Full
Article:January 2005 - some thoughts from the editor of
LandlordZONE™ ...
We are starting the New Year off with a new look
LandlordZONE™ - hope you like it?
The site has been undergoing major re-design work
for around 4 months now and there's still a lot of
up-dating and new content work to be done -
maintaining a large site like this is a never ending
task.
We have tried to maintain an easy navigation system
with a more logical structure incorporating "ZONEs" of
related subject matter, and more organised advertising
logos. The site falls into 4 basic categories:
- Information - an encyclopaedic resource
for landlords and others involved in property
- News, features and press releases
- A very comprehensive products Directory,
and
- A marketing and PR service for associates and
sponsors through site Advertising.
In addition we are entering the world of Blogging!
or "Web-Logging" to be more precise. The LandlordZONE
web-log will be known as "LandlordLOG" and will be
reached at www.LandlordLOG.com
www.LandlordLOG.co.uk and also
www.LandlordZONE.co.uk/blog or simply click on the
"WebLog" link, top left above.
Also, the stories on the LandlordZONE™ web-log and
some key ones from the web site will be fed to a RSS
(Rich Site Summary) news-feed -
www.landlordzone.co.uk/rss/feed.rss
By using one of the new news-feed readers / news
aggregators (we recommend Bradsoft's
www.feeddemon.com
- though there are some free ones you can download)
you can pick-up rental property news related features
automatically as they are produced. Registering with
the LandlordZONE™ News Channel is as simple as
entering the above URL in your news reader's new
channel wizard.
What about the investment and landlording scene?
As we enter a new year maybe now is the time to
reflect - to look back on the property scene through 2004, and
look forward and reflect on what the pundits are saying is to come in 2005
and beyond.
Looking back we can see that 2004 has, on the
whole, been a yet another good year for property investors and
for landlords.
The first half of the year continued with the
frenetic property boom of the first decade of the 21st
Century seeing double digit property price inflation, whilst
the second half started a slowdown which many now feel
heralds a long period of stagnation in property
prices, lasting perhaps 5 years or so. But all the
signs are that the housing market is set to avert a
major crisis or crash.
In fact, the outlook looks quite bright for
buy-to-let landlords because price falls often result
in rent increases, as more people opt for renting,
either until prices fall further, or until they can afford
to enter the housing market for the first time.
Some highly credible forecasters are predicting
between 300,000 and 500,000 more properties being
added to the private rented sector (PRS) over the next 10
years or so, as socio-economic factors converge to make
renting more appealing and indeed, necessary. Add to this the
ability of the average investor to "wrap-up" residential
property into a pension scheme from April 2006
(treasury promises permitting?), with government
tax saving schemes such as property investment funds (PIFs and SIPPs) and one can
see why property investment optimism still has some
way yet to go.
The UK economy has continued its long-run
(14 years or 50 successive quarters) of economic
growth, high employment levels, and high consumer spending
and borrowing. But with an election looming there's a
strong incentive for government to maintain the status
quo - to keep on spending and borrowing for itself. It's
what happens after the election that worries many, as
the government spending debts have to be re-paid and the taxes have to rise.
It was never thus: let's face it, it's an exception when you can
make money from property when you are geared as highly
as 85% and more. This just can't last and the old statistical
maxim - regression to the mean - always applies. What
goes up, must come down.
The last few years of high property price inflation
are over: this has been an exceptional period and one
of great opportunity for many - it's always easy to
spot opportunities with hindsight - but for a time
it's almost been impossible to lose money investing in
property, and it's not all
over yet! Low inflation, steady growth and low
interest rates fuelled a property boom the likes of
which many of us may not see again in our lifetimes.
Long-term, investment value is based on income and
cash-flow. No matter how much investors may lose sight
of this in the short-term, success in property
investment comes down to good management and good
landlording.
No matter what some of the property investment
trainers and expensive seminars may advocate, becoming
an overnight property millionaire without property
management hassle is for the lucky and those few who
are prepared to take high risks - the ones who got on
the bandwagon before others saw it coming, or those
lucky enough to be in the right place at the right
time.
There's money to be made in property, there always
has been and there always will be, but it's a business
not a "sit-back" money-making machine. Buying value:
buying in the right place, at the right time and for
the right price, and then managing your assets well
are the keys to success as the market softens. These
principles apply equally to foreign property
investments as they do to the home market, but perhaps
even more so.
As it gets tougher to make profits (and to make
ends meet if you are highly geared), keeping costs
under control will be crucial: self-management is one
way to do this. I'm not advocating that everyone can
be a hands on landlord, but if you are lucky enough to
live near your investments, you are willing to do your
homework, you have reasonable people management skills
and, as a bonus, you have DIY skills, then you can
save serious amounts of money.
Commercial property has continued to outperform
throughout 2004 and this trend looks likely to
continue. It's been the best performing asset class
over the last 15 years when you take the more recent
collapse of equities into account.
Commercial property funds are currently looking
very favourable for investment opportunities and
direct investment in the market is a distinct
possibility for many. Beware though, because
traditionally commercial property has been the realm
of the professionals and requires more specialist
knowledge. In addition, prices are currently very
high, with many properties making well above reserve
prices at auction - it's so easy to get carried away
and overpay.
2004 has been an eventful year as far as rental
property
legislation changes go, and the regulation scene
looks just as hectic for the future: the passing of
the Housing Bill into law in November (The Housing Act
2004) was a major piece of new legislation with some
far reaching implications for landlords, and be
warned: there's more to come.
On the commercial property side, changes to the
Landlord & Tenant Act 1954 introduced in June brought
about -major reforms to lease renewals procedures, and the
final legislation affecting disabled access (DDA 1995)
came into force in October, to name but a few - see Legal
Briefing
Those of you who are interested in investment
generally (and these principles apply equally well to
property) may like to look-up a couple of books I've
been reading over the Christmas break, both of which I
can highly recommend - see below. The first of these
was recommended by Warren Buffet at his 2004 AGM and
the second one I came across by accident.
Good luck investing and landlording in 2005 and
best wishes to all our LandlordZONE™
site visitors, advertisers and sponsors.
Finally, all you property tycoons - spare a thought for all those suffering in
the quake crisis in Asia and also the less fortunate
at home - if you possibly can, please
make a donation.
Tom, Site Editor ©
LandlordZONE 2006 |
