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With many BTL investors now completing their properties worldwide, many are curious to see if their income will be better, the same or worse than had been projected when they reserved 2-3 years ago. It is fair to say that, in some areas at least, so much property has been built that the level of income is bound to drop as renters not only have a huge choice, but they can drive down the price as is typical in 'buyer's markets'.? Recent examples include parts of the Spanish and Bulgarian coastlines, where the reality is that the income generated will be significantly lower than expected. Currently, the main avenue for income is the tenant.? However, there are a couple of solutions to increase this: 1) Lease your rooftop The rooftop does not generate income on its own, unless you lease it out.? There are two main methods: a) Install solar panels:? many EU countries now operate what is called the Feed-In Tariff Law.? This law states that any surplus electricity generated has to be bought by the grid and a tariff is paid to the producer for doing so.? The law includes all forms of renewable energy, but it works particularly well with solar panels, where the tariff is around 5 times higher than alternative sources, and can produce a very tidy income for producer i.e. the property owner.? This has been particularly popular in Germany, where solar products are by and large sold out for the rest of the year. It is worth noting that not all governments have taken on a feed-in tariff law.? Some countries, such as the UK, have decided to offer grants on residential property only to help pay for the installation costs as well as the electricity bills.? For the seriously interested investor, the country of property location will have a bearing on what income can be generated. b) Allow advertising: companies are always looking for captive audiences to advertise to, for a fee.? Low flying flight paths are also attracting interest from a number of companies. c) Host other products: this has begun to happen in parts of Eastern Europe, where we have seen developments with large terraces host air conditioning units for a fee.? The fee has been so much that the it has more than paid for the monthly community fees associated with BTL property. 2) Buy in a downturning market This is a clever strategy for those thinking of buying.? With increasing number of repossessions, the rental market demand begins to increase.? Coupled with the fall in house prices, in the UK, we have seen yields increasing towards the 6-8% mark.? Therefore, if funds are available, it makes sense to look at buying well valued property with rising rental yields due to market conditions. In conclusion... ...it is fair to say that most property investors have only looked at one, or maybe two, different sources of income.? The tenant has always been the main method, be that property in the residential, holiday or commercial sector.? However, with a bit of creative thinking, other avenues are possible and available.? Leasing out your rooftop is a substantial avenue to investigate, which we will help you to do in the coming weeks and months. Chris Davidson |
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