UK Property Investment Forum & Blog

April 18, 2011

Inspirational Quotes For Business People

Filed under: General — francis.emery @ 10:04 pm

April 13, 2011

How To Stage Your Home For A Quick Sale

Filed under: General — Tags: — francis.emery @ 8:51 pm

How To Stage Your Home For A Quick Sale

When property and real estate agents talk about staging your home, they are referring to a method of decorating that is designed to showcase your home’s best assets, impress buyers and sell quickly for the highest possible price.

Because not all sellers stage their homes, especially homes in lower price ranges, this technique is supposed to give you an advantage if you do use. Read on to find out how.

http://www.investopedia.com/articles/mortgages-real-estate/08/staging-home.asp

Alternatively, if you really want an unfair advantage, if you really want to learn how to make real cash in a sane and profitable  manner but help others,  thereby increasing your self-worth (and vanity!),  read further …….http://bfr-invest.net/pibwp/general-property-investment/cash-is-reality

Francis Emery

February 26, 2011

Oil Price and UK Property Investment

Filed under: General — Tags: , , , — francis.emery @ 12:57 am

A decade of UK property investment

Between 1996 and 2006, UK property was everyone and his kid sister’s investment of choice. Property investment was portrayed as guaranteed-quick-buck. All you had to do was follow a property TV program or go to a would be millionaire property seminar, then buy properties and somehow whatch them soar in value. Bingo, you joined in “the property game” and so did I!

Where are we now in 2011?

On thisismoney, in the beginning of August 2010, I remember reading: “Petrol price to hit £1.26p a litre by 2011″. Though I still wonder where did they get their forecast from (perhaps they have a secret little crystal ball), there forecast indeed was correct. This week I checked in my area and found out that the average litre of unleaded or diesel was around £1.30 a litre with the highest prices exceeding £1.40 a litre!

What’s oil got to do with UK property investment?

You may ask.
If you’re still a property investor or a landlord. if you’re considering become one because you’re brave enough to face risk and uncertainties, the question oil price has link with UK Property Investment and indeed elsewere.  Since our blog is focused on the dynamic of property in the UK, so let’s just explore that relationship oil-property for a moment.
Everyone and his kid’s sister property investor do not always pay attention to macro economical trends, currencies and commodities. This take more thinking than watching a TV program or attending a seminar; plus, you could get it wrong. Should you stop thinking? Obviously not, so let’s try.

First, if oil prices continue to go up and reach record highs, this will hurt all of us who are not filthy rich. The UK economy and indeed the world economy depend on much on oil, which means there will be direct consequences  on transport (for people) and (transported) food; two key elements of every household’s budget.

Second, with less money available in household’s budget, property actors (tenants, investors and landlords), all of us outside the filthy rich club will spend less toward maintaining, buying, investing in or renting properties. Therefore do not expect house prices to go up even if suddenly the banks decide to massively turn on the credit taps to boost the UK economy.  There won’t simply be enough cash in circulation to chase up the services that properties fullfil so not high house price inflation and actually other factors such as interest rates could even cause property prices dive deeper than 20% from what they are now. So sad?  
 

How far up for oil – how far down for property?

Our opinion is that crude oil may well exceed $200 barrel in the next 12 months if not before. But unless you are investing in oil, you really want to know how far property prices may go down.  Some say another %20, other another 40% and the optimistic even believe that we’ve reached the buttom. That’s all too confusing I agree.
I would like to say: “it doesn’t matter how far down or up property prices go”as long as you can sell it in pieces every month…

UK Property Lease Options Investing is the adequate cash flow investing strategy

Yes, we are bullish on moving from property capital investing to property cash flow investing. In time of recession, cash flow is even more king. If you can maintain a positve cash flow or enhance your position irrespective of the market price trend then who cares how far up, down or sideways?

Francis Emery

November 8, 2010

Learning to Become Rich

Filed under: General — francis.emery @ 11:09 pm

Sudeshna and I recently attended a course in London last weekend. We understand that many want to become rich but expensive seminars and training courses do not guarantee riches, they only increase the chances of becoming  rich provided one does not run out of cash after one has attended such courses or seminars. In the meantime, Sudeshna and I met many people with the desire to learn or to simply make the most out of the training course. That’s why I’ve create a page on this blog:

http://bfr-invest.net/pibwp/4-learning-to-be-rich

Visit this page if you have been given a password. If not register with this blog and send the admnistrator an email explaining that you need password to access page that http://bfr-invest.net/pibwp/4-learning-to-be-rich

 

Francis

March 28, 2010

How each exit strategy works toward wealth creation?

Filed under: General — Tags: , , , , , — sudeshnac @ 9:17 pm

Last time, we discussed why it was important to have exit strategies before we had even considered buying a property and hopefully you will now begin to realise just how it was very important to know this information because it was not only of immense practical necessity, but also because it would help you to avoid the worst pitfalls ot buying property which has plagued so many investors over the last few years and especially today’s property market.

We will now discuss each of these strategies and how it works towards that all important goal for every property investor i.e. wealth creation.

1)  Buy Investment Property and Hold

 The first step and priority towards your goal of wealth creation is to have your tenant pay off your mortgage. The property should continue
producing positive cash flow until the mortgage is paid off. Remember to ensure that the rent you charge your tenant also covers for expenses such as agents letting fees, service charges, repairs and tax, otherwise all you are doing is paying for this out of your own pocket and not really building any wealth at all!  Positive cash flow is the key here for sustaining this strategy so that, in the long term, the capital appreciation of the property increases in value, so you can then re-mortgage and enjoy the equity tax free or if desired, sell a few such properties from your overall portfolio and realise the profit less capital tax.

 
2)  Buy Investment Property, Refurbish and Sell for Cash.

The first step towards this kind of wealth creation and priority is to renovate the property quickly to reduce holding costs and re-sell for cash profit. It would be an extremely prudent idea to research and check out your building contractors’ costs by getting at least three quotes ahead of purchase, and work out your estimated calculations beforehand to see how much cash you have available to sustain the project while it is being renovated, as you will have to pay the mortgage for a few months, service charges, lighting , heating and water bills, leave alone paying for renovating and legal costs before and after sale of property. If you borrowed this cash, you will also need to take into account interest charges for the period of time it takes to do- up the distressed property. You can see why the sooner you finish the project, the more profit and more wealth you can realise. This strategy, by the way, is still a very viable option in today’s markets, as it is not dependent on the rising and falling nature of property prices, as there is real value in equity being created in the value of the property by renovating and improving it.

3)  Buy Investment Property and Sell on a Lease Option.

 The first step again towards this kind of wealth creation and priority is to receive a healthy positive monthly cash flow. Lease options is the best strategy, in my opinion, in maintaining this amazingly positive cashflow, with a lot less resistance and difficulty than the other strategies mentioned above. This will be expanded in more details in my next article, but suffice it to say that the payment of an option fee by the    tenant-buyer at the beginning of the contract, as well as the slightly higher rent for the privilege of having the option to buy the property at an agreed time later, are very positive cashflow for the landlord-seller/investor. (Of course, to be fair to the tenant-buyer, this option fee as well as the extra increased difference in the market rent all go as credits towards the purchase of the property by the tenant-buyer, but the key thing here is to remember this is ready cashflow for use by the landlord-seller at the beginning of the lease option deal and can be used to create even more wealth!)

 The second priority is to receive back-end profit, when your tenant-buyer exercises their option to buy. As the price of purchase has been mutually agreed before the lease option deal was signed by the tenant-buyer and landlord-seller, it offers an advantage to both parties i.e.which offers a fair price to the former in a fluctuating market and at a time convenient to when he/she is able to save up and afford to purchase the property, as well as offering to the latter a decent back-end profit as a result of agreeing a purchase price that takes into account the increased appreciation of capital value and equity in the property at the later time when the tenant buyer exercises his/her right to use the option to purchase the property. So in effect, you the property investor, or in this case, the landlord-seller, can continue to enjoy cashflow thoughout the deal, from beginning to the end of this period of the option, in both small and large amounts due to the option fee, rent and back-end profit -not bad at all for generating your wealth creation!

Next time, we will look more closely as to what exit strategies we should be considering within the exit strategyof lease options itself, which is itself a fascinating topic all of its own, and one which anyone thinking of using the lease options strategy would be wise to learn and apply!

Till next time then…

Sudeshna Choudhury

March 9, 2010

Wealth Creation Through The Right Exit Strategy

Filed under: General — Tags: , , , — sudeshnac @ 3:36 am

It is generally accepted, especially in the current property market conditions, that it is crucial to know your exit strategy before you buy a Property. “How will I make money with property?” This is the first thing many have in mind when they show their first interest in property investing. Rather than that, the first thing you need to start with is to determine, before you buy any investment property, how you plan to exit or sell the property.

A good question to ask oneself then is : -”What are possible exit strategies?” Well, these listed below are the tested and tried strategies most property investors have used so far:

1. Buy Investment Property and Hold
2. Buy investment property and have your tenant pay off the mortgage.
3. Buy Investment Property, Refurbish and Sell for Cash. You refurbish the property making cosmetic, mechanical and/or structural changes and sell for cash. Sometimes it’s called  ‘Buy-To-Sell’, or a ‘flip,’ if you hold it for a short length of time while making changes and then resell.
4. Buy Investment Property and Sell on a Lease Option. You then sell the property to your tenant/buyer using a lease option; they choose to exercise their option to purchase sometime in the future.

Of these, as the previous article in this blog demonstrated, Buy-to-Let options 1 or 2 were the favourites, and did appear to do so well, not so long ago! So why does this most common of exit strategies not work so well as before?

Well, think abut it this way…In recent years, the Buy-to-Let market in the UK has grown enormously, with the buy-and-hold strategy being the most popular. However, such has been the saturation level of Buy-To-Let in some areas resulting in an over-supply of investment properties and exposing investors with highly-geared portfolios to the inevitable fate of negative cashflow. Indeed, in the good times, capital growth was skyrocketing, rents were increasing for each tenancy renewal, and tenants were not always well treated. The landlord was definitely the king and property investing was so easy.

However, what happened when the market turned the other way? This is where every Buy-To-Let investor must ask himself/herself some very relevant questions such as:

Did you pay retail price when you bought your property?
 What happens if your property is empty for a couple of months?
 And your mortgage interest rates start rising again?
 And you are forced to accept a lower rent in order to tenant your property?

Remember, whatever the reason, you still have to come up with the money to maintain the mortgage payment each month! And worst still, what will you do if you have multiple properties where the above happens?  Despite how easy it all seemed in good times, do you know how to handle things when the market turns the other way? You could be forced to sell due to negative cashflow. In many instances you will lose money instead of breaking even or making a profit, as everyone bails out at the same time as you. You should never live or  believe in negative cashflow. It will give you stress, sleepless nights and fights with your partner. Such times will affect your health and that of your family’s too. This is why Positive Cash Flow Is a Must!

Therefore , exit strategy 3 and 4 are the best ones in the current market. Exit Option 4 using lease options is by far the most viable strategy for 2010 as we are all still very much in a period of  negative growth in the property market. It is interesting to see just how many so called ” traditional BTL or BMV” investors and poperty seminars are all turning to lease options as the saviour of the day! Therefore, it is imperative that every self-respecting property investor today owes it to himself to find out exactly what lease options is, and how to use it as an exit strategy. In the next article, you will learn more on this subject, but in the meantime, please check out the link below if you want to know more on lease options:

 http://www.ukpropertyladder.com/assured-positive-cashflow.

All for now.

Sudeshna Choudhury

 

February 8, 2010

From BMV to Lease Option Deals

Filed under: General — Tags: , , , , , — francis.emery @ 10:37 pm

From Below Market Value to Lease Option Deals

Introduction to a Mandatory Paradigm Shift for Property Investors

The reason why below market value deals were so successful with investors was because it was perceived an easy-to-understand way of making money out of UK residential properties, with minimalistic cash investments.

But in 2010, things are very different. Historically, the mortgage drought that started in mid-2007 in United States reached UK by the begining of 2008  then deteriorated throughout 2009.

The current 2010 situation in the mortgage market is just a mere reflection of the global financial crisis, which I believe, is more a crisis of trust between investments, financial institutions and their regulators rather than a financial crisis per se.

The implications in the UK property market are profound, touching every market players from first time buyers to vendors, from estate agents to letting agents, from mortgage lenders to mortgage brokers, and from property investors to tenants.

Up to very recently, among all market players, ‘smart property investors‘ or sophisticated investors always managed to find ways to pull out deals at 20%, 25%, 30% or even – for those with insider knowledge –  50% below market value. But things are very different as we said. No one knows how the global financial crisis will unfold, despite the media wanting us to believe that a recovery could surprise us any time.

The smart property investor has become a mere mortal man, just like any one else, he is no longer guaranteed to get a mortgage, despite an impeccable credit rating.

No one is guaranteed a mortgage!

The smart property investor due dilligence is no longer around the profitability of a deal but around the ability to get a mortgage or bridging loan for an acquisition or a buy to let re-mortgage to convert equity into cash.

Many good property sourcers or deal packagers have dropped their standards

As if things were not complicated enough, many good property deal sourcers and packagers have dropped their standards. 25% off market value? The market value is guaranted by a RICS valuation? But what does it mean in a falling market? Uncertainty!

But the market never rests, that’s a good things. The newer trends has become to shift from BMV to Lease Options Deals. This is confirmed by the fact that recently a number of property sourcers have started to offer Lease Options Deals.


So if you’re a property investor looking for lease option deals in UK, how do you know your favorite property sourcer or deal packager has maintained his deal quality when shifting from Below Market Value to Lease Options?

If you want to continue making money during this recession/depression, it is important to know answer to this fundamental question. It is important if you are a sophisticated investors, to understand how you could optimise the overall financial performance of your residential property investment portfolio by having the right mix of Buy-to-let versus Lease Options properties.

Grab Our Free Report: How To Make Good Money Shifting  From Below Market Value To Lease Options Deals

Submit your details below (Free Report)!

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November 14, 2009

Cashflow vs Capital Growth Investing

Filed under: General — sudeshnac @ 1:01 am

 

It is interesting to observe just how many novice landlords and investors have been persuaded by so called property experts e.g. property consultants, agents, finance brokers etc to pursue capital growth rather than cashflow investing which, of course, is a strategy which could work very well within a rising market, provided the investor or landlord has the correct exit strategy and sells before the downturn arrives.

However, the truth of the matter is that what really distinguishes the professional investors from the novice ones is that the former always focus first on cashflow, then capital growth later. This is often why the novice investor can take such a long time, if ever, to achieve the financial freedom that they wanted from property in the first place. You may well ask what are the risks associated with choosing the wrong strategy taken on by ill-advised novices? Well, there are several but the key ones include novices becoming vulnerable to increases in interest rates which then affects cashflow, receiving marginal cashflow during occupancy, or worse, experiencing negative cashflow during rental voids, coping with negative equity which means you can’t even sell, enduring long periods with minimal capital growth and finally, being forced to sell at a reduced or ‘wholesale’ price. One wonders why they bothered in the first place as they end up worse than they began, with zero profit and in debt!

It therefore really does makes sense to get your investment strategy right the first time i.e. cashflow investing. We will continue with this subject in the next article.  If you can’t wait until then, you can find more information by clicking on the link below.

 http://www.ukpropertyladder.com/assured-positive-cashflow.html

 Sudeshna Choudhury

October 26, 2009

Dialogue between a landlord and a property investor – Part 2.

Filed under: General — sudeshnac @ 12:28 am

Rent not Paid – Part 2

Paul: Before I read the e-book, I would like to know a bit more about Property Lease Options and how it is better than the usual tenancy agreements I have been signing all this time.

Karen: I would be glad to help you any way I can.

Paul: If I opt for Property Lease Option now, will I find tenants who would want to participate in this?

Karen: Yes, that is what makes Property Lease Options such a great arrangement. Both tenant and landlord have a stake in the property. It offers tenants a good deal, so you will not have trouble finding tenants.

Paul: From what I understand, the tenant leases property on condition that he or she will be able to buy the property at the end of three years.

Karen: It could be more than three years, though the minimum lease period is generally three years.

Paul: How exactly does it solve the problem of rent not being paid?

Karen: First, the tenant is interested in buying the property. You must understand that many of these people cannot afford to buy homes through any other method, property prices being what they are today. Besides, they are being offered the chance to live in the house before buying it. That is not an offer they get every day! That makes them eager to be in their landlord’s good books.

Paul: What about property management? How would I find the time to look after the property, or carry out repairs and renovation?

Karen: You don’t have to do any of these. Property Lease Agreement does more than solve your “rent not paid” difficulty. The tenants will take care of the property because they may want to buy it later. So no more trashed rooms, broken windows, or cigarette marks on expensive kitchen fittings.

Paul: How do I turn my negative cash flow into a positive one so that I can repay the mortgage?

Karen: First, you don’t have to spend on constant maintenance. Second, the rents keep coming in for a longer period than the general AST term. There will not be a time when you won’t have a tenant. So no more worrying about property lying vacant and rent not being paid. Third, you can ask for more rent, and the extra rent will be counted towards final payment for the purchase. Landlords often use this extra money for paying the mortgage. Fourth, most landlords ask for a down payment when signing the lease.

Paul: That brings me to another question. Will really not need the services of a “find me a tenant” agency anymore?

Karen: Once you have reached an agreement with a tenant, they will want to stay until the time the home can be theirs. If they like the property, they may buy it, and release you from the task of having to find tenants for it.

Paul: What if tenants don’t want to buy the property at the end of three years?

Karen: In that case, apart from having to look for another tenant, you don’t lose much. You get to keep the down payment on the property in most cases. The higher rents will help clear the negative equity on your home. You would have been able to rent out the property for a longer time than possible with usual tenancy arrangements.

Paul: How do I draw up the tenancy contract?

Karen: Go through the e-book published by UK Property Ladder. You will find answers to this question and many more. You can read through at your leisure and make informed choices. For details  click on this link below:-

http://www.ukpropertyladder.com/upl-apc-testimonials.htm

October 19, 2009

My tenant has not paid the rent. Dialogue between a landlord and a property investor – Part 1.

Filed under: General — sudeshnac @ 5:09 pm

Rent not Paid – Part 1

Rent not being paid on time is one of the biggest concerns for property owners. A few days back, Paul, a landlord, had the following conversation with a property investor, Karen.

Paul (landlord): My tenant has not paid the rent, again.

Karen (property investor): This is the third time, I think?

Paul: Yes. What is more, he admits he will not be able to pay before two months.

Karen: Why do you not evict him? The AST period is about to end. You can have a Section 21-b notice served.

Paul: I know. I have served him the notice. But that does not solve the problem.

Karen: Why not?

Paul: First, I am tired of managing this property. I am new to property investment, and I am not an expert. I have not been able to find the right tenants either. I think selling the property would be the right thing to do, even though I was planning to invest in a few more properties and build a proper investment portfolio.

Karen: Have you tried tenant finding services? You can also hire property management services. That way, you can bring in rents without grappling with the problems of being a landlord.

Paul: Tenant finding services don’t guarantee right tenants every time. I have not found a satisfactory property management service. Until that happens, I am stuck with managing the property and tenants on weekends and after work.

Karen: Why don’t you sell the property?

Paul: That is the second problem. The property carries a negative equity on it right now. I thought the lease would help cover the deficit, but with rents not paid, I don’t see how that is possible. Unless I can get another ?30,000, I won’t be able to sell the property.

Karen: It seems you have two problems on your hands. First, you are unable to manage the property and find the right tenant. Second, you are unable to sell the property because your property carries negative equity and you don’t have the money to repay your mortgage.

Paul: That just about sums it up.

Karen: Why don’t you try Property Lease Options?

Paul: I have heard other property investors mention it. Does it have anything to do with leasing with a view to buying the property later?

Karen: You are right. It offers a win-win situation for the landlord as well as the tenant. It is a pity so few landlords are aware of it, particularly those whose tenant has not paid the rent.

Paul: How do I find the right tenant through Property Lease Option? How will it help me deal with negative equity? Will it really help me make a profit on my property investment without having to spend 24 hours a day managing the property? What about problems such as rent not being paid?

Karen: Let me recommend this great e-book to you. It’s been published by UK Property Ladder, and has all the information you need about Property Lease Options.

Paul: Does it really cover everything I want to know?

Karen: If you are not convinced, why not read a free chapter from their e-book first? You can find it at this Web site:

http://www.ukpropertyladder.com/upl-apc-testimonials.htm

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