Frequently Asked Questions

Listed below are 41 of the most common questions that we get asked. We are sure you may have some of your own also. Please feel free to click on the links below to be taken to s specific question or just scroll down to see them all listed.

If you have any of your own questions please use the contact us box at the bottom and we will come straight back to you.

  1. You are saying that we invest for the long term but I want to make income now?
  2. What happens if house prices don't go up?
  3. What happens if rents don't go up?
  4. Do I have to pay any fees separate to my investment?
  5. Who pays for the valuation, solicitors costs?
  6. How do mortgage arrangement fees get paid?
  7. Who pays for the gas certificates and EPC's?
  8. Who manages the properties in the long term?
  9. What if I want to manage them myself or use someone else?
  10. What if interest rates go sky high?
  11. Where do the properties you recommend come from?
  12. What types of properties do you buy?
  13. What age can I keep remortgaging until?
  14. How do you release the income each year?
  15. Can I invest less than £75,000?
  16. What is the difference between what you invest in and HMO (houses of multiple occupancy)?
  17. What is the maximum amount I can invest?
  18. What income do I need to be able to get mortgages?
  19. What is the exit plan?
  20. Does my £75,000 need to be in cash or can I use equity?
  21. How do I know you will get me good properties?
  22. How do I know the properties  are worth what you say they are?
  23. What happens after ten years? Will you still look after our properties?
  24. How long does it take to get a £40,000 income from a £75,000 investment?
  25. Am I right in thinking it is a totally hands free investment?
  26. How are you different from other investment companies?
  27. Do you buy properties 'down South'?
  28. How long have you been in business?
  29. How can you guarantee to buy houses when you say 98% don't meet the buying criteria?
  30. We want to invest ethically – do you do that?
  31. Where are you located?
  32. Which areas and cities do you invest in?
  33. Can you manage my existing buy to let properties?
  34. Are the properties spread out or are they all in the same area? If I want them all in one area will it take longer to invest?
  35. Is it possible to invest with you on behalf of a limited company?
  36. Will mortgages be arranged in my name (the investors)?
  37. If I am aged 60 will getting mortgages be a problem?
  38. Some people say the economy will flat line in the next 10 years, what is your opinion?
  39. What has been the worst case scenario so far for one of your clients?
  40. Does money for the mortgage come from the rent? I am a lower earner and could not afford to put any more in?
  41. What percentage gets charged by the rental company?

 

1.   You are saying that we invest for the long term but I want to make income now?

 

We have a product that will generate income today and also grow your portfolio. The more you are able to reinvest profits the more quickly your investment grows, but it is possible to have an income of 5% interest and still grow a long term income.

 

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2. What happens if house prices don't go up?

 

If you do not believe that house prices are going to go up – then we would strongly recommend you think about what you choose to invest in. If houses prices were not going to move again then there are better investments.

 

If however, you are asking so you can manage the downside then we understand totally why you are asking. There will be periods when the market is not moving up but history shows us that in those same periods rents go up. As less people are looking to buy, they look to rent, which pushes the rents up. So during these periods you cannot release further funds to buy the next property but you will make more profit on a monthly basis from increased rents.

 

If prices for some reason never went up again your worst case is you can sell the houses you bought and pay off the mortgages and your £75,000 in year one is £87,500+ in equity and cash (a 25% return).

 

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3.   What happens if rents don't go up?

 

If rents are not going up history shows us that it is because more people are buying so the property prices are going up strongly. All the properties that we buy for investors meet our strict cashflow rules so you know that it will cover its costs. In the meantime your asset is increasing in value which is great.

 

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4.   Do I have to pay any fees separate to my investment?

 

No – we allow for a contingency fund to cover all eventualities so you should never need to put any extra money into the investment. The exact contingency fund depends on the amount of properties you have but £3,000 is the minimum we would recommend within your first years. This is part of the £75,000 you invest.

 

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5.   Who pays for the valuation , solicitors costs?

 

You pay these costs as you would with a normal purchase. Again it comes from your investment money and is not separate.

 

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6.   How do mortgage arrangement fees get paid?

 

The lenders add these to the mortgage balance. So they get added to the mortgage balance.

 

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7.   Who pays for the gas certificates and EPC's?

 

As covered in point 5 above these are paid for by the investor. The EPC is £50-£60 and lasts for ten years. The Gas certificate is approx £80.

 

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8.   Who manages the properties in the long term?

 

Rental Insight manages the properties for you. They manage Aran's properties for him and manage yours in exactly the same way. You can choose to manage the properties yourself or have them managed by whomever you like. All our investors use Rental Insight currently

 

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9.  What if I want to manage them myself or use someone else?

 

You are able to manage them yourselves if you wish and similarly you can move the agent that manages them if you wish. Rental Insight is excellent at what they do and this is why we manage it all in house with them. But this is a choice you can make.

 

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10.  What if interest rates go sky high?

 

We test every property we buy at a rate of 8% to make sure it will still be cash flow neutral at that point. This protects the investment for rate rises.

 

All illustrations we show you have been worked out based on interest rates worked out by looking at the best five year fixed deals available. These are a great indication of where the banks expect rates to be over the five year period.

 

Ultimately if rates went above 8% then you would be using up contingency monies to keep the properties. We would need to review and check we thought it was a short term thing for property investing to still be a good idea and otherwise we would recommend you sell the properties.

 

Everyone remembers the very high rates from the 70/80's but if you look at the facts they were not high for long. In some instances for only a few days!

 

The key is we have provided protection in our modelling.

 

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11.Where do the properties you recommend come from?

 

We have a whole host of ways of finding excellent investment property.

 

An excellent property has to meet all our key rules and come with an average  20% discount promised to you as investors.

 

Through the mechanisms that we have in place we have over 150 properties per week that get offered to us, with the correct discounts, but not necessarily meeting our rules. These are offered by outside companies and individuals and our network has over eighty such providers in it.

 

On top of that we do our own marketing to find the right properties.

 

We agree to buy only one from every sixty properties that we are shown despite the big discounts offered as investing is about many rules, not just getting a cheaper property.

 

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12 . What types of properties do you buy?

 

Typical investment will be three or four bedroom town centre terraced or ex local authority properties. The key to good lettings is having good demand to rent a property. And this type of property is normally strong for this purpose.

 

We do not buy new build properties for two reasons:

 

The lenders do not really like lending on them due to historic problems from the crunch in 2008, so you have to put larger deposits down. If a developer sells all their stock to investors you then have a lot of properties all in the same place all up to rent. Leading to you being able to get reduced rents.

 

We do not recommend flats/apartments as the tenants you get are transient. They stay in the properties for a lot less time leading to more cost for you for finding new tenants, redecoration etc. You really want to target long term tenants in your properties.

 

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13. What age can I keep remortgaging until?

 

At the current time you can get a buy to let mortgage until you are 90 years old. The mortgage is based on the rental income you can obtain rather than your own income.

 

For those people planning to live past 90 we then have other strategies that involve commercial lending to take you on and past this age.

 

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14. How do you release the income each year?

 

Our two videos on the website cover "how professionals take their profits from property" and the "tax efficiencies" of this method. Please watch these to answer this question.

 

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15. Can I invest less than £75,000?

 

Our minimum investment amount is £35,000. We would only recommend it if at some stage in the future you will be able to invest the full £75,000, but you can start with this figure.

 

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16.What is the difference between what you invest in and HMO (houses of multiple occupancy)?

 

A HMO will create more cash-flow on a month on month basis as you have more tenants in the same property. However as there are more tenants it will also generate more work.

 

Crucially there can also be more damage so the contingency fund needed for a typical HMO would be around £10,000-£15,000 which ties up a lot of your capital.

 

We may use smaller HMO strategies with a couple of properties we rent for you to maximise rents, but we do not buy properties that have 4/5 individuals in them for our investors. Our product is designed to be hands off and also stress free. These properties create a lot more work.

 

If someone wants to manage things themselves to get the extra profits then we advise them to be incredibly careful in their investment – although good returns can be made with close management.

 

E.g. Aran has five HMO properties but employs a caretaker and his business partner spends 20 hours a week on them.

 

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17. What is the maximum amount I can invest?

 

We have no maximum amount although different investors always like to explore different things. Our investors who invest £500,000+ normally work more directly with Aran and will build a portfolio that is a mixture of the products we have to spread risk and get a variety of outcomes – but that all depends on each investor and what their goals are.

 

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18. What income do I need to be able to get mortgages?

 

As most of the buy to let lenders judge their lending mainly on the rental returns they believe a property will get then it is possible to get mortgages for buy to let with no personal income.

 

As you move up the brackets to earning £10,000, £25,000 and then £35,000 more mortgages become available.

 

There are three or four lenders who can move incredibly quickly as we need them to so we normally use them for the original purchases and then the whole market is used for remortgages in the years to come.

 

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19. What is the exit plan?

 

With our strategy we never recommend selling the properties. See the "tax efficiency" video for the reasons why on this and also "how the professionals take their profits from property". However the properties are owned in your name and are yours so you can sell them whenever you wish.

 

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20. Does my £75,000 need to be in cash or can I use equity?

 

Many of our investors release equity from their home or other investment properties to raise the money to invest. We can show you how to make sure this money is paid back off wherever you have borrowed it from in the early years or later years depending on which is preferred. So it can be cash but it can be equity that is released.

 

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21. How do I know you will get me good properties?

 

As covered in questions 11 and 12 we are very strict with the properties we buy. We share upfront our key rules and what we believe makes a good investment and we never recommend a property unless it ticks all those boxes.

 

We benefit when you are able to release funds and buy the next properties. Our profit comes from the long term relationship and with each extra property you buy – so it is in our interests that you purchase more property. Getting the right properties enables us to do this.

 

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22. How do I know the properties  are worth what you say they are?

 

Once we believe we have found a good property to recommend to an investor we make sure we check our estimations. We do this by instructing a RICS qualified surveyor to the property. They are sent without knowing any figures at all for the property. In effect a blank sheet of paper.

 

So they come back with a true valuation from what they believe from the market.

 

If that figure is less than ours then the discount that you need to get is 20+% from their figure, thus meaning you get 20+% off whichever is the lower – their figure or our figure.

 

We are happy for you to choose the independent surveyor if you wish to. We use companies like countrywide surveyors and Hunters who are big well known companies for surveying.

 

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23. What happens after twelve years? Will you still look after our properties?

 

Our guarantee is to look after you for twelve years. However, the same rental business that manages Aran's properties manages everyone else's. Aran's properties will be kept forever and be passed onto his children so the need for the rental agency will always be there. It is a business in its own right. So it will still be there to manage your investments going forward.

 

Property Insight aims to be around for years and years and is planning on that basis. So it should be here for many, many years.

 

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24. How long does it take to get a £40,000 income from a £75,000 investment?

 

Based on modest projections of 4.5% growth over the next ten years a £75,000 investment would turn into £40,000 per annum for life after twelve years. If the market grew more slowly it would take a little longer, if it grew more quickly it will be more quickly. Properties have doubled every ten years for the last fifty years, so we feel very comfortable that although we are in a bad place at the moment, that 5% average will be achieved over the next twelve years. This is half of the national average over the last eighty years.

 

If you don't believe this will happen we strongly recommend you think carefully about whether property is the right investment for you.

 

Lastly remember that we grow your investment 25% in the first year in terms of equity and cash. So even if the housing market does not go up you have 25% growth on your money.

 

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25. Am I right in thinking it is a totally hands free investment?

 

The product we have designed has been designed with that in mind. An investor can be as involved as they like with an investment. So they can be involved in the refurbishment. They can do the rental side if they wish. However just about all our clients leave us to do everything after checking and getting trust in what we do?

 

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26. How are you different from other investment companies?

 

There are lots of ways we are different but the main ones would be:

 

We practice what we preach. So we buy exactly the same types of properties that Aran has and buys. In exactly the same way and to exactly the same rules. We manage every stage of the process. Lots of companies for example will sell you a 'discounted property deal' but they won't have done the rental checks for you, they won't rent it for you, they won't manage the whole process, they won't have stress tested the purchase

 

We lock in profit from day one by buying with discounts. When we project forward we use conservative projections of 5% growth We really get to know our clients – they have a dedicated point of contact that manages everything from us buying the properties, sorting the mortgages, refurbishing them and letting them, right through to the long term of the next twele years. All from the same point of contact. The guarantees we offer – 25% growth by the third property, property rented within 8 weeks, that we look at sixty deals already 20% discounted to pick one property.

 

We are also by far the best from a value for money point of view. Make sure you ask to clearly see all charges when you are working with anyone else.

 

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27 Do you buy properties 'down South'?

 

When our clients invest with £75,000 we want to minimise the risk to them and also get the best investments. With this in mind we develop three properties valued between £70,000-£120,000 with the £70,000, rather than buy a more expensive property and use the whole £75,000 as a singular deposit.

 

We strongly recommend this as if you have a problem with one property (voids, damage, bad tenant) it affects all your cash-flow if you only have one property. However if you have three it affects you a lot less.

 

So we don't often buy in the South as the property values are too high to get the spread we recommend to people.

 

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28. How long have you been in business?

 

Aran has been investing in property for 18 years and has been providing buy to let mortgage finance for over 15 years.

 

We have helped in the purchase of over 1000 properties including our own, our clients and investors.

 

Property Insight was born in 2009 when Aran was no longer able to purchase properties in his own name, but had lots of sources of superb, discounted property. The credit crunch had meant that lenders limited the amount of finance each individual could get so the lenders would not lend the amounts Aran wanted to keep growing his portfolio (e.g. Birmingham Midshires only allow three mortgages per person now. Aran has fifteen with them).

 

However all the roles that Property Insight does for its clients Aran has been doing for his own portfolio and others since 2001.

 

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29. How can you guarantee to buy houses when you say 98% don't meet the buying criteria?

 

Your money is held in your own bank account – so the worst case if we cant get you properties is you buy some from somewhere else. You will not have lost anything.

 

We will only work with 200 clients in total (we currently have just over a hundred) as we know what levels of property we can commit to sourcing both now and in the future.

 

It is true that we turn down 98% of properties shown to us (that are already 20%+ discounts) but this way our clients know that we are sticking to our strict purchasing rules. We have to manage these properties for another ten years and the last thing we want is to buy you a property that is hard to let and then we are having to manage it and "unhappy you" for the next ten years!

 

We are comfortably sourcing the right level of property for our investors currently.

 

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30. We want to invest ethically – do you do that?

 

If you have been around any of our educational videos or around Simon Zutshi and the way he teaches property investing, you will understand that there is no need whatsoever in property to do things in an unethical manner.

 

There are plenty of great deals out there to make us all good money and also please the vendor.

 

Therefore we 100% always work in an ethical manner with the vendors to help achieve win:wins.

 

In terms of the tenants we look to house. The property is their home and is respected in that way. As long as they are good tenants, paying  the rent in a timely manner and looking after the property then we will leave them to enjoy the property and its use. 50% of our tenants are 'lifers'. A 'lifer' is someone who has said they want to stay in the property for life. This saves a fortune in costs of changing tenants and even costs of little jobs. So being ethical, responding to issues immediately and treating people with respect lead to good business too!

 

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31. Where are you located?

 

Our head office is in Scarborough, North Yorkshire. However our team work across the UK. We work with different IFA's and business coaches in many towns and our own team have clients across the country and even abroad.

 

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32. Which areas and cities do you invest in?

 

We buy properties valued between £70,000 and £120,000 in the main. Therefore the cities that we buy in are regulated by that factor. We need to be able to find excellent investment properties that fit our rules where they can be bought for these values.

 

We also will not buy property in an area where we don't have full maintenance coverage (there are ten key tradesmen you need to be able to get quickly in any area) and also full letting coverage so our team can be sure to rent the property quickly and manage it well.

 

We have good coverage and generally buy from Newcastle down to the Midlands and Hull across to Liverpool.

 

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33. Can you manage my existing buy to let properties?

 

If you have buy to lets that you already own and would like us to manage it all under one roof then we can definitely help. We would explore with you what properties they were, where they were, and the types of tenants and then would give you our honest view. For example we are not experts at student lets so would not recommend you giving those to us.

 

In most instances when we have taken over a portfolio from other landlords we have been able to increase the rent they get and help cover our cost!

 

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34. Are the properties spread out or are they all in the same area? If I want them all in one area will it take longer to invest?

 

Once we have started investing for a client we normally buy the properties in that portfolio in the same area. Some clients want this and others don't mind where they are. We will work with you to your specifications. If you are really specific then it can take longer to invest. But if you are happy with a region (e.g. South Yorkshire) then that is totally fine.

 

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35. Is it possible to invest with you on behalf of a limited company?

 

We do have clients that invest through their limited companies. So yes it is possible. The problems you will find are that the mortgage finance available to limited companies is far less than to an individual so it makes the financing a lot more difficult. Further if you use the long term strategy of releasing money from mortgages as income. The problem is that money is still in the Ltd company so then you have to pay tax to get it out.

 

Its better to invest the money than just leave it sat there – but if you can invest in your own name I recommend that.

 

Ultimately your accountant is the best person to advise you on this.

 

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36. Will mortgages be arranged in my name (the investors)?

 

Yes the mortgages will be in your name and the property owned in your name

 

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37. If I am aged 60 will getting mortgages be a problem?

 

Buy to let mortgage providers are comfortable that the rent covers the mortgage. So the majority allow lending to 85 or 90 years of age.

 

If you live beyond that age then commercial lending comes into play and 70% loan to value lending.

 

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38. Some people say the economy will flat line in the next 10 years, what is your opinion?

 

If you believe that property will do this then I would strongly advise you not to invest in property.

 

The economy is in a real mess and will take a long time to sort out. However so many factors are pointing towards property prices rising again. We don't have a crystal ball so you have to decide for yourself but the following are key points:

 

The UK population is constantly increasing and no more land can be built! So this puts pressure on housing price – demand. According to government figures we have 1,000,000 less houses than are needed and this number is increasing every year as builders are building around 100,000 less new houses than are needed. We have in effect had seven years of built up frustration and people not moving (2005-2012). People want to get moving as a society we often measure our wealth in our equity – so society want prices to rise. The average number of people living in each house is getting less due to divorce and people staying single longer. This means more houses needed. Government forecasts (which can often be wrong) say flat 2012-2013, 2.7% growth 2013-2014, then 4.5% growth thereafter.

 

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39. What has been the worst case scenario so far for one of your clients?

 

One of our clients had a property that got trashed by vandals. Then whilst waiting to be repaired the stop tap burst and there was very bad leaking.

 

Insurance covered the majority – so the house now has new bathroom, new kitchen, new carpets and decoration throughout, new heating system. Maintenance costs will be a lot less in the future.

 

This cost around £1000 of that client's contingency. We managed everything on their behalf so it was all managed and no hassle.

 

This is worst case so far!

 

We have had a property used as a cannabis farm, people die in the properties, two strangers fall out and gangs smash each house up (and we owned both, by chance, so both ours got trashed), two arson attacks, a man loses his mind, climbs on the roof and throws roof tiles at passers by, murderers living in or hiding in our houses etc.

 

But all this has been managed well and with the right protection in place it is covered for you. The question I always ask is whether you would want to deal with these problems or would rather have us manage them!

 

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40. Does money for the mortgage come from the rent? I am a lower earner and could not afford to put any more in?

 

We always leave an element of your investment as contingency fund. So anywhere between £3,000-£10,000 is always held in your rental bank account.

 

This means if you have problems with tenants, void periods, damage etc you always have contingency to fall back on. Thus you should never need to add to your investment.

 

The rent does indeed cover the mortgage. It also covers the maintenance cost, rental agency and insurance costs and must leave at least £50 per month of profit after all that – or we will not recommend the property to you.

 

They normally pay more than this but this is the minimum.

 

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41. What percentage gets charged by the rental company?

 

Our rental company is called rental insight and the charges for our clients are 10%+VAT.

 

To re-let a property is a flat fee of £350+VAT

 

This compares in our areas to an average cost of 10%+VAT.

 

 

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