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Hassle free buy-to-let?

Ever thought of being able to invest in residential property and receive a yield of 5-6% with no voids or letting costs for 3-5 years.

Sounds too good to be true?
Apparently not, all thanks to a new concept called private sector leasing (PSL) where private sector landlords lease properties through a management company to a local authority.

The largest of these management companies is Orchard & Shipman plc (O & S) who have now run a contract in Hillingdon, Middlesex for over 4 years to manage and maintain 900 flats let to DSS tenants. The project proved so successful that O & S started running a second scheme in Edinburgh. There, just as in the Hillingdon model, O&S can provide guidance to landlords considering property purchase and then maintain and manage the properties for them. In return, the owners get a 3-5 year contract and yields of about to 5-6%. In Edinburgh, O & S, which is running the scheme for tenants of the city council, aims to have a portfolio of 1,500 1-4 bed properties within the next two years.

Landlords who join the scheme must furnish and decorate their properties and pay for all the running repairs such as faulty boilers. However, any damage caused by the tenants is paid for by the councils or O & S under a separate dilapidation clause. Another advantage to the landlord of this scheme is that they do not pay any management fees, which can typically run at 10-12% of the gross rent, as O & S receives a retainer from the councils. The other significant advantage for landlords is that rent is paid quarterly in advance by the council. This means that there should never be a problem for a ‘geared’ landlord to find the money to meet any monthly mortgage payment as the money will already be in their account.

Currently the Edinburgh scheme has delivered 550 properties but the good news for potential investors is that just under 1000 more are required. So if you are looking to diversify your portfolio, or indeed looking for your first buy-to-let without the worry and hassle of managing it yourself then this could be the opportunity for you. A spokesman for O & S cautions “The council want properties evenly spread throughout the City so before buying it’s essential to contact us first to make sure you buy an acceptable property.”

For further details or to request an information pack:

Orchard & Shipman plc
Tel 0131 555 7781
www.orchard-shipman.com

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