The U.K. real estate market has attracted many foreign investors from different parts of the world for many years. This is because the real estate market has been stable for many years and properties are readily available in this country. This is actually one of the reasons why the U.K. has the biggest number of foreign real estate investors globally. However, real estate investing is now under threat due to various unexpected factors that have recently hit the market. For instance, the decision of the U.K. to leave the EU and the introduction of stamp duty to buy-to-let properties are some of the major factors that might destabilize the real estate market. In the first quarter of 2016, housing prices in the U.K. rose by about 5.6 percent. The highest housing price increase was witnessed in the Outer Metropolitan Area around London.
The danger ahead for U.K. real estate investing
Any real estate investor buying property to let in the U.K. is expected to pay a 3 percent increase in Stamp duty top of the already existing Stamp Duty rates. This means that it has become more expensive for real estate investors planning to buy real estate in the U.K that in the past, which is a major blow to the U.K. real estate market. Additionally, the increase of real estate stamp duty may destabilize the country’s real estate market because most of the top-end properties in London are owned by foreigners who may not be happy to be put under scrutiny.
The large-scale extension of the right- to buy at highly discounted prices planned by the government is going to affect the real estate market in the U.K. The government move to introduce cheaper housing in a market where housing prices are declining in some parts of the country is going to affect real estate investors buying property to let. The exit of the U.K. from the EU is another factor that is going to affect the U.K. real estate market greatly, bearing in mind that immigration and population growth are very important factors in as far as real estate market growth in the U.K. is concerned.
Three major threats to the U.K. real estate market
The introduction of the new stamp duty on real estate
The U.K. government has introduced a new stamp duty on buy-to- let real estate properties in the country from April 2016. Consequently, this has increased the real estate transactions greatly. The introduction of more Stamp duty on real estate properties is going to discourage people from investing in the country’s real estate market. Properties in the country are going to be expensive and foreign investors will opt for properties in other countries. It is also worth noting that from April 2019, landlords will be required to pay Capital Gains Tax within 30 days after selling their properties and not at the end of the current tax year as it is now. This is another blow to country’s real estate market because the rules are becoming tougher for real estate investors.
The anti-money laundering moves and the Panama Papers issues
If you are not aware, the Panama Papers leak of April 2016 had a great impact on the U.K. real estate market. The leak suggested that most of the money coming from the Panama money laundering activities was used for investment in the London’s real estate market. The requirement by the government that foreign investors who own properties in London declare their assets publicly is likely to affect the real estate market in the country. Foreign investors in the country are likely to sell their properties to avoid being exposed. It is also going to be difficult for foreign real estate investors planning buy properties in London, especially those with questionable sources of income.
The right- to- buy extension by the government
Another major factor that is likely to affect the U.K. real estate market is the move by the U.K. government to extend Right- to- Buy discounts to 1.3 million housing association tenants. This is a blow to the already declining real estate market because many tenants will become property owners and investors owning rental properties will be greatly hit. It is a positive move by the government to help people own homes, but the move is likely to destabilize the real estate market in the country.
Denver property management companies can be the difference between whether your real estate investment runs profitably or at a loss, depending on the company you decide to work with.For those who may not be aware, property management in Denver is a very profitable business that has attracted many stakeholders locally and from outside Denver. The bad part is that not all Denver property management companies are reliable. There are those with a good reputation for helping their clients to maximize returns from their investment and the lower quality ones that lack proper skills, experiences and adequate resources to take good care of properties on behalf of their clients. Property owners in Denver therefore need to make sure they have chosen the right property managers to take care of their investments if they want to maximize returns. The following are the basic items to consider when looking for Denver property management companies.
Consider whether it is a local company or a foreign one
The real estate market in Colorado has attracted both local and foreign property management companies. However, it is always good to consider local property management companies because they understand the needs of local tenants and property owners more so than foreign property management companies do. Therefore, local property management companies are in a better position to satisfy the expectations of the property owners without compromising the needs of renters. This is very important when managing real estate because competition is very high.
Proper licensing and certification
A reliable property management company in Denver should be licensed to operate as a property manager in the region. You need to make sure that the company you are about to entrust with your properties is approved by local and state authorities to manage properties in the region. This is the only way you can be sure that your properties are in safe hands. It is worth noting that there are numerous upcoming Property management companies Denver that want to take advantage of the growing market without following the right procedure and becoming certified. Always be sure to ask for proof of their certification before working with them.
Good qualifications and experience
Property management in Denver is very sensitive and property managers need to have adequate skills and experience to satisfy the needs of tenants and property owners in the region. Therefore, a reliable property management company in Denver should be run by qualified professionals with adequate skills and experience in property management matters. You need to confirm that the property management firm that you intend to entrust with your properties is run by qualified professionals with good skills and experience on real estate management matters.
Consider property management companies with a good reputation
A good reputation is very important when hiring a property management company to take care of your investments in Denver. It is worth noting that the majority of tenants in Denver prefer renting properties that are managed by property management companies with a good reputation. It is therefore important to consider hiring property management firms that have a good reputation. You can evaluate the most reputable property managers by checking local ratings and inquiring from other real estate investors who own property in Denver.
Consider property management firms with adequate resources
Property management in Denver involves doing many tasks and property managers need to be equipped with adequate resources for them to perform to the expectations of tenants and property owners. For instance, it is the responsibility of a property management company to collect rent on behalf of its clients, make sure the required documents are in order, inspect properties assigned to them, and make repairs and other maintenance on behalf of their clients. If the property management firm that you have hired does not have adequate resources, then it becomes difficult for them to take good care of your properties without compromising the expectations of your tenants.
A good property management firm should have exceptional marketing strategies
Good marketing skills are very important when managing properties in Denver. Other than taking care of the properties on behalf of investors, a reliable property management company should be able to advertise properties assigned to them on behalf of their clients in order to fill them with tenants. It is the responsibility of property management firms in Denver to make sure properties assigned to them are well marketed to reduce vacancy rates. Property owners should therefore consider property management companies that have invested in trending marketing strategies and platforms.