Property Investment Vs Property Development

Property Development Or Property Investment

Property development and property investment could be classed as one and the same in some quarters - but in reality they are a quite far removed.

Property development is best hightlighted by the televison programs that frequent our screens such as Property Ladder and How To Be A  Property Developer. A residential property is acquired below the market value due its state of disrepair and then developed into something that can be offered for resale or to the Buy to Let or rental market.

Profit is made (or lost) by the developer but time has to be factored into the equation as development is very much hands on and linear. Many individuals that are property developers can only concentrate on one project at a time.

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Property Investment on the other hand is all about the rental market and is completely scalable.

Why Property Investment Is More Profitable That Development

The ideal starting point for a would be or potential property investor would be to research properties in your area - visit local estate agents and ask to be put on their mailing list. Ideally pick a dozen or so properties that will not take up too much of time firstly, to initially view - and secondly to visit should the need arise.

The type of properties to avoid are flats or apartments where you may need to factor in the cost of ground rent or communal maintenance - this monthly cost will come out of your profit.

It is important  to remember that your profit is not based on the potential of your equity rising in years to come but a solid monthly profit from the rental.

Once you have found the formula for success it can repeated over and over again.

Property Investment is by a better option and by far a better use of you time and capital.

Is The Property Market Going To Crash

Property Market - Is It Going To Crash

According to the media the UK property market is free fall - not a day passes without a mention of the current property crisis in the UK. But is the property market in as bad condition as we are lead to believe?

If you are worried about the situation and have been convinced the UK housing market is going to crash like the USA and Spain you are worrying unnecessarily -  There may be some similarities between us, but our (the UK) prices will drop less significantly than those of the USA and Spain.

The reason for this confidence is simple economics and the fact that the demand for housing far exceeds the supply.

This year alone (2008) the UK government has predicted we will only build 100,000 new homes - a quarter of the required amount- before 2009. So until the UK can match this demand, the market is safe.

Why The UK Property Market Will Not Crash

1.    One of the reasons why Spain is struggling is that they are still building more than they require. The number or available properties far exceeds the population. We have got the opposite problem in the UK.

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In 2005, 193,000 new houses were built. This may sound impressive but to make a real impact on the growth of housing prices and reduce their costs, 245,000 new homes need to be built. And we are far from reaching that goal.

2.    In 2000-2006, the uk population increased by approximately 1.7 million this resulted in the need for 800,000 new residential houses. Although 1.1 million were built in this period, these extra 300,000 new houses were insufficient. They could not account for the growth rate of the churn or 2nd home ownership.

3.   When UK inhabitants are looking to move home they do not compare their salary to the price of the house. The big mistake they usually make is to actually compare their income to their annual mortgage payments.

Although, it could be argued that mortgage payments - as a share of a household income - has increased from 15% (2001) to 19.6% in 2005, these figures are still well below the 34% recorded in the last property crisis in 1989.

4.    It is natural to see fluctuations and property activity in certain areas of the country as the economy grows, but some areas struggle to match these demands. Through a combination of a lack of housing and transport, certain locations have become property hot spots to accommodate this need, but cannot expand fast enough.

Stratford in London springs to mind. Read about Property Investment In Stratford

Is Property A Safe Investment

Throughout the last two decades the UK has survived two property crashes and bounced back stronger than before. Experts predict that by 2010 the housing market will be buoyant once again.

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Best Mortgage For Buy To Let

Buy To Let Mortgages

If you just starting out in the property investment market and completely bemused as to which type of mortgage to choose for your buy to let property, there are specific mortgages for Property Investment - i.e. to rent out rather than live in - you will need a buy-to-let (BTL) mortgage.

Buy to Let mortgages are unique and quite different from the mainstream mortgages as, instead of assessing the amount you can borrow from a lender, based on your income, loans are calculated on the rent you could get for the property.

In the past mortgage lenders required a rental coverage that was above that of the mortgage amount, for example 120 % of the monthly repayments. But lately the rules have become more relaxed and you can get a mortgage with rental coverage of 100 per cent in some cases. The credit crunch is seeming to work in favour of the property investor compared to the standard residential mortgage.

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However, it is still usual practice to have to raise a deposit of 10% or more, but more recently the number of No Money Down deals have populated the market.  Traditionally only a small number of specialist lenders offered BTL mortgages but more recently we have seen high street banks start to lend to landlords.

BTL mortgages can normally be either repayment or interest-only loans. Interest-only mortgages mean cheaper monthly payments but the property will not be yours at the end of the term – you will still need to repay the capital amount or sell the property. Repayment mortgages ensure that you repay a bit of the capital and a bit of the interest each month and at the end of the term the debt is fully paid off.

If you have have ambitions in the Property Investment martet and would like to find out more information about Buy-to-Let mortgage option you can register for a Free property Investment Workshop in your area.

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How To Be A Successful Landlord

Advice For For Landlords

A decade ago anyone with the slightest entrepreneurial spark would have been highly advised to get involved in the property development or property investment market.

The life of landlord was an easy one - the life of a new start up landlord was made easier by mortgage lenders ready to throw money at the mere mention of  Buy to Let.

A decade on and the life of landlord is still relatively easy - despite the doom mongerers, landlords in many UK regions have only suffered a slight drop in the price of their property assets. Many landlords consider their equity to be a long term investment with the monthly rentals their earnings or wages.

In fact, many landlords have enjoyed a higher monthly rental income from their Buy to Let properties as the current housing market has dictated that renting rather buying makes economical sense to the first time buyer or those at the bottom end of the property ladder.

So How Do New Landlords Start And Survive

Recently the NLA - National Landlords Association offered advice to its industry and gave tips on how to survive the credit crunch.

The tips for landlords are based on the assumption that the landlord has a property and is about to offer it into the property rental market.

1. Get Advice - a little knowledge is a dangerous thing especially where money is concerned. A good investment can turn bad if you don’t plan for as many eventualities as possible. Joining associations such as the NLA should be a prerequisite - The NLA has over 13,000 throughout the UK and has the new start landlord and the experienced among its members. Visit The NLA Website

2. Understand Your Legal Obligations - another reason to join and an association such as the NLA. The private rented sector is now governed by over 50 Acts of Parliament. With this increasingly heavy regulatory burden, it is now more important than ever that you, the landlord understand your legal responsibilities.

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3. Make The Most Of Your Mortgage - its may appear obvious but some landlords struggle with their current mortgage repayment without investigating other avenues. If you are at the end of a current term and the repayment plan doesn’t look as attractive - try commercial finance opportunities.

4. Choose Your Tenants Carefully - it is essential that as a landlord you don’t rely on gut feeling. Check out prospective tenants thoroughly. Perform a credit check and and search for previous tenancy information.

5. Talk To Your Tenant - all relationships work better with communication. Don’t just contact your tenant about rental matters, he or she is your customer and so treat them like one.

6. Students Make Great Tenants - don’t shy away from letting your property to students. Provided you have employed the services of letting agency it makes economical sense to let to 3 students rather than a family of three.

7. Put Money Aside For Repairs - rental income is not pure profit. just as in any residential property things will need replacing or repair such as a new boiler, carpet or window. If finances allow put aside 10% of rental income for miscellaneous repairs.

8. Get Insurance - get adequate cover for every eventuality. Standard household insurance policies may not cover a buy to let or rental property. Specific industries requite specific insurance cover. Property investment insurance companies such as ForLandLords have been set up with the Landlord in mind. Visit  ForLandLords website.

9. Listen To Advice - television programs such Property Ladder are built for TV granted but they do highlight that even after advice has been given it is often ignored. Remember if you are new to the whole landlord scene - there are others that aren’t.

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10. All Of The Above - the 9 above points are of equal importance. Putting money aside for repairs is of little consequence if you as a landlord are not properly insured.

Property Investment In Stratford

Property Investment Opportunities In Stratford

In 2012, Stratford in East London will the centre of the planets focus as the Olympic Games comes to the UK for the first time since 1948.

A major event such as the Olympic Games can put a tremendous strain on the infrastructure of the host city but can also return a high yield of profitability to anyone with a financial interest.

Property Experts predict that investing in property in the Stratford area should achieve higher than average returns in London. This is largely due to the fact that prices of properties, both residential and commercial in Stratford should increase exponentially not only because of the general trend of property appreciation in London, but also due to a massive transformation of Stratford area into a new European business centre with outstanding international and local transport links.

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The transformation of Stratford has already began and will produce the creation of the City Of Stratford and the Olympic Park. A property investor has a golden opportunity right now to jump onto the Stratford Olympic gravy train.

The current position of the property market could not be better for potential property investors. Property prices are still on the way down but slowing and when prices reach their inevitable bottom the rise could be astronomic especially in and around the Stratford Area.

What The 2012 Olympics Mean For Stratford

This is not mention the employed opportunities with the creation over 30,000 permanent jobs an as yet an unestimated figure for temporary employment.

Stratford will become the third most important area of London behind the West end and Knightsbridge in terms of the retail sector.

What Does This Mean To Property Investors

Usually the upgrade in a city or region happens over time and several factors can influence a change in fortunes. The regeneration of Stratford is happening for a specific purpose and so investment opportunities are very real and timescales achievable.

Residential and commercial property investment opportunities in the Stratford region both existing and off plan are being created thick and fast.

The Olympic Gravy train is coming to Stratford - make sure you are on it.

Mortgage Slump Could go on for 3 Years

Houses for sale but buyers can’t get mortgages

People looking to purchase a home were faced with more gloomy news recently, when some forecasters are predicting that the mortgage crisis could last for up to three years.

It’s certainly clear from the Bank of England figures that mortgage approvals dipped dramatically by almost 70 per cent in June to a record low. The figures are that only 36,000 new mortages were arranged for people moving house. And the overall net mortgage amount plunged to only £3.1 billion.

So people are still looking to get finance approval for buying a new property; it’s just that mortage lenders are being much more cautious about who they lend money to in the current economic climate.

A Government report indicated that there might not be a quick fix to remedy the home loan doldrums. Although to be frank, when did the government ever come up with a quick fix for anything?

Any offer of help from the government to ease the securities market quickly evaporated when the credit crunch hit. The banks and building societies are now waiting for the follow-up report to be published in the autumn for a clear way forward. And this has caused a backlash, because the mortgage lenders are calling for some decisive action to resolve the current mortgage crisis.

Property Prices Fall, Deposits Keep Going Up

So in spite of falling property prices, mortgage lenders continue to tighten their lending conditions. And the average deposit a home-buyer will need to buy a property keeps rising. In some parts of the country, deposits of 20% are being requested for purchasers to qualify for a home-loan.

A recent Hometrack survey found that the average property sale is going through at roughly 10 per cent below the asking price. Which is not good if you’re a seller looking to move up the property ladder. But - if you’re an investor looking to make the best of a bad situation, and you have some cash liquidity, you could move into this market in a very strong position. And one thing the ‘experts’ all seem to agree on, is that this situation is likely to last at least 3 years, before it moves back to more realistic levels.

If you’re looking to move into this property market, it might be wise to get some sound advice from someone who is familiar with the current property market, and can help steer you through the potential ups and downs.

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Best Property Investment Course

Number 1 Property Investment Course In UK

Property Mentor is now officially the best property training course in the UK. Property Mentor can educate you to benefit from groundbreaking new strategies to earn more money from the current market conditions. 98.4% of attendees in June 2008, rated their course as being either ‘Superb’ or ‘Outstanding’.

If you have any ambition to get involved in the property market - Property Mentor can explain exactly what is needed - it is not all about money or cash flow - many successful property investors started with nothing and did not use any of their own capital.

What is Property Mentor

Property Mentor is the UK’s leading training course provider with workshops and seminars running continuously the length and breadth of the country.

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Property Mentor is lead by Matthew Lauchlan, a multi millionaire property developer that over the last few years has trained many individuals from varying backgrounds to profit from the property market using the exact same principles and techniques that he has.

The UK property investment scene is one of doom and gloom to the uninitiated, the media is continuously painting a picture of economic disaster led by the collapse of the housing market.

Best Time To Invest In Property

The experienced property investoris getting ready to pounce - just as with any other investment opportunity, typically stock and shares - the best time to invest is the price is falling and just starting to bottom.

Experts predict that by 2010, just over a year away at time of writing the housing market will gather pace again. The current conditions are lead by many factors, many unrelated to the true price of property.

Soon demand will outstrip supply forcing house prices up again. The current blip is of no surprise - many experts predicted.

If you want to ride the next property boom register for one of Property Mentors events.

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Free Online Moving Service

Free Move Planner Service

If you are planning on moving and prefer the simplified, hassle free approach then contact MoveMe.com. Moveme.com are a free online moving service for home owners and renters moving home.

Set up in 2005 MoveMe aim was to bring togother all the elements of moving house together under one roof.

Moving house is one of the most stressful situations you will encounter - for the logistically challenged MoveME have the answer.

Moveme provides their award-winning free Move Planner which many customers have already discovered to be essential during their move. It will organise and help people moving manage their move, reminding them to do things as and when necessary and giving the tools to do them. Users can also personalise it to include their own tasks and reminders.

Moveme have thought of just about everything that is involved with moving home so that you won’t have to. From everybody who should be on your change of address list to removals, conveyancing, utilities, storage and much more, you’ll find that moveme.com will not only alert you to the tasks that need doing, but, wherever possible, will enable you to organise them online, including all the forms and letters you will need.

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