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This is the first of two instalments designed to help you maximise your property investment portfolio by providing you with a background to using www.bmvpropertyinvestmentdeals.co.uk to maximum effect. Part One covers a brief history of property acquisition; Part Two covers getting the very best out of our website. PART ONE History of Property Acquisition UK The current recession is the fourth event I have witnessed in a financlial services career spanning more than three decades. Whether for or against property as a type of investment, the figures supporting bricks and mortar profits clearly demonstrates that, over the medium to long term, property represents a truely resilient investment equal to the returns of highly speculative investments such as stocks and shares but, with far less risk. Property performs well when measured against other investments for three powerful reasons: first, property is the only investment where one can use a fraction of your own money to buy the investment, somone else (a lender) putting up the bulk of funds; second, property is immovable, standing with other similar property. No one can physically steal it therefore, it remains a real, tangible and easy to value asset; and, third, more and more property is required to house a growing population. Property Ownership Since the early 1950's, the average man in the street has increasingly entered the domain of property ownership. Gone are the days when borrowing money to buy property is restricted to the the rich and powerful. During the past 20 years prudent, multi-property ownership has also increased for the man in the street. Though the past two years has seen market 'adjustments' to lending habits nevertheless, the facility of Buy-to-Let funding has improved dramatically. Current Market Value Property This is where the sellor (or vendor) obtains a value of their UK property by a surveyor from the Royal Insitute of Chartered Surveyors (RICS) and offers the property for sale at or very near that valuation e.g. £100-97,000 for a £100,000 property. During the past decade, opportunities have presented themselves to acquire property for substantially less than current market value viz. below market value or bmv property. Below Market Value Property This is where the sellor (or vendor) obtains a value of their UK property by a surveyor but offers the property for sale for anything up to 30% below RICS valuation e.g £70,000 for a £100,000 property giving a saving in this example of £30,000. That's £30,000 profit, day one, to the investor. Why Would Anyone Sell So Cheaply? Due in part to over expectation of the borrower at the time of purchase or the subsequent financial demise of the original purchaser and, the dubious practice of some lending institutions who accepted an unreasonable risk, often referred to as 'sub-prime', many mortgagees have chosen to quickly let the responsibility of homeownership go and return to rented accomodation: they just want to obtain a quick sale to pay off their loans! Is This Fair To The Vendor? Property Agents are required to thoroughly assess the situation of the vendor who must convey their reasons for wanting a quick sale. Often based on being financially overstretched, the vendor has calculated that reducing their biggest outgoing (their mortgage payment), coupled with reduced costs of property maintainance is their best option for paying the remainder of their family bills. There are many reasons for wanting to give up a mortgage commitment and property maintenance costs, which may include: emigration; sharing a family home; inheritance of a property; being laid off work; death or sickness of the primary breadwinner; and, retirement. In Summary Where there is a willing buyer and a willing seller, www.bmvpropertyinvestmentdeals.co.uk extends a remarkable opportuinty to prudently expand an investment portfolio. See PART TWO for Getting The Best Out Of www.bmvpropertyinvestmentdeals.co.uk
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