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You couldn’t miss the headlines last week announcing the Bank of England’s decision to raise the base rate. This takes it to the highest level in almost six years. All this is having a very painful effect on landlord’s cash-flows. Each 0.25% rise increasing interest rates on a standard ?100,000 loan by approximately ?20 a month. This means that

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

the same loan has seen its interest rate bill rise by over ?140 a month since rates bottomed at 3.5% in July 2003. The question is how landlords respond to this worsening situation. The answer is simple; like any business facing rising expenses they must look at ways of reducing their costs if they are to survive and prosper.

Here at Property Ha

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

k we have consulted our expert panel of buy-to-let advisers and worked out the five steps to cutting your costs. In order to illustrate the effect of these suggestions we have come up with a benchmark property to which the following applies: Value ?120,000, mortgage ?100,000 interest only, Rate 6% & cost ?500 pcm; rent ?500pcm, management fees 10%

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

pa. Total costs ?7250 pa. The Property Hawk team reckon it is possible to reduce your costs by up to 25% on a standard let just by following these simple suggestions:

1. Take back your management
Many landlords have decided to out source the day to day management responsibility of their properties to a letting agent. This is fine when interes

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

rates are at rock bottom and property prices soaring as it is far more profitable to utilise your time in implementing an aggressive acquisition strategy.

However with a standard buy-to-let mortgage costing about 6% and rental yields are only between 4-5%; many landlords need to face the reality that this is no longer a luxury they can afford. I

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

yself have decided only this year to take several properties away from a letting agent. Letting agents typically charge between 8-12% of the gross rent for on going management. On a ?120,000 property producing ?6000 of rent a year, this would amount to ?600 per annum. On top of this many agents are VAT registered which puts on an additional 17.5%

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

or ?105 pa. Then there are the hidden costs. Your agent may be one of those that issues your tenant with a new agreement every six months for which they then charge you a further ?80 plus VAT. A far cheaper option would be to let the tenancy run on to become a periodic tenancy where each party simply carries on under the same terms of the original

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

agreement until they wish to give notice. Other hidden costs can arise by using an agent.

For example, when maintenance work is carried out. Often unknown to particularly the novice landlord, some agents have agreements with certain ‘favoured’ contractors. This means whilst you are paying ?200 to have the boiler fixed, the plumber is only recei

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

ing ?125; the other ?75 is paid to the agent in the form of a commission or introducers fee from the tradesman. It’s quite conceivable that an extra ?150 costs will be incurred in work done by contractors during the year where either a commission has been paid or the agent has failed to secure a competitive price. TOTAL SAVINGS ?1024 SAVINGS = 14

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

2. Remortgage
Many landlords and particularly those who have had a property for several years will have historic mortgage products. This is very likely where a fixed rate period has ended and the mortgage has reverted to the company’s standard variable rate. By shopping around landlords should be able to shave between 0.33-0.5% of the inter

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

st charged over the term of the loan. Even a 0.5% reduction in the rate will save just over ?40 per month or ?480 during the course of a year. Most products are accompanied with fees and charges so these must be factored into the calculations. Use our Mortgages service to find the best current rates availiable. However, given the savings can run

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

or many years it is often still beneficial to swap. Other advantages are that you can choose the most appropriate product to your current situation. For example with fixed rate product you will insulate yourself against future rate rises.

For a list of the most comprehensive rates available in the market have a look at our Best Mortgages Rates. O

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

r experts maintain that even taking into account charges over the long term it is possible to save on average ?350 per annum on mortgage costs. TOTAL SAVINGS ?375 SAVINGS = 5%

3. Active management
This is tied to the first tip. By taking management back from an agent landlords will not only save on fees but potentially it is possible to red

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

ce void periods i.e. the period when the property is lying empty and not earning rent. Traditional wisdom is that you should allow for one months void each year for each property. We do not accept this. Your aim should be zero. Accepting though that this will not always be possible, we still think that by being pro-active with marketing it is po

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

ssible to reduce any voids period by at least 2 weeks. Ensure that your property is featured on the Internet on a site such as Lettingweb. In the current buoyant rental market there should be no reason why your property is sitting empty. This equates to a saving of ?230 pa. TOTAL SAVINGS ?230 SAVINGS = 3%

4. Insurance
One of the bigger fix

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

d costs incurred by landlords is their insurance. It is vital that you are fully insured as failure to do so would cost you dear should disaster strike. However, it is still possible to save money and be properly insured. For instance some landlords will take out separate contents insurance to guard against damage to white goods and carpets. Thi

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

is not actually necessary as many buildings insurance will cover this automatically as fixtures and fittings. Also if your policy has been in place for a long period of time it may well have been increased more than is required. Go to the BCIS insurance calculator or read the recent Absolute Beginners feature within the magazine section to check

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

hat your sum insured should be. One of the cheapest policies is available through Alan Boswell Insurance Brokers. Backed by Norwich Union the policy which has been specifically tailored for landlords automatically includes all white goods in its’ cover. Our panel estimate that an annual saving of ?75 pa could be made by shopping around for the be

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

t deal. TOTAL SAVINGS ?75 SAVINGS = 1%

Other specialist B2L insurance brokers are Endsleigh, and Simply Business

5. FREE Property management software
If you think that managing your property yourself is a daunting prospect then you shouldn’t. Property Hawk has all the information within the Landlords Bible to guide you through the process.

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

It also has easy to use software within the Property Manager to keep track of your day to day finances together with a free Tenancy Agreement for you to download and use.

All this is available for free on the www.propertyhawk.co.uk website. This saves you ?15 for the book, ?10 for the AST, ?100 for the software. In total ?125. TOTAL SAVINGS ?12

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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