DGlets

DGlets DGLets are a specialist lettings company covering Central Manchester and Salford.We offer competitive rates and a friendly personal service. Why choose us?

WE WILL BUY YOUR HOUSE! Quick decision without the need to go through agency viewings and bidding process. DGlets are a local family run letting agency. We take great pride in customer service and strive to deliver the optimum standards. Our dedicated team will be with you to provide expert guidance every step of the way. We ensure a prompt response and efficient process throughout.

08/11/2024

Say you invest with a 75% mortgage, and your property goes up in value by 3% per year. That means that your investment (the 25% you put in) has gone up by 12% – and that’s before even thinking about the rental income!

That excludes tax and other costs, but it’s also assuming you don’t invest in the right place to achieve higher growth, add value, or anything else.

The risk? Principally, that you’re forced to sell during a market crash and lock in a leveraged loss. But this is relatively easy to protect against.

16/08/2024

Option 1: Earn your returns

"Someone who takes time to study different property markets, invest into select properties using leverage, build them or fix them up and selectively hire or contract people to help him, and then re-sell the homes or rent them out, can earn a good living from that activity. It’s his time and attention that is adding value and generating returns."

The key here is that you’re earning your money through the application of your own time and skill. This is how you can earn fast (relatively speaking) money with property: find the opportunity, add value, then sell or release cash to profit.

Option 2: Let leverage plus inflation produce returns

More passive, buy-and-hold investing does work – but only if you use leverage (in the form of a mortgage), and wait while inflation lifts the value of your property while your debt remains static.

Effectively, in exchange for putting in less work, you’re accepting that it’ll take more time to see results.

Option 1 and Option 2 are both completely valid ways to invest. I wouldn’t even say that one is better than the other: it’s just a case of which suits your skills, preferences and desired timescales best.

But it really is a stark choice between the two – because you don’t want option 3…

Option 3: Go nowhere, slowly

Back to Lyn again:

"After maintenance and recurring taxes, the majority of unlevered real estate, even when rented out for cashflows, doesn’t outperform gold."

At first, this seems like the “safe” path: don’t take on the risk of a mortgage, and just hold property for the long term. As a result, many people stumble into this route by accident – yet the data shows that it’s relatively unrewarding.

Sure, you’ll end up with an asset that’s worth more in the future – but a non-property asset could have got you to the same place with a lot less work.

This week’s biggest news…

It’s been confirmed: there will be no more special tax treatment for holiday lets. As of April 2025, they’ll be treated the same as any other buy-to-let – which will likely mean higher tax bills for owners.

This sounds familiar: plans to require an EPC grade “C” are back on the table, with a deadline this time of 2030. We’ll have plenty of time to re-hash all the arguments in the coming years, but everything we said in this video last year still stands.

The average cost of a 5-year local property license has hit £700, and 20% of councils now operate some kind of scheme. Cumulatively, landlords paid £20 million in fees last year.

Apparently, the average tenant spends more than a third of their gross pay on rent – but unless I’ve missed something, it assumes that every household has only one earner. Nevertheless, the regional and city-level breakdowns are interesting.

At almost the exact moment we reported last week that OpenRent listings would no longer appear on Rightmove, the two kissed and made up – so in good news for self-managing investors, this will still be an option to get widespread visibility for your listing.

10/05/2024

3 myths about interest-only mortgages

When I’m raving on about the potential benefits of interest-only mortgages, there are three objections I tend to hear – all of which are quick and easy to debunk…

Aren’t you forgetting the cost of interest?

When your annual mortgage statement drops through your letterbox, it slaps you in the face with the thousands of pounds you’ve forked out for the pleasure of renting money from the bank.

Given all these costs, wouldn’t it be better to buy with cash if you can?

Well, not necessarily – because you’re not paying those costs.

Sure, you’re the one with the direct debit set up to your lender. But the funds to make those payments come from the rental income.

You will have calculated your Return On Investment on the basis of all costs, including your mortgage interest – so rather than it being an extra cost, it's one you've already accounted for.

How will I ever repay it?

Inflation means that over time, the real value of your mortgage shrinks relative to every relevant factor: the property’s value (which you’d expect to rise in line with inflation), the rental income (same), and your own earnings (assuming your pay rises keep up with inflation).

For example, say you’d borrowed £100,000 in 2013 to buy a £135,000 property.

Ten years later by 2023, inflation had totalled 46% (3.9% per year compounded) – meaning that if your property had grown in line with it, your loan-to-value would have fallen from 75% to 50%.

(In reality, the average property actually increased by more – 65% – over this time.)

So if you were planning to sell the property to pay off the debt, you could do so easily. And if you were planning to save up rental income or personal income to make lump sum payments, your ability to repay would improve with every passing year.

Isn’t it irresponsible to take on a debt that you don’t repay?

Well no, for the reasons I’ve covered. But there’s one more critical factor: taking on an interest-only mortgage doesn’t mean you can’t repay the capital… it just means you’re not locked into making repayments on a set schedule.

If you want to make annual over-payments or pay down a chunk when a fixed term ends, there’s nothing stopping you. But because it’s not being taken out of your income each month, you have stronger cashflow and more flexibility.

Of course, leverage introduces risk. Property values can fall over a 10 year period, and mortgage rates can increase. Whether you want to take those risks is a personal decision – but that decision should be based on the facts, not these common misunderstandings.

14/07/2023

Never buy a flat! No, never buy a house!

If you want to start a ruckus at a property event, just say “so… flats or houses?” then stand back and watch the fur fly.

It’s as explosive as giving your grumpy uncle half a bottle of wine and getting him wound up about politics just before Christmas dinner.

Unfortunately, because people often absorb the strong beliefs they hear without challenging them, they can miss out on making what would actually be the perfect investment for them.

So here are 3 myths to put to bed:

Myth 1: Service charges mean flats are worse

We hear this all the time: “I’ll never buy a flat because of the service charge”

But the clue is in the name: it’s a charge for services.

These can include amenities like a gym, concierge or cinema room - which allow you to charge a higher level of rent.

And they also include maintenance of the building’s structure, the heating system, fixing leaks… all things you still need to pay for with houses. The only difference is how you pay.

The level of service charge for any particular block might make it unattractive as an investment, or it might not: you just need to find out what it is, and factor it into your numbers.

The hidden benefit of a service charge is that it makes these costs predictable: you pay a fixed amount each month. With a house, you could go for months with nothing then face a giant bill.

(It’s true that you don’t have control over how well the services are performed, and can’t be sure value for money is being maximised.)

Myth 2: Capital growth is better/worse for houses

I’ve repeatedly heard this confidently argued both ways, which tells you how true it is!

Some people believe houses have better growth because they’re more desirable for a larger target market of buyers.

Others believe flats have better growth because they tend to be located in city centres.

Maybe these cancel each other out because when you look at the data… basically no difference until 2020.

My suspicion is that the (presumably) Covid-related shift that’s seen houses out-perform will reverse over the next few years as people’s budgets are stretched, they’re more conscious about energy bills and there’s a return to city centres, but we’ll see.

Myth 3: It’s possible to even define “best”

There’s no such thing as “better”: only “better for you”.

If your strategy is adding value to force capital appreciation, houses are highly likely to be better for you. Ever tried adding an extension to a flat? You might also just be the type of person who wants to have complete control over everything – which would also make houses a more natural fit.

If your strategy is just buying and holding for a long time while you get on with something else, it’s possible that flats will be better - because more is done for you, so you can be more hands-off.

But why do we need to choose at all?

The easiest way to make a good investment is to start with the widest possible choice of investments, then filter down from there. That’s why I own both, and the most successful investors I know do the same.

22/04/2023

Why you shouldn’t buy cheap properties (and what to buy instead)

You’re ready to buy your first (or next) property. The options are overwhelming! So how do you make a decision?

Many investors pick an area (like one of our favourite hotspots), then buy the property with the highest rental yield they can find. Getting the maximum bang for your buck: seems logical, right?

Unfortunately, they often come to regret it as they learn more. I know I did – because I’ve made this mistake too. To protect others from falling into the same trap, we even refuse to sell this type of property through Property Hub Invest - even though it’s a terrible business decision because they’re easier to find, and easier to sell.

So what’s the problem? And if high yield isn’t the answer, what is?

Why not buy cheap?

They’re more hassle. Cheaper properties tend to have issues, and attract tenants who are more challenging to manage too.

The return is never as good as it seems. If you buy for £50k and rent it out for £420 per month, that’s a 10% yield on paper. Great! BUT… even a small repair can wipe out a month’s profit!

And the big one… The capital growth is never as good. Capital growth results from a combination of high demand and an ability to pay – both of which you only tend to get with quality homes. By straying from quality, you cut yourself off from a major source of investment returns.
So what counts as “quality”? There are 3 attributes you can use as a rule of thumb:

Quality attribute #1: In the top 10-20% of rents

Rent is a good proxy for quality, so if something commands rent in the top 10-20% of the market for that property type (e.g. 2-bedroom flats) in a particular area, that’s a quick quality filter.

Another benefit is that people who are paying this level of rent tend to be more financially secure, so you’re less likely to get sporadic payments and arrears (but you must still reference applicants thoroughly!)

Quality attribute #2: Uniqueness

People value what’s rare, so a unique property tends to benefit from the most capital growth.

This can be at an individual property level (e.g. the penthouse in a development, or the only house on the street with a large garden) or a local level (e.g. the best development in town).

Quality attribute #3: The best area

The majority of a property’s value comes from its location, not the physical structure itself. If you buy into a popular and growing area, you reap this benefit as it continues to expand and improve – without needing to do anything to earn this yourself. So filter for areas that are already strong in terms of transport links, employment and leisure facilities – and look out for those where more improvements are planned for the future.

18/04/2023

I've got a quick tip for when you try to negotiate prices – don't ever ask for discounts!

Instead, give the most ridiculous offer, give a reason why it’s a great offer, shut up and expect the other party to say “no”!

Contrary to what people believe, “no” is the start of your negotiation, not the end.

For example, if the seller of a property is asking for £100,000, my first offer would be £70,000. I justify by saying that my finances are ready and I can complete within 3-4 weeks. When the seller says “no”, then I would increase it from £70,000 to maybe £73,000 and focus on the value that I can bring, until we get to a price that I am happy with, say £80,000.

What if the seller gets offended and shuts the door in my face? Then move on! Play the numbers game and never be needy. Whenever you’re needy, that’s when you pay too much for it.

JF Kennedy once said “Never fear to negotiate, but never negotiate out of fear”!

Best wishes

31/01/2023

It’s the end of buy-to-let as we know it!

Or that’s what people would want you to believe, with drama surrounding government fiddling and the rise of interest rates.

There’s been a lot of talk about the changes that have come to buy-to-let properties. But it’s just a load of nonsense.

For starters, property investing doesn’t begin and end with buy-to-lets!

Have you thought about all the other strategies you could use for a well rounded, diversified portfolio? How about all of these…

Serviced Accommodation
Rent to Rent
Buy, Refurbish, Refinance Flips
Deal Packaging
Rent to Own
ALL of which have ways to combat any changes that come your way.

31/01/2023

This war on landlords is getting worse”

“'I don't know how I'll support my family': landlords' retirement dreams in tatters”

“Landlords will lose money by next year as buy-to-let Britain falls apart”

Are just a few headlines I’ve seen. But I just feel bad for them.

There are many reasons why they are scared.

They are not professional investors - Most only see it as an a way to top up a pension without any effort
They are stuck on variable rate mortgages - Now that interest rates are rising they are regretting their way of funding their properties
They are single property owners - With only one property, they put all their eggs into one basket.

This isn’t the way...

17/01/2023

As you may already be aware, in August 2022 a new act came into force called the Economic Crime (Transparency and Enforcement) Act 2022. A key component of this Act was the introduction of a new Register of Oversea Entities (ROE).

An Overseas Entity (OE) is defined as a company or organisation that only has an overseas registered address.

Any overseas entities are now required to provide greater transparency over their beneficial ownership. Therefore, if they are transacting property or land for sales and lettings in the UK, they must now register with Companies House, and identify their beneficial owners. The new regulations will apply, retrospectively, to overseas entities who bought property or land on or after:

- 1 January 1999 in England and Wales

- 8 December 2014 in Scotland

Any entities that disposed of property or land after 28 February 2022 will also need to register and provide details of disposal.

After registering, the overseas entity will get a unique Overseas Entity ID to give to the land registry when it buys, sells, transfers, leases or charges UK property or land.

08/01/2023

It’s structural. Demand is 46% higher than average, and supply is 38% lower. That’s not going to change any time soon.

Big cities, big rents. London, Manchester and Glasgow are leading the way. Remember the “race for space”? Seems like everyone’s racing back.

Small is beautiful. Competition for 1-bedroom flats has jumped, and demand for houses is declining.

We’ve peaked. Rents will keep rising, but the rate of growth will probably slow down. Zoopla predicts 4-5% rental growth over 2023.

Summary: The population is rising rapidly, households are shrinking… yet the number of rental properties is the same now as it was in 2015. All the factors are in place for another strong growth year.

Available For new year. Very well situated wiith residents car park. Great transport links.
21/12/2022

Available For new year.

Very well situated wiith residents car park. Great transport links.

Available from 1st January.
13/12/2022

Available from 1st January.

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Manchester

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+441613281234

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