Where did it all go wrong?

Property investment is not a game for amateurs looking to make a quick buck as some of the news stories have clearly illustrated over the past couple of years.  With the benefit of hindsight, we can assess where people got it right with their strategies and where others got it oh so wrong.  In this article for Just Do Property, Lisa Orme explains 5 of the biggest mistakes she has seen investors make and how to put things right.

http://www.justdoproperty.co.uk/property/wrong-right-2-5960

I found it interesting how she echoes my sentiments about the almost manic obsession some people have with “no money down” deals.  Personally we have always invested with a firm eye on cashflow and most of the deals I see being touted as NMD simply don’t work on this basis because they are too highly geared.

Nationwide report predicts stable house prices for 2012

The latest report from Nationwide, released in December 2011, indicates that UK house prices are continuing to buck the trend of recession.  Houses are now worth 1% more on average than they were at the start of 2011.  Whilst this may seem like a small amount compared to the increases seen between 1997 and 2006 it is remarkably positive news when seen against the background of financial crisis in the euro zone.

Nationwide Chief Economist Robert Gardner said: “The 1% rise in house prices recorded over the past 12 months could hardly be described as a strong performance,but against a backdrop of anaemic economic growth and a deteriorating labour market, UK house prices were surprisingly resilient in 2011.

“Resilience was less evident in other areas of housing market activity in 2011. For example, the number of mortgage approvals remained low, at just over half the long-term average.

Petition prompts energy price reduction.

I received this notification from consumer action group “38 Degrees” this morning.  I think it is an important message so I have copied in its entirety below.

“Over 85,000 of us have signed the petition telling gas and electricity companies to cut their prices – in just 4 days!

And it’s starting to work. Numbers on the petition are sky-rocketing and it’s making the news – have a look at this report covering the petition on Channel 4 news: http://www.channel4.com/news/catch-up/display/playlistref/110112/clipid/110112_EDF_11

In just 4 days, three of the biggest gas and electricity companies have folded under the pressure. EDF Energy, British Gas and Scottish and Southern have all said they’ll cut their gas or electricity prices by around 5%.

It’s not enough, but it’s a start and proves that if enough of us get involved we can win. Three big companies – E.ON, npower and Scottish Power – are still holding out, and those that have dropped prices haven’t gone far enough. The bigger the petition, the bigger the message we send that we’ve had enough of being ripped off.

Can you forward this email to your friends now to ask them to add their names and help send the petition rocketing past 100,000?
https://secure.38degrees.org.uk/stop-the-energy-rip-off

Can you also spread the word on Facebook and Twitter, if you use them? You can tell your friends about the petition easily by clicking the quick links below:

Share on Facebook: http://www.38degrees.org.uk/energy-ripoff-facebook

Share on Twitter: http://www.38degrees.org.uk/energy-ripoff-twitter

When 38 Degrees members have come together before in huge numbers, we’ve won some amazing victories. Last year, half a million of us worked together to force the government to reverse their plans to sell off England’s precious woodlands.

Let’s turn up the heat on the gas and electricity companies now by forwarding this email and asking everyone we know to add their voice: https://secure.38degrees.org.uk/stop-the-energy-rip-off“

Making your money work for you

Making Your Money Work for You
With interest rates at an all time low, financial institutions have been cutting the rates they pay to savers. Check the rates your savings are earning – you may be surprised by how quickly the attractive interest rates used to tempt new investors are reduced.  If you have a significant amount of savings then you may need to consider alternative investment options, such as property, in order to maximise your returns.

Similarly, look at the costs of financial products you buy – insurances, your mortgage etc. It is easy to just let things roll over at the annual renewal but there may well be savings to be made.  Even if you are happy with your current supplier it is worth checking out other deals, as you can use this comparison to ask for an improved quotation.

Check that your utilities are being supplied in the most cost-effective way.  In general terms you will save money by having both gas and electric with the same company and paying by monthly direct debit will also reduce charges.  There are also a number of bundled deals available which can help you make savings on energy as well as broadband and telephone bills.

(Piggy says “The most expensive way to buy your energy is via a card or key meter – typically the charges for these are up to twice as much as for a credit account.  If you have one of these meters then your supplier should be able to change it for you free of charge provided that you do not have any arrears.”)

How to protect your cashflow.

Practical Finance tips for tough times.

Business Link are a free service which offer help and advice to companies across the UK.  They have  published their guide to doing business in tough times; featuring practical ways to tackle the challenges and opportunities of the current climate.

Click here for their top tips for protecting your cashflow.

(Piggy says “Cashflow is king for small businesses of any description but remember that it has as much to do with your expenses as it has to do with your income!”)

Merry Christmas

In the interests of preserving trees and saving the planet I have taken to creating an electronic “Christmas Card” each year.  Best wishes for the season to all of you. Nikki and Jim.

FT reports on a “year of austerity”

The FT has just published a special report of the years financial highlights and lowlights. (Well, mostly lowlights!)  It makes interesting reading, especially with the application of a little hindsight.  Click below to download the report.

FT 2011 in financial news

The best Feed in Tariff in the UK?

What is a Feed-In Tariff?

Feed-In Tariffs (FITs) are a way for people to save money — or make money — by generating their own electricity at home, using technology like solar panels or wind turbines.

Under the FIT scheme, the customer is paid:

• For the electricity they generate and use
• For the electricity they generate but do not use. They sell — or ‘export’ — this electricity to the national grid.

You generate electricity. Your electricity supplier pays you for each unit of electricity you generate and you can use it to power your home. You stay connected to the national grid so that you can buy electricity from your energy supplier in the normal way when you need more power.

Why are the Utility Warehouse claiming that their new Feed-In Tariff is the best?

Quite simply, they will pay their customers more for their electricity than anyone else. Normally FIT customers are paid a set amount determined by the government for each unit of electricity they generate.  UWDC have taken the extraordinary step of announcing that they will pay an extra 2p per unit of electricity on top of the standard rate. That should add up to about £45 a year for an average household — and it’s guaranteed for three years!   You can’t find this deal on their website yet so contact us direct at NSP Resources  if you want to know more.

How to avoid rental property deposit disputes.

Even if you use a letting agent to manage your rental property, when the tenant disputes the deposit it is the landlord who suffers.  Making sure that correct procedures have been followed right from the start of the tenancy and that good records are kept throughout  is essential.

• Go round the property with your new tenant to show them how everything works and to complete an inventory that they fully agree with.  Get them to sign off every page of the inventory and if pictures are taken ensure that they sign a printed copy.  Be comprehensive in your inventory reporting, if everything is detailed correctly and agreed by both you and your tenants, it’s difficult to argue.
• Within a month of your new tenant moving in,  you should pop back to inspect your property and meet with your tenant again. If things look good  then you can agree inspections on a quarterly basis, if you are a little worried keep your inspections up monthly and make your concerns clear to the tenant both verbally and in writing.   Communication is key, most disputes occur because of poor communication!  
• When your tenant gives notice draw their attention to the inventory, any special clauses in the tenancy agreement (such as flea treatments for carpets if they have had pets) and any agreed changes made during their tenancy.  Visit to go through it with them, conduct a last inspection and discuss any concerns.  This gives the tenant time to resolve any issues before they move out. On move out day inspect the property with the tenant, referring to the original inventory.  If there is damage agree what work needs to be done and confirm this in writing.  If possible get the tenant to sign off on the check out inventory too as this makes it difficult to contest.
• Having agreed the work to be done, let your tenant know what the cost could be ASAP (the estimate), in writing. After the work is completed show them the final bill.

If all else fails, all the deposit protection schemes have dispute resolution systems in place and the records you have kept will help to achieve a favourable outcome.

Free invoicing software for small businesses

Sage have come up with a product that is free!!  It is designed especially for start-up and home-based businesses.   Clare Darrell of CygnIT mailed this across to me and  Piggy thought that it might be of interest to some of you, or maybe you know someone who might benefit.

The software is designed for invoicing your customers and chasing up payments simply.

Here it is… free Sage Invoicing software.