Think of it as an introduction. Spread betting is the speculation that involves taking a gamble on the movement price security. The spread betting organizations and companies always quote the two prices. The two prices are the bid price and the offer price. The investors are fond of betting whether the price of an underlying stock is lower than the bid price or higher than the bid price. They do not own the underlying stock in spread betting.
1. Research the market
If you are new to buy-to-let, what do you know about the market? Do you know the risks, as well as the benefits.
Make sure buy-to-let is the investment you want. Your money might be able to perform better elsewhere. In recent years a high-rate savings account would beat most investments. Now rates are lower, but investing in buy-to-let means tying up capital in a property that may fall in value.
If you know someone who has entered the buy-to-let market, ask them about their experiences.
2. Choose the right location
Select the correct location for your market. Select an area close to Universities and Colleges if you want to rent your property to Students! Select an area close to Hospitals if your target market is medical professionals…so once you select your market, select the location that appeals to that market.
3. Do your sums
Before you think about looking around properties sit down with a pen and paper and write down the cost of houses you are looking at and the rent you are likely to get. Traditionally buy-to-let lenders want rent to cover 125% of the mortgage repayments, although many had relaxed this in recent years. Most also looked for a 15% deposit, which protects against falling prices.
Will your investment work out? What will happen if the property sits empty for a month or two? These are all things to consider. Make sure you know how much the mortgage repayments will be and if it is a tracker allow for rates to rise.
4. Shop around
Do not just walk into your bank and building society and ask for a mortgage. Ensure you get the correct mortgage for your needs and consider using a specialist buy-to-let mortgage broker.
5. Think about your target tenant
Put yourself in the shoes of your target tenant. Who are they and what do they want? If they are students, it needs to be easy to clean and comfortable but it doesn’t need to be luxurious. If they are young professionals it should be modern and stylish. In short think about what prospective tenants want, need and are willing to pay for.
6. Don’t be over ambitious
Rent should be the key return for buy-to-let. Most buy-to-let mortgages are done on an interest-only basis, so the amount borrowed will not be paid off over time. If you can get a rental return substantially over the mortgage payments, then once you have built up a good emergency fund, you can start saving or investing any extra cash.
Once mortgage, costs and tax are taken into account, you will want the rent to build up over time and then potentially be able to use it as a deposit for further investments, or to pay off the mortgage at the end of its term. This means you will have benefited from the income from rent, paid off the mortgage and hold the property’s full capital value.
7. Consider looking further afield
Most buy-to-let investors look for properties near where they live. But your town may not be the best investment. The advantage of a property close by is being able to keep an eye on it, but if you will be employing an agent anyway they should do that for you.
Cast your net wider and look at towns with good commuting links.
8. Negotiate over price
As a buy-to-let investor you have the same advantage as a first-time buyer when it comes to negotiating a discount. If you are not reliant on selling a property to buy another, then you are not part of a chain and represent less of a risk of a sale falling through. Make low offers and do not get talked into overpaying.
9. Know the pitfalls
Before you make any investment you should always investigate the negative aspects as well as the positive. Even in popular areas properties can sit empty. One rule of thumb many buy-to-let investors apply is to factor in the property sitting empty for two months of the year – this gives a substantial buffer. Homes often need repairing and things can go wrong. If you do not have enough in the bank to cover a major repair to your property, such as a new boiler, do not invest yet.
10. Consider how hands-on you want to be
Will you rent it out yourself or get an agent to do so. Agents will charge you a management fee, but will deal with any problems and have a good network of plumbers, electricians and other workers if things go wrong. You can make more money by renting the property out yourself but be prepared to give up weekends and evenings on viewings, advertising and repairs.
Rent out your car
Owners car rental site Whipcar gives private car owners the chance to rent out their motor to a neighbour for cash.
It sounds like a recipe for trouble, but the founders have gone out of their way to reduce the risks, vetting all cars and drivers with the DVLA, holding credit card details for all parties, and offering eBay-like feedback profiles.
You may wonder how renting your car out will affect your insurance, but again Whipcar has this covered with a special insurance package for the service.
How much cash? It varies depending on your car and location; a 1.9 diesel VW Golf in London SW12 could command £5/hour, £28/day or £159/week for its owner
Rent out your home as a film location
Film & TV production companies are always on the lookout for homes and areas they can shoot in.
Your home needn’t be palatial to qualify either; all shapes and sizes can be desired, and the rates of pay are good.
There are a number of online agencies that’ll list your property for free (taking commission once your property is chosen for a shoot); never use any that charge a large upfront fee.
How much? If your property is chosen, you can expect up to around £800 for a photographic shoot, and £1,500 for a film shoot. And you get to brag about it. However, don’t bank on being selected; there are many more properties than film crews.
Take in a lodger or play guesthouse
The Rent a Room scheme means that you can take in a lodger in a furnished room in your home. The Rent a Room scheme offers an exemption, which means that you won’t need to pay tax on the first £4,250 you make each year. This is a huge tax break for most people and really ups the gain. Website Crashpadder allows you to list your spare room online, and take in travellers looking for a cheap place to stay.
How much? With a full-time lodger, you can take home £4, 250 without paying a penny in tax; if you’ve a desirable property and don’t mind paying income tax on anything above this, you could easily make more.
When shopping online, click through to a shop via a ‘cashback’ site and it’ll give you a small proportion (usually around 2% but up to 10%) of what you spend back in cash. Sites such as Quidcooffer you cashback on your purchases when you buy online, this is really handy where you can save £hundreds throughout the year.
Get paid to click
You can earn cash just for clicking links on the internet. This is because many advertisers pay websites for sending them traffic (ie. for visitors clicking through to their sites).
As noted above, cashback websites give you a share of their ad-revenue; so when they’re paid just for sending traffic, you can be paid just for clicking.
How much? It’s not too difficult to rack up £20 a month just by clicking paid links, as long as you’re consistent with the routine; set passwords on screen to make it easier.
Cash for your old CDs & DVDs.
The website Music Magpie lets you type in details of your CDs and DVDs, and it’ll give you an instant cash price, though you need to trade in a minimum of 10 at a time.
Just type in the barcode numbers and follow the on-screen instructions.
The site also buys computer games, though you may do better by trading them in at high street game shops, so it’s worth checking these too. If you accept its offer, it’ll send freepost stickers for posting and you’ll get cash upon receipt. Someone with loads to get rid of could speedily make money this way.
How much?It depends on the title, but you’ll generally get up to £3 for DVDs, or up to about £1 for CDs.
Rent out your parking space
It’s amazing what you can rent out for cash especially if you live in a desirable area. Ensure you get the most out of your property; even your parking space can be profitable.
If you live in an area where parking is expensive yet have got an empty parking space in your driveway, you could rent it on a monthly basis.
How much? It all depends on where you live in London your parking space can go for ££thousands
Get paid to review your holiday.
If you love jetting off to foreign lands, it’s possible to regale people with your holiday tales – and get paid for doing it! Travel review site SimonSeeks promises to reward users by passing on half the net revenue it’s paid by advertisers.
Simply write a community guide and post it on the site. The SimonSeeks team will then check it over, and other users will rate it. After people start clicking through to advertising links on your page, the site will pay you by Paypal, as and when the cash comes in.
As a rule, the more up-market the accommodation and longer the stay, the bigger the advertising earnings.
Become a mystery shopper.
High-street retailers are desperate to check that their in-store customer service is up to scratch, and contract mystery shopping agencies to do so.
These will employ you to visit a specific shop or pub, to rate service quality or the quality of their goods.
How much? Payment for this type of work varies hugely between agencies. Some pay in gift vouchers, others simply give you free items. Some will pay you cash too but not usually more than £30 a day.
Do some freelance work.
If you’ve skills in a specific area, you may be able to do a little freelance work on the side.
Freelancer and PeoplePerHour are project recruitment sites; companies list projects they want completed, and freelancers ‘bid’ on them, both by saying why they’ll be the most suitable candidate, and literally entering their price for the work. It’s free to join and bid on work, but a fee is taken out of your pay for each job.
How much? It depends on the job, the duration and skills involved, and how many freelancers are competing for it. The only drawback is you might find yourself competing against workers from countries with a much lower cost of living, who can undercut you.
Find out more: Join the discussion and read other MoneySavers’ top suggestions or add your own in the Freelancer discussion thread.
Ebay has been around for a long time now but many people have never sold anything on the site. There are a lot more rules and regulations on the site than there used to be but it can still be a great way to clear out your unwanted clutter and raise some money.
Over the years we have sold all sorts of things from baby clothes and toys, books and dvds. My most unexpectedly profitable item was an old knitting pattern from my gran that sold for £30.00. I also use ebay to buy bits and pieces that can be hard to find, there always seems to be someone selling it on ebay! If you want to have a look at what we are selling today her is our ebay page. We are registered as a business and buy things to sell so you never know what you may find. We mainly use Ebay now as a clearance outlet for our discount maternity wear store so you may find a bargain!
Before you start I would recommend having a good look around the site and read the rules and regulations.
Where can I get photos?
You will need to take some clear photos of the items you want to sell, the better the image the more likely some one is to buy it. You should take pictures of any damage or scratches on the item so buyers know exactly what they are buying. Before listing try searching on the site for similar items to see what prices they are selling for, how they are described and if it is actually worthwhile listing. Don’t be tempted to borrow others photos or descriptions as this will get your listings pulled.
How much does it cost to sell?
Ebay makes its money from charging you a fee when you sell. If you list an item starting at 99p on an auction there are no upfront fees so there is nothing to lose – only your time! If your item is valuable you may want to start the auction higher and you will then pay fees to list. You will be charged a Final Value Fee depending upon the selling value. You will also be charged a fee by paypal for receiving the payment. This is a link to the Ebay Fees.
What should I sell?
Popular items include baby goods, clothes, computer games and DVDs all of which we tend to have lying around. Be careful with larger items as you will need to have packaging for sending so start small.
What about Postage Costs?
Make sure you weigh your item as well and get a print out of the Royal Mail postage guide from here so you charge enough for postage. Make sure you package any breakable items well. If it is a larger item you may find a good price for parcel delivery here at Parcel 2 Go. If it is very heavy or delicate you may be better stating collection only however this will reduce the number of people who can buy.
Can I make real money on ebay?
If you get the ebay bug you may decide that you want to try and make some real money on ebay. Well this can be done but it is not as easy as it looks. Firstly you must register as a business with ebay and the tax man if you buy any items to sell. You need to find a niche market, preferably something you are interested in as you will be dealing with lots of questions and need to make sure you buy the right things. You need to check out the competition and see what price they are selling for. The most important question is – Is there any money to be made? You must cover your costs, ebay fees, paypal fees etc. If you decide to give it a try good luck but don’t give up the day job straight away!!