Where To Buy Investment Property in The UK

The question that puzzles many would be buy-to-let investors is where to buy investment property in the UK? There are many novice property investors currently being taken in by the tales of the past glories of successful investors. They are living under the assumption that just by imitating how someone became a property millionaire in the nineties; they can achieve the same level of success today. There is no disputing the wealth of some of these property tycoons that started their empire years ago. Bright eyed investors watch TV shows and see the kind of houses these people live in and the sorts of cars they drive and then jump headlong into imitating their strategy, without really understanding that the property market is very different now to what it was then. If you bought a property ten or fifteen years go in almost any location in the UK the likelihood is that the rent would cover the mortgage. These days we don't have such a luxury and every investment decision needs to be taken carefully and prudently adding up all the figures to make sure that you are not going to be out of pocket. This is the fundamental problem that arises when you purely imitate a strategy from the past without fully understanding what you are doing and the implications of your actions. The TV shows are not realistic. Yes, there is no doubt that these wealthy individuals have made an absolute fortune years ago, but that does not mean that if these same individuals started today from scratch with exactly the same strategy, that they would end up making the same amount of money again. For example, many investors made their fortune in the nineties through buying off plan properties. At the time they made the majority of their money it was simply a case of putting down a deposit and sitting back and when the time came for completion 12-24 months later you could virtually guarantee a very healthy profit. This is simply not the case today. Off plan properties have become over saturated, with some developers now building not with the owner occupier in mind, but with the property investor in mind instead. Apartment blocks are coming to completion and are being valued at less than what investors paid for it at the off plan stage. Property investors all over the country who don't do their due diligence are making huge mistakes, because they are simply following the wrong strategies in their quest to build their portfolio as quickly as possible. They fail to grasp that a major key with making money from property is knowing your market. Knowing whether it is the right time to buy off plans or to buy established properties, knowing whether the market is right for you to sell your properties or whether you should be renting them out. Today's investors have to learn how to respect the current market conditions. He has to learn how to adapt to whatever the market throws at him. They have to be exceptional at doing there own due diligence. In today's property market the question should perhaps no longer be - where to buy property? As on paper hardly any areas in the UK make financial sense to buy to let in. The question should rather be, how much below market value can I buy property in any location, so that the figures add up and it becomes financially viable?

The Racy World of Property Investment

There has always been a degree of “racy glamour” to the world of property investment. Too often the image has always been portrayed as an industry being handled and managed by “be-suited city types” wheeling and dealing any huge multimillion dollar fortunes/ It doesn't really matter what your perception of property development he is, the fact is that if you can time it correctly, manage it properly it's a very useful tool in any investment portfolio. Investing in residential property has become well and truly established in recent years. Volatile share and bond markets have simply underlined the inherent strengths in bricks and mortar for long-term investments. Few can have failed to notice the growth in residential property investment over the past decade. There have been many contributing factors behind this, not least the advent of buy-to-let finance offered by banks, the increased volatility in equities markets that has seen supposed blue chip names fall from grace and of course the significant returns from residential property over the pasta for 30 years. The great majority of people are now looking to own an investment property as part of a balanced and well diversified portfolio. Private bankers and IFA’s have tended to bypass the residential sector, leaving their clients to deal with this themselves. If you were to ask most people what their concept of property investment was I wouldn’t be surprised to see the response's comeback in much the sort of vein as “well, buy a flat or a house, do it up and then sell it on, make a profit and reinvest”. This as an approach might be simplistic but it's not too far from the truth and if followed to a limited degree in theory should lead to success. However their comes a time as in any business or industry that you move out of the shallows into slightly deeper waters on this point you really do need to know what you're doing or you need to get in the services of experts. This is the point in the entire process way you start to consider issues like gearing and borrowing funds to help increase the asset base of your portfolio thereby actually giving you a greater return on your initial capital. It is this sort of concept that differentiates a part time player from the professional who read he does understand what they're doing. Only when you start to look a property like this do you really stand a chance of making regular sizable returns on your hard earned money and giving your self a fighting chance to actually make a profit so that you can reinvest and earn more. If you are going to be remotely involved in property beyond buying renovating and selling then you need to consider issues like ongoing property management and tenancy agreements. Not only do you need to consider these issues you need to understand them properly as well.

Use Your IRA or 401K to Purchase Investment Real Estate

Did you know that you can use your IRA or 401K to purchase real estate and have those assets grow in your retirement plan? Most people don’t. This is a great way to increase the value of your retirement plan. Adding real estate to your IRA means these assets will increase in value tax-deferred until you begin pulling money out of your IRA or 401K. That’s right, you can buy real estate, let it appreciate, and not have to pay the IRS any income taxes on your income or gains from it until you retire! Now, there are some rules, but they are, for the most part fairly simple and straightforward. There are several types of real estate investments that are eligible for including in your IRA. Rental homes or condos, raw land, timberland, commercial real estate or office buildings rented or leased to a business are all eligible. You could also add discounted real estate paper (where you purchase mortgages from someone at a discount) and even tax certificates. You can even purchase your future retirement home with your IRA. You just have to rent it out to someone else until you are ready to retire. This is not a comprehensive list, but it should give you some good ideas. One rule concerning IRAs & real estate is that you cannot use it buy your own home or any property you live in, like a second vacation home for example. And I have also read it is not a good idea to rent out property you have purchased with your IRA to close relatives. In order to use your IRA to purchase real estate, you must set up what is called a self directed IRA. This means you can direct your own investments. To do this, you will need the services of an approved IRA trustee or custodian or independent administrator. In order to fulfill their legal obligations, the trustee will most likely require that you hire a property manager to manage any rental property. This is to ensure that the property taxes are paid on time, to collect rents and maintain the property to local building codes. This can be an advantage for you, to let someone else deal with the day to day headaches of managing property. There are many companies and individuals that offer IRA trustee services. You can use a Roth IRA or a SEP IRA, for small companies and self-employed people. According to David Gass, president of Business Credit Services, the Roth IRA is his best choice for using an IRA to buy real estate for long term investments. When you purchase real estate using your IRA, the trustee will most likely require that you purchase the property outright and not use any debt financing (a mortgage or trust deed). This is to protect your IRA from defaults on loans and other problems with long term contracts. If you are thinking, well, I can’t afford to buy a $150,000 or a$200,000 property for my IRA, don’t be put off. I have seen many properties in several parts of the country that can be purchased for under $50,000. You can even buy a mobile home and rent it out. You need to think of your real estate investments like a business. All the income must be deposited into the IRA. And all expenses related to your property must be paid from the IRA. This will keep you out of hot water with the IRS. And when you sell the property, all of the gains will be added to your IRA, tax deferred. This short article is just meant to introduce you to the idea that you can increase your wealth by adding real estate to your IRA. You will need to find and work with experts and professionals in this area. Your real estate agent can probably introduce you to several qualified people and companies that deal with this.

Real Estate Investment - Still a Great Option for the Long Term Investor

Investing in Real Estate is a great Addition to any portfolio, but what is the best way to do it? There are a number of different options, and we will go through some of them here. The first one, and the one that seems to get the most attention these days is the "Flip". With the emergence of shows like "The Big Flip", and "Flip This House", this Buy, Renovate and Resell strategy is the 'sexy' option for most real estate investors right now. However, there are a few things to consider before you go about this. The first thing to think about, of course, is where are you going to find the property that is priced well for the flip. There are a few options for investors - the first of which is to contact a good Real Estate Agent and have them scan all listings for you for any that are undervalued, priced as is, owned by the bank or foreclosure company, or any other good opportunities that might be on the market. Your Real Estate Agent is your best friend in this respect, as they will be very motivated to find you the best property, and will be very vigilant, if for no other reason than they know you will be reselling the property at some point pretty soon! When looking for Properties to Flip in your area, remember that the same rules apply as to your own home - the first three things you should look for is Location, Location, Location! Properties that are in Downtown Areas are often the easiest to resell, however, they are often more expensive than more suburban properties, so that will eat into profit margins. Look for houses on popular streets, in good neighbourhoods. If you are buying into a worse neighbourhood, make sure you are factoring that into your price of purchase, and projected resale. The other Key factor to the Flip, is that you must ensure that you don't price yourself out of the neighbourhood. For Example, no matter how nice you make your small bungalow in an area of starter homes, Don't expect to resell it for 50% more than anything else in the area! Ensure that your renovations don't bring the price too high. Finally, Understand that the higher price bracket you try to flip, the longer it is going to take to resell, and the higher your materials costs will be. You need to consider all of this and much more before considering the flip. The other main strategy that you can use to add to your investment portfolio in the real estate world is the rental property. Rental Properties offer two different qualities to your portfolio - income and capital gain. Your rental property can offer you a monthly income over and above your monthly outlay of expenses (mortgage, utilities and taxes). Even if your rental property doesn't offer you a huge (or any) monthly income, remember, you are also earning a capital gain on the property, as it is very likely to increase in value... just like your personal home is. All of this should be taken into consideration when deciding on a property. However, with Rental property, the most important consideration is always the Tenants that you have. A great looking, well maintained and located property can still be a nightmare if you get a bad set of tenants in their. It is important to do stringent interviews, check references and draft a strong lease agreement. You should also familiarize yourself with the Nova Scotia Tenancy Act. Finally, you need to decide what kind of rental property you are going to run. Do you want to rent to students? Young Professionals? High or Low Income? Students offer payment by room, which is often higher than you could command for entire flats, but you have to consider that they will likely not care for the building very well, and might not have the rent each month. Additionally, you have the concern of them bailing out on you once school ends for the year. Young Professionals will often be very easy to deal with, will pay their rent on time, but will also be very astute about how much they will pay, and are likely to be there for only a short period of time. Your Rental portfolio must always account for at least a 5% vacancy rate (in the good times), and must still generate money for you with that in the equation. Like I say, in both of these cases, your real estate agent can be your best friend, and you should seek out one that you feel can be an informative and trusted advisor. They will work in conjuction with your financial planner as well, to determine what the best course of action for you is. As always, you should feel comfortable with whatever investment you make!