When the sums just don't add up

A new, no-holds-barred, pre-purchase property assessment is yielding dividends for uncertain investors, says Christopher Browne

If you're a new property investor, you can either buy your piece of the action with cash or use a broker to get you a mortgage, which could take several weeks or months of form-filling and fund-finding. But there's a speedier option for the first-time buy-to-letter - a packaging service known as www.online-landlord.com.

And you could say speed is of the essence at online-landlord (OLL), for its owner is Formula Three racing driver Alan Everitt. A former mortgage broker, Everitt started the site "to break away from the conventional route of application forms, home surveys and traditional lenders".

In fact, anyone who logs onto the OLL site never even sees a form, let alone a sheet of headed notepaper, until his application has been pre-vetted. Using a formula called Landlord's Choice, Everitt's team studies each client's proposed properties like scalpel-wielding house surgeons before reporting back with their findings.

"We don't carry out structural or home surveys, but in-depth reports and because we give our clients a warts-and-all valuation, three out of 10 of them decide not to go ahead. Though we may lose business, we have the satisfaction of giving our clients' plans a thorough scrutiny," says Everitt.

This week, for instance, he told a woman who wanted to buy three houses in south Wales that the figures simply didn't add up. As a result, she pulled out. "Alhough I don't advise my clients what to do, I give them all the facts and figures to help them make a decision," he explains.

So what exactly is the Everitt formula? First, the price and deeds of each property are checked at Land Registry, then all local authority planning permits and environmental searches that may have been made are rooted out by the OLL valuers. Each client is then given the rent yields of three similar buy-to-let properties in the same area to help them decide whether to invest or not. If an investor decides to go ahead after reading his report, the OLL team, which includes Alan Everitt's wife and son, asks him or her to fill in a questionnaire on the company website.

Unlike most independent financial advisers and brokers, OLL uses only a small, select group of lenders, some of them offshore. "We try to tailor our lending companies to our clients. Too many brokers and advisers use bank and insurance company-owned packagers and clubs, which means their clients do not get the personal service they may need," says Everitt.

One man who endorses that view is Richard Kirby, regional manager of Lamberts the London surveyors. He approached the Everitts after he had put down a deposit on an off-plan apartment in Deptford, south-east London. "I had invested £16,000 and didn't really want to spend much more on the apartment. However, the building was nearly finished and the exchange deadline was approaching, so I needed to get a mortgage quickly," he says.

Enter the Everitt formula. When OLL carried out a valuation on the flat, it found its value had risen from £162,000 to £185,000 in just under 12 months. "Instead of opting for the lower figure, the company got me an 85 per cent mortgage based on the higher valuation, which meant I had a few thousand pounds extra to spend on putting in a new floor as well as introducing blinds and white goods," says Kirby, who is about to let the apartment for £850 a month.

Everitt comments: 'If you are investing for the future, property is still the best option. But you need to have a strategy and to make a long-term plan of exactly what you want to do and how the figures are likely to stack up. It is no good treating buy-to-let investment as a way to get-rich-quickly or to become a big-shot landlord to impress your friends.

"You must also treat buying-to-let like a business or running a small company. After putting aside the initial finance you should carry out several months of market research in the area you are interested in - finding out the extent of tenant demand and the rental yield you might expect to get - before going ahead and buying. Though property investment is flourishing in the UK, there are too many people who fail because they don't work hard at it and get their figures right," adds Mr Everitt, whose company is a member of the Exeter-based National Association of Commercial Finance Brokers.

This week he will be competing in the Le Mans 24-hour race. "You could say speed is my second name," he adds. "And let's hope the Everitt formula turns out to be a winning one."

For more information about online-landlord, call 01322 277129