Future Planning and Its Importance in Property Purchase

House purchase involves a lot of planning and you need to start preparing well ahead of time. Our aim here will be to provide you an insight into various aspects you need to look into. We will also go through some of the important factors you must take into consideration while searching for a home.

House Purchase and Importance of Planning Ahead of Time

Start Saving Early: It is better to start saving early to have required funds for the down payment otherwise you may fall short of the required amount. In such situation you will have no option but to opt for a home loan which is more than 80% of home’s value. Thus it is necessary to start saving a few years ahead of the house purchase.

Emergency Funds: It is common for sundry expenditures to surface while you are moving into your new property. As for example, you will have to pay for utility fees, refreshments for people assisting you in the move and several other similar things which can make a large dent in your savings.

Thus you will have to create an emergency fund few months before the actual move so that you can pay for these miscellaneous expenses.

Evaluate the Property Carefully: You need to thoroughly go through the property during the house inspection along with your home inspector. It is also necessary to have a checklist of things you want to go through at the time of home inspection.

It would be important to spend more time in the house and check all the appliances to make sure everything is working as required. Like for example, there could be some problem with the water heater where it starts to percolate after running for about 15 minutes.

Thus during the property inspection you will have to let the heater run for 15-20 minutes to see if there is any problem or not. In case you rush then you will only come to know about the problem when you start using it on daily basis. If traced at the time of home inspection you may well ask the seller to fix it.

Ask Someone Else to Look at the House: It will be worth asking your friends to have a look at the property along with you since they may notice something which you are not able to spot. A friend who has recently purchased a property will be a great choice since he would know about the caveats to look out for.

Shop for a Home Loan: Apart from banks you can also approach credit unions for your home loan. Credit unions may well provide you the loan for lesser rate. Let us say you get half a point less from credit union as compared to what banks are offering.

In such situation you would be saving about 23k on a loan of 200k over a period of thirty years. Thus over time it will provide you considerable saving.

As a final note we will say that house purchase is not something you think of today and finalize tomorrow. You need to start planning at least a couple of years ahead and cover all aspects to get the house you want.

The Need for Getting Free Property Valuation Service

A property valuation report is a report that shows the price rate of a particular property. Price rate of a property can also be called as the market price of the property. It is determined by a property evaluator from a reputed property valuation company. Every property valuation company offer various services. It can be found that certain companies offer you some more information rather than the valuation report alone. This will provide you with a lot of other details that one must follow during buying or selling of property. Free Property Valuation service from valuation companies includes basic guidelines that will help us in interpreting the information.

What you receive with Property Valuation Report

• List of registered proprietors or owners
• A description of property as per the laws which includes the structure of the land
• Zoning or Resource management
• Valuation includes the market rate of the property

Region

In the region section, the evaluator will be putting in the complete details of the area of the property as well as the demographic description. It also consists of all the facilities and features that will be found in the area as well as its neighbourhood.

Basic details and completed description of the property

This is a section in the valuation report where you will find the details of the property that provides a detail of the residential market value and the commercial market value. Other factors that do not affect the final price are ignored altogether.

A detailed description of the improvements

Description about the improvements in the property valuation report is something that is considered as a very important part in the report. When there is a chance of improvement in the property, there is a large chance for the increase in its value. This is the reason why such details are described in the valuation report in a detailed manner.

The methods used in property valuation

The main methods used in the evaluation of the value of property are:

• Sales approach
• Income appreciation approach
• Depreciated replacement cost

Getting the right information of the neighbourhood

When we want to know the right market value of our plot or property, it is natural to compare it with the neighbouring property. It is thus a fact that one of the major methods used during property valuation deals is a sales comparison approach. Hence it is very important to check the rates of the properties that are similar, and those that are found in the neighbourhood. When an evaluation is made, you need to give the evaluator the details of the rate of property in neighbourhood, property value and sales price (if it has been sold), price of property and other details so as to get yourself a proper valuation result of your property.

Ten Reasons Why Property Proposals Need Permission

1. Lenders Permission To Rent A Buy to Let Property. – Inherently this includes permission to rent – or does it?

a. Even this type of mortgage will exclude certain tenancies.

b. E.g. it is likely that a landlord’s family-members are excluded from occupation.

c. Certain tenant genres may also be excluded such as knowingly letting to benefit recipients.

d. Therefore, it is important to always establish whether there is either implied or actual permission.

e. A former landlord-home will probably require lender-permission to rent.

f. Lenders are likely to require any tenancy to be an AST and contra wise may exclude common law and commercial tenancies.

g. Lenders’ permission to allow alterations and extensions: probably requires lender consent to build a property extension.

h. Some lenders restrict the number of tenants to say four tenants.

i. So if you extend your four-bed apartment to five bedrooms, your lender might contend that your mortgage product does not permit renting to five tenants.

j. In such circumstances the borrower must do one of three things:

i. Swap mortgage products to enable an additional tenant. However, such a swap is likely to come with a lower loan-to-value and a higher interest rate.

ii. Switch mortgage lenders. This may not be as easy as it sounds in a depressed market.

iii. The only remaining option might be to do nothing. Certainly do not waste money renovating if this will breach the terms of the mortgage agreement.

k. Lenders might require confirmation that borrowers have appropriate permissions before in turn permitting renovations

l. Lenders might demand that a damp basement must be ‘tanked’ within say three months of granting a mortgage, meantime withholding a retention. But if the property is a listed building the local authority may not permit it. So unwittingly, conflicts can arise for the unwary.

2. Building Control Approval – Permission is likely required prior to conducting structural alterations.

a. Any structural alterations, even replacing a bathroom may require ‘Part-P’ permission to fit an electric shower unit. Likewise other ‘wet’or ‘notifiable locations’.

3. Planning Permission – This may be required if it is outside ‘Permitted Development’, e.g. a large extension requires permission, whereas say a small porch will not – unless it is a listed building or in a conservation area when normal permitted development requires written permission anyway). After 4 to 10 years following unpermitted works, any required permission is deemed granted and no longer an offence.

a. If the Property is a ‘Listed Building’, ‘Planning Permission’ is required.

b. If the property is in a ‘Conservation Area’ yet again Planning Permission is required to lop. top or fell a tree.

c. A house in an area designated as covered by Article 4 requires planning permission under the Town and Country Planning Acts and Orders.

4. Ex Local Authority Homes – If the property was formerly owned by a local authority then there is likely to be a restrictive covenant in the deeds preventing alterations to the external appearance – without the local Council Estates Department’s permission. So even if a small porch would e within permitted development permission may still be required.

5. Mandatory Licensable Property – A property is in England or Wales and comprising three or more storeys and 5 or more unrelated tenants is classed as a large HMO and as such requires LA approval to be let as a Mandatory Licensed Property.

6. Discretionary Licensable Properties – This also require permission to let and this covers Additional and Selective Licensing. See previous articles by the author on this topic.

7. Sui Generis – A property is in England or Wales and comprising seven or more unrelated tenants is classed as a large HMO and is in also a category of its own called ‘Sui Generis’. As such this requires LA approval to rent regardless of the number of storeys.

8. An Empty Property pending letting also requires permission from any home insurer if vacant longer than a set period – normally 30 days.

9. A Landlord’s or Owner’s Permission is required to do anything stipulated within a tenancy agreement which requires the landlord’s permission: permitting pets, subletting as an inferior landlord and or tenant, changing colour / decor, etc. Similarly, proposed works at or near a neighbouring property-boundary (vertical – walls, or horizontal floors and ceilings if flats) will require notice and Party Wall Act (1996) consent or arbitration with any adjacent owner.

10. Permission to Act subject to Declaring Personal Interests. Failure to declare a personal interest can result in a breach of Consumer Protection Regulations. If there is a presumption of a personal interest this can create a conflict of interest. Once the personal interest is declared to the other party and that party agrees, or permits the act, then there is no conflict. E.g a landlord must be told that a letting agent or staff member is related to the new tenant or to a service provider to avoid a presumption of impropriety. The tenant might only be paying half the true value of the rent or the contractor may not be competitive both to the detriment of the landlord. Once informed the landlord is likely to scrutinise such a deal to ensure correctness before granting permission to rent to the relative or agree to works by a relative.

Duties Involved in Apartment Property Management

Many apartment buildings are managed by a designated manager, who is responsible for the day-to-day running of the apartment and is often the first port of call should you happen to be experiencing an issue of some description.

However, their job descriptions extends far beyond simply handling the tenants of the building. The following are just a few of the tasks that an apartment property manager will be required to handle.

Mediation

It is not uncommon for disputes to arise between different members of the apartment complex and it often falls down to the apartment manager to mediate the discussions and attempt to find a resolution that is suitable for everyone.

In some cases this may be fairly simple, such as when one tenant is being too noisy and thus disturbing the peace. However, other disputes can be much more complication so the manager must know how to handle such issues peacefully and to the benefit of both the building and its tenants.

Maintenance

The apartment manager is directly responsible for any maintenance issues in the building. While the work itself may be carried out by a janitor or other contractors, it is the manager that has the responsibility to ensure that everything is running as it should be. They will also need to be able to determine if any reported issues can be handled internally, or if somebody needs to be called in to help.

As such, they must make themselves available to the tenants so that they can report any issues, in addition to maintaining relationships with contractors and other personnel who will be able to come out and rectify the issue at a reasonable price.

Collecting Rent

In most cases the rent payments are made directly to the building’s owners or through an agent acting on their behalf. However, if a payment is overdue for whatever reason it will often be the building’s manager that needs to speak to the tenant in question and arrange for the payment to be made.

Much like with mediation, this often requires a delicate touch. However, the apartment manager must also have the authority to act if the tenant is refusing to pay and must also know how to best make use of this power to ensure that they get what they need from the tenant without disrupting the lives of other occupants of the building.

Signing Leases

In some cases, though not all, the apartment manager will also be responsible for signing leases and showing prospective tenants around the building. This means that they need to know their building inside and out so that they can ensure they provide accurate information while also keeping the best interests of the building owners in mind.

>A solid mind for marketing helps here, as it can be used to accentuate the positives of the building while downplaying some of the negatives. In short, they will need to be able to sell the building to the tenant and convince them that it is a place that is worthy of being called their home.