Any spare cash at your disposal needs to work hard to grow beyond inflation and with markets currently depressed it is a 'Buyers Market'.  But, where should you consider investing your hard won money.  Here is food for thought ... 

All investments share the same four basic features ...

1. A product i.e. stocks, shares, precious metals, precious stones, works of art, cars, property etc;

2. A buyer i.e. this can range from a small number of professional collectors or institutions seeking, for example, fine art, to many thousands of ordinary people accepting share options from their bank or building society to, private individuals or investor clubs;

3. A seller i.e. someone with something of value to sell;

4. A good price i.e. traditionally where demand exceeds supply, prices will be forced upward and, where supply exceeds demand, prices will be forced downward.

In addition to the above, the very best investments have two other key-features:

5. They are bought with someone else's money i.e. legitimate borrowing; and,

6. They attract *tax breaks i.e. deductable business expences and, Capital Gains tax relief. 

Only one of the mentioned investments contains all 6-features and we are here to find these deals for you. 

Here are three comparable examples of £100,000 investment :

1. Gold, gemstones, stocks & shares etc. for £100,000.
Will cost you cash £100,000. 
Day one equity in that investment will be c.£95,000 due to the costs of trading (5% dealer fees).
Net cost to you £100,000.
Day one return on your investment minus £5,000.

2. An Estate Agent bought property for £100,000.
Will cost you cash £25,000 deposit (plus £312:50 per month (@ 5%pa) to service a £75,000 mortgage, and if you let the property, the rental income of c. £350per month will cancel out the costs of the mortgage repayment). 
Day one loan £75,000.
Day one equity £25,000.
Net costs to you £25,000.
Day one return on your investment £Nil

3. A Below Market Value, Buy-To-Let property for £100,000.
You will purchase for only £75,000 (typically 25% off market value).
Will cost you cash c.£5,000 (plus £312:50 per month (@ 5%pa) to service a £75,000 mortgage, less rental income of c. £350per month, which cancels out the costs of the mortgage repayment).
Day one loan £50,000 (Deposit Paid).
Day one equity £25,000.
Net costs to you £5,000 (Fees).
Day one return on your investment £25,000 or 5-Fold.

In A Nutshell:

If you had £100,000 to invest, you could buy up to twenty (20), Below Market Value, Buy-To-Let properties with a true market value of two-million pounds or more;

Or

For every £5,000 you have to invest, you could buy one (1) BMV/BTL with a true market value of 10-20 times more than your investment!

To find out more about how BMV property works and strike the 'market' whilst the iron is hot, call Gina Angeletta 01275-846662 for an informal discussion.

*It is your responsibility to seek independent tax advice.

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Properties

25% off Current Market Values

Examples:

3-bed Blackpool, Lancs        Valued £125,000   For sale at £93,750   Saving £31,250

2-bed Burton-on-Trent, Staffs         Valued £110,000   For sale at £82,500   Saving £27,500

3-bed Stoke-on-Trent, Staffs       Valued £110,000   For sale at £82,500   Saving £27,500

2-bed Liverpool, Merseyside       Valued £67,500     For sale at £50,625   Saving £16,875

3-bed Jedburgh, Borders       Valued £125,000   For sale at £93,750   Saving £31,250

3-bed Abercan, Newport       Valued £75,000     For sale at £56,250   Saving £18,750

3-bed Durham, County Durham       Valued £80,000     For sale at £60,000   Saving £20,000

1-bed Bradford, West Yorkshire     Valued £55,000     For sale at £41,250   Saving £13,750

see www.bmvpropertyinvestmentdeals.co.uk for details

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Cheaper Mortgages!  Cheaper Properties!  Where?

With typical BMV savings in the UK of 25%, even more amazing savings of up to 40% can be found in Europe and there has been a significant increase in the number of buy-to-let investors turning their attention to overseas property during the past 12-months or so. 

Unlike the UK and the US, many EU member countries appear to be weathering the ‘credit ' storm more reasonably, in some case already showing an excellerating recovery. 

Even if the current strength of the Euro makes it seem like a less attractive prospect, it is also the case that mortgage availability is not so hard to come by overseas ~ depending of course, on where you want to buy.

In most European countries, lenders assess borrowers on their ability to repay the loan viz. affordability, rather than on income multiples as is common in the UK.

In France, for example, the market has remained relatively calm as French banks have always been careful about lending.  100% mortgages are available, with certain restrictions, but up to 80% is usual without too much difficulty at all. 

Spain too has never been heavily involved in the sub-prime lending market and, while some Spanish lenders have reviewed their terms, clients can still find banks that allow borrowing up to 90% LTV: in Portugal, it is possible to borrow up to 80% LTV and in Cyprus, up to 70%. 

Compare this to countries like Dubai, where clients can now only obtain finance on villas (currently no longer apartments) plus a decreased LTV from 90% to 50% in recent months and the above EU deals are exceptional.

Spain, France, Cyprus and Portugal is alive and well, remaining the popular first choice for investment property and second homes.

Source: Mortgage Solutions

What We Say ~  the current global turmoil has actually strengthened the appetite for our investors to buy more and more BMV property at home and overseas.  Those who plan to retire from the proceeds of their property portfolio and/or to reside permanently abroad have never had a better time for choice and purchasing prices. 

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Research carried out by Exact Mortgage Experts say that of 549 polled, 4 out of 5 brokers say their Buy-to-Let investors are looking to actively expand their portfolios as they believe the bottom of the market is near.

Alan Cleary, managing director said, "Investors have faith in ther BTL sector.  With so many people cut off from getting a mortgage, be they first-time buyers or people with less than perfect credit records, the UK's private rented sector will inevitably have to pick up the slack. This means there is money to be made by landlords.  But there continues to be a severe shortgage of BTL mortgage products on the market, and its putting the brakes on potential investment in the sector".

Exact calls for mortgage lenders to assess BTL applications on the quality of the underlying collateral going forward. Having carried out credit assessment on several billions of pounds worth of BTL assets this year, it believes that the performance of this asset class is largely dictated by the type of property the mortgage is secured on, a crtierion currently given little weight.

Buy to let has been demonised because of higher than average delinquency rates.  But the BLT asset class covers a vast number of  different borrower types and very different asset collateral.  Arrears rates have been skewed by over-investment in City centre new build developments where there was no demand for rented accomodation and lenders have been put off offering BTL products as a result. 

Cleary says, "but BLT borrowers can be a better credit prospect than prime borrowers if the underlying property is good quality.  Underwriting BTL mortgages needs to tighten up though - lenders should consider the standard of collateral more carefully in future to insulate against unduly high buy to let arrears". 

Source: Mortgage Solutions

What We Say ~ Whereas those looking to live in the property are limided in their overall borrowing by their combined earned incomes (usually x4), BTL investors are able to use the rental income from each property to justify each mortgage loan.  Provided a BTL investor can show annual income of £25,000 (single or joint) they can have as many BTL properties as the rental incomes from each will allow. 

For *example: asuming a 5.9% BTL interest rate and 75% Loan-to-Value, a rental income of £550pcm will support an £83,800 mortgage on a £111,700 purchase; or, a rental income of £750pcm will support a £114,400 mortgage on a £152,000 purchase; and, £950pcm a £144,900 mortgage on a £193,200 purchase. 

If deposits are paid for you, as has happened with most of our UK stock, any of the above examples could be acquired for less than £4,000 cash investment.

*You can calculate your own borrowing using the formula: annual rental income divided by interest rate multilplied by 75% equals mortgage loan.   

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