besides the government schemes which help first home buyers the article ignores the power of goal setting. Once you set the goal you watch how quickly you can attract things to you.

So if you’re thinking of saving for a first home, ignore these type of articles probably written by a PR company to get printed.

Go out and get your home…

Video Transcription:

Hey guys, Brett’s Property Rants. Just reading an article about that it’s now going to take ten years and three months for the average first-time buyer to save for a deposit, which I think is absolutely ridiculous. Now let’s look at this. If you do a pure mathematical equation where you say right, this is the average deposit, this is the average wage, how long is it going to take on a straight line method to do that, that’s what it’s going to take. Ten years and three months, it’s like what a load of crap. Fine, mathematics I’m sure works very well, but in reality that’s rubbish.

There are government schemes, there’s help to buy, which means you only need to get five percent together plus some costs. Those costs are limited because of stamp duties and things like that so actually I don’t think it’s anywhere near that. What I mean by that is look yes, if you are just going to follow the mathematics then fine, but you know what? If you set a goal and you do what you need to do to get that goal you can do it a lot quicker than that, so don’t be disheartened by these crappy, stupid, freaking things coming out as if they’re trying to make out how hard it is. It is still relatively easy to get on the property ladder.

Yes you have to be disciplined, yes you have to do some savings and it’s not going to be a three-month thing, but you know what? Ten years, absolute crap, okay, so don’t believe that BS that’s written in the papers. So much is about advertising, it’s not about reality. If you want reality, set the freaking goal and go out and get that house that you want, but what I will say is it may not be the house that you ultimately want to live in, the one that social media says you have.

It’s probably going to be in an area where you’ve got to actually travel to work, where you’ve got to go a bit further out, where you can afford. What I would say is, it’s going to be a lot better for you to get on the ladder quicker and watch the capital grow than to sit around and wait for ten years and miss a whole cycle of the market. That’s ridiculous. Be careful reading this absolute bull crap. All right guys, have a great day, live with passion and get on the ladder as soon as you possibly can because it’s such an important step to everything.

You know, once you get your first property, whether it be an investment or whether it be your home, things settle down, you start to realize, you start to almost be an adult. It’s the biggest step in becoming an adult. So many of my mates, when they’ve got a house all the sudden they’re able to settle down because they’ve now got something of substance and they attract the mates. If you want dating advice, get a house. There are so many things that when you get a property under your name and you work for it, not be given to you. You’ve got to get some discipline, savings, which I totally agree with but ten years is rubbish.

All right guys have a great day. Live with passion. See you later.

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