Tips on Property Investment|The Best Investment Properties Advice
asked:
I have a lump sum which I would like to invest in property but just before I was ready to enter the market the credit crunch appeared?
I live in Birmingham UK -is London a good place to invest? or should I stick to Birmingham.
Cecil
I have a lump sum which I would like to invest in property but just before I was ready to enter the market the credit crunch appeared?
I live in Birmingham UK -is London a good place to invest? or should I stick to Birmingham.
Cecil
Nov
26
Filed Under (Property Investment Advice) by admin
Tony Jay asked:
If you are considering your first attempt at property investment and unfamiliar with the options open to you 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 mortgage.
Buy to Let mortgages are unique and quite different from the usual residential mortgages as, instead of assessing the amount you can borrow from a lender, based on your total income, the loan is calculated on the rent you could get for the property.
Previously, mortgage lenders wanted a rental coverage that was over that of the mortgage amount, for example one hundred and fifteen per cent of the monthly repayments. But at present the rules have become less stringent and you can acquire a mortgage with rental coverage of 100 per cent in some cases. The credit crunch currently being experienced by the western world does seem to work in favour of the property investor compared to the standard residential mortgage.
With this in mind, it is still commonplace to have to raise a deposit of ten per cent or more, but more recently the number of No Money Down deals have appeared on the market. Traditionally only a small number of specialist lenders offered buy to let mortgages but more recently we have seen high street banks start to lend to landlords.
Buy To Let 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.
A majority of inexperienced property investors buy a property and consider the increase in equity as the goal. This is a long term investment. What some amateurs do not realise is that a monthly profit can be achieved if the right kind of property is purchased. The worst kind of property to start with in the buy to let arena is a flat or appartment where the cost of ground rent and maintenance has to be taken into consideration. This is often overlooked.
Anyone looking to become involved with the property investment market has a steep learning curve to endure. Property investment training is necessary and should be overlooked as a little knowledge can be a dangerous thing
Luis
If you are considering your first attempt at property investment and unfamiliar with the options open to you 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 mortgage.
Buy to Let mortgages are unique and quite different from the usual residential mortgages as, instead of assessing the amount you can borrow from a lender, based on your total income, the loan is calculated on the rent you could get for the property.
Previously, mortgage lenders wanted a rental coverage that was over that of the mortgage amount, for example one hundred and fifteen per cent of the monthly repayments. But at present the rules have become less stringent and you can acquire a mortgage with rental coverage of 100 per cent in some cases. The credit crunch currently being experienced by the western world does seem to work in favour of the property investor compared to the standard residential mortgage.
With this in mind, it is still commonplace to have to raise a deposit of ten per cent or more, but more recently the number of No Money Down deals have appeared on the market. Traditionally only a small number of specialist lenders offered buy to let mortgages but more recently we have seen high street banks start to lend to landlords.
Buy To Let 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.
A majority of inexperienced property investors buy a property and consider the increase in equity as the goal. This is a long term investment. What some amateurs do not realise is that a monthly profit can be achieved if the right kind of property is purchased. The worst kind of property to start with in the buy to let arena is a flat or appartment where the cost of ground rent and maintenance has to be taken into consideration. This is often overlooked.
Anyone looking to become involved with the property investment market has a steep learning curve to endure. Property investment training is necessary and should be overlooked as a little knowledge can be a dangerous thing
Luis
Nov
12
Filed Under (Property Investment Advice) by admin
Andrew Stratton asked:
Investing in real estate has generally been considered as a relatively safe and profitable venture. Over the past few years however, the housing market has proven it is not immune to volatile ups and downs nor it has been safe from speculators and scheming fraudsters. Fortunately, during the same time, commercial properties have largely escaped the chaos and ruin that the residential market has experienced.
In fact, a recent study by Deloitte Consulting LLP, a subsidiary of the financial accounting firm Deloitte & Touche USA LLP, found many reasons to believe that commercial values are fairly consistent, making them a great real estate investment choice.
“In prior boom cycles, commercial real estate has responded by overbuilding. The industry has clearly learned its lesson because this time commercial real estate is enduring a credit crunch – not a crisis – partially because it resisted this urge. No doubt, the industry is in a strong position to withstand a recession, should one occur, and commercial real estate remains a viable investment option for those seeking to diversify and insulate their portfolios from market volatility,” said Dennis Yeskey of Deloitte’s real estate capital markets practice, as quoted in a press release on the company’s website. “Capital flow will return in 2008, with the exception of highly leveraged deals, and new opportunities are being sought in distressed debt funds, niche opportunities, and global markets.”
The “Real Estate Capital Markets Top Ten Issues” 2008 – study found that although profits have been skimmed as the residential market has failed, commercial property investment values have held steady in many places, and have seen modest growth in others.
Plus, the surveys detailed, because of the shakeup in the housing market, mortgage underwriting rules that were also becoming too loose in the business world are now being examined and revised. The result is that investment loans will be safer, with less risk of fraud.
Another finding is that investment values have been strong in the office and industrial segment of this market, making them a much better investment at this time than retail properties or multi-family dwellings.
Additionally, funding for commercial property investment is much more readily available today than it is for residential real estate purchases. Of course, large down payments are still required as well as well-documented sources of income and assets, but the study found that lenders approve conservative commercial property investment loans quite often.
While some shifting of prices and expectations still need to take place, the study concluded that commercial market values have shown good stability and potential for pretty profits.
Going forward the study said, “Investors would do well to stop comparing CRE (commercial real estate) returns to the previous few years’ performance, and to take a closer look at how these returns fit into the bigger picture. Returns will probably be lower, but when compared to other investment categories (stocks, bonds, etc.), CRE remains an attractive investment vehicle due to its stability and opportunity for diversification.”
Yvonne
Investing in real estate has generally been considered as a relatively safe and profitable venture. Over the past few years however, the housing market has proven it is not immune to volatile ups and downs nor it has been safe from speculators and scheming fraudsters. Fortunately, during the same time, commercial properties have largely escaped the chaos and ruin that the residential market has experienced.
In fact, a recent study by Deloitte Consulting LLP, a subsidiary of the financial accounting firm Deloitte & Touche USA LLP, found many reasons to believe that commercial values are fairly consistent, making them a great real estate investment choice.
“In prior boom cycles, commercial real estate has responded by overbuilding. The industry has clearly learned its lesson because this time commercial real estate is enduring a credit crunch – not a crisis – partially because it resisted this urge. No doubt, the industry is in a strong position to withstand a recession, should one occur, and commercial real estate remains a viable investment option for those seeking to diversify and insulate their portfolios from market volatility,” said Dennis Yeskey of Deloitte’s real estate capital markets practice, as quoted in a press release on the company’s website. “Capital flow will return in 2008, with the exception of highly leveraged deals, and new opportunities are being sought in distressed debt funds, niche opportunities, and global markets.”
The “Real Estate Capital Markets Top Ten Issues” 2008 – study found that although profits have been skimmed as the residential market has failed, commercial property investment values have held steady in many places, and have seen modest growth in others.
Plus, the surveys detailed, because of the shakeup in the housing market, mortgage underwriting rules that were also becoming too loose in the business world are now being examined and revised. The result is that investment loans will be safer, with less risk of fraud.
Another finding is that investment values have been strong in the office and industrial segment of this market, making them a much better investment at this time than retail properties or multi-family dwellings.
Additionally, funding for commercial property investment is much more readily available today than it is for residential real estate purchases. Of course, large down payments are still required as well as well-documented sources of income and assets, but the study found that lenders approve conservative commercial property investment loans quite often.
While some shifting of prices and expectations still need to take place, the study concluded that commercial market values have shown good stability and potential for pretty profits.
Going forward the study said, “Investors would do well to stop comparing CRE (commercial real estate) returns to the previous few years’ performance, and to take a closer look at how these returns fit into the bigger picture. Returns will probably be lower, but when compared to other investment categories (stocks, bonds, etc.), CRE remains an attractive investment vehicle due to its stability and opportunity for diversification.”
Yvonne
