Rent Guarantee for Cardiff Property producing Negative Cash Flow

Rent Guarantee for Cardiff Property producing Negative Cash Flow

Are you a landlord or property investor with a lemon property investment in Cardiff or South Wales? Don’t worry you are not alone!

But first what’s a “lemon” property?

According to investopedia a “lemon” investment is a very disappointing investment. A lemon is an investment in which your expected return wasn’t even close to being achieved, and more than likely ended up losing you some or all of the capital committed. Lemon investments can be associated with poor money management, economic factors, financial fraud or just plain bad luck.

So from a property perspective a “lemon property” is a property that is either in negative equity and/or producing negative cash flow on a monthly or annual basis. As we said if you have a “lemon” property in Cardiff you are not alone, thanks to the over development of Cardiff Bay.

There are literally hundreds of landlords and property investors who bought a “lemon” off plan during the Cardiff Bay property development boom when developers were offering cash back incentives. Now thanks to the huge over supply on new build apartments many of the Cardiff property investors and landlords who bought off plan find themselves with substantial negative equity.

It’s not just homeowners, landlords and investors who purchased property in Cardiff Bay who maybe the proud owner of a “lemon”. As we have already said it is not just negative equity, but also negative cash flow that turns your property investment into a lemon!

Negative Cash Flow

It sounds simple but negative cash flow is when the rent received by a landlord or property investor is less than the total monthly outgoings of the property. Prior to 2007/2008 many property investors and landlords weren’t overly concerned if their “lemon” property was producing negative cash flow as they believed equity growth far outstripped the shortfall caused by negative cash flow, but how times have changed!

Causes of Negative Cash Flow

There are numerous reasons why a property may produce negative cash flow on a monthly or annual basis.

These include:

  • Leasehold management charges
  • Maintenance issues
  • Void periods
  • Rental arrears
  • Drop in Local Housing Allowance (LHA)
  • Benefit caps

Future causes of negative cash flow:

  • Interest rate rises
  • Moving from a fixed rate mortgage to a Standard Variable Rate (SVR)
  • Unable to switch to a better mortgage rate
  • Universal Credit (UC)

Don’t worry if you are a Cardiff home owner, landlord or property investor with a “lemon” as Rent Guarantee Cardiff have a number of solutions that can help immediately if you are in negative equity and/or producing negative cash flow.

For a no obligation consultation and to discuss how Rent Guarantee Cardiff can unburden the load of negative equity and stress of a property that produces negative cash flow, contact us today:

Bank of England has no intention of dampening UK property market

Bank of England has no intention of dampening UK property market

Some good news for landlords and property investors and those house holds trapped in negative equity, but not so good news for those looking to get their foot on the first rung of the property ladder as The Bank of England has appeared to rule out intervention to cool the UK’s housing market and escalating signs of inflation nationwide, saying policy was ‘not the right tool’.

Speaking at the launch of the Bank of England’s Inflation Report, BoE governor Mark Carney said the Bank’s financial policy committee would monitor affordability and debt overhangs, however.

Despite annual house price growth breaking into double digits for the first time in four years this month, with the Nationwide index up 10.9%, the Inflation Report downplayed inflationary pressure.

‘Activity in the housing market picked up by less than expected at the time of the February Report,’ it said with mortgage approvals averaging 70,000 a month, 10,000 below forecast.

‘Approvals are likely to rise over the rest of the year but to a lower level than expected three months ago. A growing share of recent mortgage contracts has been attributable to borrowers with loan to value ratios above 90%, though this proportion remains below pre-crisis levels.

‘New lending at high loan to income ratios has surpassed pre-crisis levels, particularly for high-value properties, including those in London. With growth in the stock of lending remaining subdued, however, the debt to income ratio of households in aggregate has continued to edge lower.’

It added that the current historic low in interest rates mean that repayment requirements remained a relatively low percentage of household income.

The report toned down recent warnings by the BoE’s deputy governor for financial stability Jon Cunliffe who said it would be ‘dangerous to ignore’ the momentum of house prices.

That followed testimony by BoE officials Spencer Dale and Andrew Haldane to Parliament in which they cited the housing market as a source of risk for the UK economy.

If you are a landlord with investment property in Cardiff or South Wales and like to continue receiving the benefits of house price inflation but do not like the hassle of managing tenants then Rent Guarantee Cardiff may have the ideal solution.

Rent Guarantee Cardiff offer a no fee letting solution in Cardiff and across South Wales. Our unique guaranteed rental scheme offers landlords complete piece of mind as they received their rent on the same day each month with no void periods and none of the hassle associated with managing a tenancy and a buy to let property.

Rent Guarantee Cardiff are often able to offer up to 90% of the open market rent increasing rental income by at least 20% when using a traditional letting agent.

If you would like to find out more information about Rent Guarantee Cardiff no fee letting solution, please complete the short form below to receive a call from one of our team.

Cardiff Landlords Does Your Tenant Pay The Rent on Time?

Cardiff landlords does your tenant pay the rent on time?

As landlords and property managers we all know how infuriating it is when your tenant doesn’t pay the rent on time. The time consuming process begins: making phone calls, sending texts and emails which often go unanswered. The longer the calls, texts and emails go unanswered as landlords we become anxious and begin to doubt whether the tenant going to pay?

 What is the solution?

If you are a landlord with an investment property in Cardiff or other areas of South Wales, we can guarantee your rent is paid on the same day every month as we become your tenant. No more wasting time on the phone calling, texting or emailing your tenant chasing the rent. No more anxious waits and sleepless nights wondering if your rent is going to be paid.

At Rent Guarantee Cardiff we ensure you are paid on the same day every month with no void periods and no tenant hassle and best of all absolutely no set up fees or management fees!

Using Rent Guarantee Cardiff we guarantee to increase your rental income by at least 20% if you currently use a Cardiff letting agent to manage your buy to let investment property.

If you would like to discuss how Rent Guarantee Cardiff can provide a guaranteed rental income and ensure you never have to chase a late payment again, please complete the short contact form below:

Cardiff Tenants Choice: Rent or Food as a Fifth Cardiff Food Bank Opens

Cardiff tenants and homeowners have to make some important decisions each month but one decision that is occurring more frequent is the choice to pay the mortgage and rent or put food on the table.

Cardiff is to get its fifth food bank to meet the rapid rise in demand, last year Cardiff Council said 7,500 people received emergency food parcels a figure which is set to increase by 20 per cent to 9,000 people this year.

The latest food bank to open its doors in Cardiff is at St Saviour’s Church in Splott. This is the first food bank in Wales to offer evening opening hours to help the growing number of the Cardiff population who are in full-time employment who rely on the help and support of food banks.

Lord Mayor of Cardiff, Cllr Derrick Morgan said, “In a climate of worsening poverty and rising homelessness, Food banks and their network of support services are becoming ever more necessary.”

Father Dean Atkins, Parish Priest of St German with St Saviour, said,”It is clear that there is a need for this kind of support in the local community and I believe the Church has a responsibility to try and meet that need.”

With zero hour contracts and economic growth fuelled by debt the reliance of food banks in Cardiff looks like a trend that will continue to grow.

From a tenants perspective the question of paying the rent or putting food on the table looks like a question that will become ever more frequent in household across Cardiff and South Wales which will have a knock on effect to landlords.

If you are a landlord in Cardiff and would like to hear how Rent Guarantee Cardiff can eliminate the stress of rent arrears and void periods while receiving a guaranteed rent up to 90% of the open market rent with no set up fees and no management fees, please complete the contact form below: