Posts Tagged ‘investment’

Investment in real estate gives an opportunity to gain good profit for a lot of people. Since investing in a real estate is a great short or long term opportunity, the demands are increasing with each passing day. The price increases substantially over time and this is the main reason for the increasing demand.

There are several real-estate investment trusts that are used by people to invest in residential and commercial business of real estate. A group of people form a trust and a lot of mortgages and commercial properties are managed and possessed by them. Investments are made by the trust in several other real estates. These that invest in real estate show the characteristics of stocks and real estate.

A trust that invests in real-estate works like a company and produces income from real-estate like offices, apartments, shopping centers, hotels and warehouses. Though there are wide ranges of property types, most of the trusts that invest in real estate concentrate on just one of the property types. Those ‘trusts’ that are specialists in health care are known as health care real-estate investment trust.

A trust for investing in real-estate was formed in the early 60′s so that it could raise the investment opportunities in real-estate to a great extent. Small scale investors have the right of accessing these investment funds. The advantage of forming a trust is that a person can select a particular amount of share he wants to invest from various trusts instead of investing in a single management or building.

The trust that invest in real-estate can be broadly divided into three types. They are mortgage, equity and hybrid. Mortgage trusts that invest in real-estate offer direct money to the owners of real-estate by purchasing mortgage or loan backed securities. In case of equity trusts that invests in real-estate the management and the ownership is with the trust. The last category of trusts is a combination of the equity and mortgage trusts. The hybrid trusts that invest in real estate not only provide loans to the operators or owners of real estate but also own properties.

There are quite a few differences between trusts that invest in real-estate and limited partnerships. The main variation is that in case of investment trusts the annual tax information should be provided to the investors. However in case of limited partnerships there is no need to provide for the tax information. The second difference is that in case of limited partnerships there is a limit to the amount that can be invested.

However there is no limit to the amount that can be invested by an investment trust. In case a company desires to be a trust that invests in real-estate, the company is bound to share more than 90 percent of the income that is generated and is taxable to all the shareholders at least once a year. When a company is recognized as a trust investing in real estate the dividends that are provided to the share holders can be reduced.

The chairman of the Securities and Exchange Board of India (Sebi) M Damodaran on Wednesday said the regulator was considering proposals to allow real estate investment trusts (REIT) in India.

Speaking at a conference on capital markets organised by the CII, the Sebi chief also said the rules on listing and trading of securitised debt market instruments will be finalised by December.

The regulator had put out a consultative paper on securitised debt in June this year. The draft regulations proposed a system of registration of special purpose distinct entities which were planning to offer securitised debt instruments to the public or seeking the listing of such instruments issued earlier. Damodaran further said that select companies could opt for fast track issuances.

According to the fast track share issuance programme allowed by Sebi in August this year, companies with a 3-year track record on NSE and BSE, and with free-float market capitalization of at least Rs 10,000 crore, can raise funds through rights and follow-on issues, without having to wait for the market regulator’s clearance.

Sebi, at its board meeting in June 2006, had approved guidelines making it mandatory for REMFs (real-estate mutual funds) to be listed on the stock exchanges. But the absence of valuation norms delayed the introduction of REMFs in the country.

The Institute of Chartered Accountants of India (ICAI) was looking into the valuation issue and once it clears the norms, Sebi will be ready with the rules, M Damodaran said.

“It is not going to be a REIT versus REMF issue. Consultations with people who have a better understanding of these products have commenced and we will shortly write the first set of proposals,” said Damodaran. REIT is a better product, but we will ensure that both products are introduced over time, he added.

The Sebi move comes amid plans by a clutch of companies to raise funds from the Indian market for listing REIT-like vehicles on the Singapore Stock Exchange (SGX).

The Bangalore-based developer Embassy group, Ascendas, provider of business space in Asia and the Delhi-based DLF and Unitech have announced plans to list their fund structures, mainly REITs, on the SGX, banking on its recent easing of norms.

REMFs will be close-ended funds and will invest directly in real estate properties in India, mortgage (housing lease) backed securities, equity shares/bonds/debentures of listed/unlisted companies which deal in properties and undertake property development, and in other securities.

Following the curbs on participatory notes (P-notes), Sebi has received a large number of applications from overseas investors seeking FII registrations, Damodaran said, without providing figures.

The regulator is planning to launch a nationwide campaign for investor education in 2008 and encourages the market participants to take their role as self-regulatory organisations (SRO) seriously.

Nimesh Kampani, Chairman, CII National Committee on Capital Markets and the head of JM Financial Group also stressed on the need to develop SROs for financial intermediaries.

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November 21, 2007

Fortis Invest eyes Japan pension funds

Filed under: India Real Estate News Updates, Real Estate Funds, New Development — Administrator @ 3:05 am

TOKYO, Nov 21 (Reuters) – Fortis Investments, the global assets management arm of the Fortis group, is eyeing Japan’s multi-billion dollar pension funds as key investors for its two new investment funds next year worth a combined $745 million, its real estate chief said on Wednesday.

Fortis Investments, which has about 130 billion euros ($190 billion) in assets under management, will launch two new “funds of funds” — funds that hold a portfolio of other investment funds — focused on European and Asian property.

“We were very Europe-specific when we started two years ago but have diversified outside of Europe since,” Bart Coenraads, chief investment officer and head of real estate for Fortis Investments, told Reuters at the sidelines of a conference in Tokyo.

The firm currently has two Europe-focused fund-of-funds vehicles and a third invested in Asian assets.

Coenraads said he was particularly keen to attract Japanese pension fund investors as their allocations for real estate were minuscule relative to other asset classes.

“A lot of Japanese pension funds already invested in Japanese real estate now see opportunities in Asia ex-Japan,” he said, adding that Fortis Investments had already obtained a $40 million commitment from a Japanese pension fund investor for an existing fund of funds focused on Asia ex-Japan property.

Japan’s pension funds have traditionally parked their money in low-risk corporate and government bonds but are raising their investments in riskier assets such as equities and property to boost returns for the country’s ageing population. Fortis Investments has about 2.5 billion euros in global real estate exposure — 25 percent of which is run through its fund-of-funds vehicles. The remaining 75 percent of its property-related holdings are in publicly traded securities.

“Many pension funds don’t have the internal capabilities to get the sort of exposure that they can get by buying into a fund of funds,” Coenraads said.Coenraads plans to raise about $300 million for the new Asian fund of funds, about half of which will be invested in Japanese funds. The remaining portfolio will be invested in China, Malaysia, Vietnam, India and Singapore assets.

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Omaxe may tap West Asia as Indian real estate market cools

Filed under: India Real Estate News Updates, Commercial, Residential, New Development — Administrator @ 1:26 am

Source: http://www.livemint.com/2007/11/21005026/Omaxe-may-tap-West-Asia-as-Ind.html

New Delhi: Real estate company Omaxe Ltd has decided to develop properties overseas in places such as Dubai in the United Arab Emirates (UAE) as the real estate market in India starts to cool and profits get squeezed.The developer plans to build commercial and residential properties in Dubai.

“Last year was very bad for developers,” Rohtas Goel, chairman and managing director, Omaxe, said. “Prices declined by 10% and even by 30% in some locations, which has forced developers to look at overseas markets for expansion,” he added.

The company has decided to enter the Dubai real estate market as the average yearly return on an investment in Dubai is slightly better than in India, Goel said. “It is also easier to do real estate business in Dubai compared to India,” he added.

Omaxe will float an offshore development company to enter the Dubai market. Goel declined to say how much money Omaxe had earmarked for overseas development.

The company will develop real estate through joint ventures with a local real estate developer. Omaxe has to find a local developer to market property in Dubai in keeping with regulations of the UAE government. “We can acquire the land on our own, but to market the property we need a local partner,” Goel said.

Omaxe is in talks with several developers from Dubai for a possible tie-up. But nothing has been finalized yet, Goel said. In the last seven to eight months, the real estate market in New Delhi and its suburbs has seen a decline in demand mostly because of the high interest rates on home loans, which are at a five-year high. The interest rates have increased to 12%, compared with 9% just a year ago. That, coupled with the rising value of land, is making homes more expensive and less affordable—keeping buyers at bay.

“A few developers might be looking at overseas markets because of the high cost of land in India,” said Ganesh Raj, head, real estate practice at audit and consulting firm Ernst & Young India. “As return is a function of price of land, given the present cost of land, developers probably feel that returns in the overseas markets will be better. However, very few developers have actually started real estate development in offshore markets,” Raj added.

Omaxe’s plans to go global comes in the wake of similar efforts by other developers. Parsvnath Developers Ltd has decided to venture into real estate development in the UK, Singapore, UAE, Muscat and Mauritius. DLF Ltd is looking at international acquisitions, and Ansal API Ltd has a partnership with Malaysia’s UEM Group to bid for government projects in Malaysia.Investors are not willing to buy residential properties any more as the interest rates have shot up and it is costlier to buy homes on borrowed money.

Investors are gradually exiting the real estate market, say developers. While investors constituted 70% of the buyers last year, it is now the reverse, Goel said. “Now the actual end-users constitute 70% of the buyers,” he added. Omaxe is present in 30 cities and nine states in India. The company operates across residential, commercial and retail verticals. Omaxe made an initial public offering of shares in July and raised around Rs600 crore.

If you are trying to invest in real estate and need to start finding undervalued and discounted investment property, then you will need to know where to look so that you can find the deals before the next guy does. Investment real estate is a very competitive field and those that are not quick will have a hard time finding a good discount investment property. The worst thing you can do as an investor is to pay full price for a home and think that you can fix it up or flip it. Here is a guide to finding undervalued real estate and other forms of real estate investment.

The first option you have is to join a local real estate investment club and start networking with other investors. Networking is a great way to finding discounted fixer uppers because often many of these investors will have their hands full, but won’t want to just leave a good deal alone. If they know you are actively looking for discount investment property, then they will call you instead of someone else, this means that you’ll have your phone ringing telling you about deals before you can find them, which makes your job easy.

Another option you can use to finding undervalued properties, is to start paying for bird dogs to look through property listings and help find you fixer uppers. Many times, if you have a list of several people that know you are looking for property, then you can get your phone ringing off the hook by offering to pay them a couple hundred dollars per lead. You have to make sure they know what price and value you are looking for in an investment property, but once they do you won’t have to spend any time finding good deals.

Lastly, you can go through the property listings on your own and try to find the deals yourself. You can look through all of the newspapers, classified ads, and FSBO websites to try and find good deals if you feel you have the time. This can be a difficult process if you don’t know what you are doing, however if you become good at this then you will soon shave tons of time off of the process. Once you’ve created a system of how and where to find undervalued property and good fixer uppers, then you can keep repeating the process until you’ve got enough houses to keep your hands full, at which point you can help others out by passing good deals on to them.

Having a network of allies is a great way to stay abreast of the latest in the investment property scene in the area you operate. Although you can do everything on your own, you will soon realize that you hardly have enough time to perfect one area of the process, let alone all of them. Having a team at your side can make flipping houses or investing in investment property a much more profitable and successful venture than doing it alone.

Vilamoura one of the opulent towns of Algarve has lot of business potential and you too can earn handsomely from this place by investing in property here. Vilamoura is known for its beautiful coastlines, marvelous golf courses, some amazing shopping complexes and yes the very famous Marina Beach which attracts a lot of tourists from across the globe.

This place has become a heart throb for many tourists and is considered to be one of the perfect holiday destinations. Not only does it offer some really delicious cuisines, some of the best wines of Algarve, great and affordable accommodation places but the friendly nature of inhabitants of this place leaves you fall in love with this place. Hardly a drive of about twenty minutes from Vilamoura is the international airport in the capital city of Faro. Moreover, the roads that connect the rest of the Portugal with this town are in excellent condition.

The colorful beaches with rich flora and fauna and some of the vibrant pubs and other excellent places for sports and leisure activities that Vilamoura has are any tourists delight. This place is considered as one of the best places in Europe and is Algarve’s largest and most exclusive destination. The place leaves such an impact on the visitors that many end up investing in properties with Vilamoura Properties here. The mild climatic conditions existing in this region throughout the year plays an important role, as it leaves the investors satisfied that climate would never be spoilsport and thus will not affect the frequency of visitors which can have an impact on their business.

Investing in a property in places like vilamoura is often considered worthful investment as this place is frequently visited by the tourists and can help in earning some really good profits. Moreover, as the wise saying goes, investment in Vilamoura Real Estate is considered an investment that would never go wrong. There are plenty of options like villas, farmhouses, cottages, countryside houses, and many other housing options where the investments can be made. You can take the help of Vilamoura Real Estate agents to choose the best property for yourself. And to make your property a more beautiful place that will help in attracting more number of tourists, you can rely on the services of an interior decorator who can guide you in a better way. Before striking out the deal read the documents very carefully to make sure that the property is not disputed.

Often it is seen that many people visit this place just for a formal meeting, get hooked by the beauty of this place and decide to make this place their second home for the holiday seasons. You will have no regrets in investing in the property here as it has all the facilities like Nature Park where in you can go for jogging, tennis courts, very famous Tiffany’s garden for horse riding, casinos, pubs, a cinema hall to catch the latest flick and much more. Come visit this place and develop your own perception about Vilamoura.

More people than ever are looking at overseas property investment as a way to make money.

Properties are cheaper and there are some big gains to be made, but a large amount of investors when buying overseas property investment fail to balance the risk reward correctly and lose.

Here we will outline some basic overseas property guidelines to ensure that you have the best chance possible of making a solid gain on your investment.

Track record

Would you buy any investment without a track record? Probably not, but many investors do this when they buy overseas property investment.

They simply want cheap property and the biggest gain possible but this more often than not ends up in big losses.

They are tempted to buy new markets that could take off.

The big variable here is “could” Sure, if it takes off then big gains could be made but why take the risk?

1. Buy a property market with a track record

You want to know the overseas property market you are buying has a track record of solid gains and low downside risk. Property trends go on for a long time and the fact you missed the start doesn’t matter.

Buying into the trend will mean you are buying a POPULAR area and chances are it will get more popular.

2. Looking for future potential

When buying an overseas property as an investment look for solid reasons why the investment will rise in the coming years, so look for:

1. Rising foreign capital and migration to the country
2. A general consensus that the country is accepted as safe and a good location
3. There is a solid reason for the trend to continue

For example, the baby boomer generation in the US has its eyes on Central America it’s close, safe and encourages foreign investment. With high prices in the US and the baby boomer generation looking to get a better lifestyle at lower cost, the trend will likely continue.

4. An established foreign community

Gives others confidence to invest, so more tend to follow as a result. People like to be around people from their own country and a large well established foreign community will do this.

5. Getting the right location

When buying an overseas property investment look for the up and coming areas. As a market develops so do new areas and these are the ones to buy chances are they will become established areas and yield similar gains

When looking at your overseas property investment look for the above and try and buy near new significant changes in the infrastructure such as marinas, hotels, roads etc.

6. Property trends last for years!

A popular market can take a long time to run out of steam. As it develops there will always be opportunities for profit and you have the comfort of having a track record of gains and these are a guide for what future gains will be.

If we look at Central America again the Costa Rica property boom is now over 10 years old, yet savvy investors are still making triple digit gains in just a few years by buying into the rising trend.

7. Balancing the risk – reward

With the above strategy you won’t buy the cheapest overseas investment property, but you will buy competitively priced property and have the best upside potential, to lowest downside risk and that’s what most investors want.

8. Be a pioneer if you wish

If you want to buy overseas property investments and be the first in fair enough, but keep in mind the risk. Your market may never take off, or you could wait a long time.

The pioneers made big money but most fell to arrows!

If you want a solid return with low risk on your investment, then buy an established market, which is rising in popularity.

Pick your locations in up and coming areas and you will have low risk and the potential for solid or spectacular gains ahead.

Trying to find a good and ‘up to date’ property investing book can be quite a challenge. There is nothing worse than reading a property investing book that refers to property prices that are half what the current day values are. In my experience I have found that sometimes a good general investment book can be of just as much use as a specialist property investment book. Most real estate investors are actively investing in other areas so having a book that discusses real estate investing in relation to the stock market etc. can be very beneficial.What to look for in a property investing book?

The best property investing books should be written in an easy to follow – step by step fashion. It is no good if the reader finishes the book but still doesn’t feel like they have the confidence to start building their property portfolio. At times the facts and figures involved with property can become quite tiresome so it is also vital that the writer can deliver the information in a fun and entertaining way. Let’s have a closer look at three of the all time great property investing books.

More Wealth from Residential Property – Jan Somers

A fantastic property investing book that covers all aspects of how to purchase residential property. It literally covers every stage and detail that you need to know when buying your first (or 10th) investment property. Jan Somers writes in an honest and fun way and she doesn’t forget that most of the people reading her book probably haven’t ever bought an investment property before. There is a chapter that talks about renting vs. buying the house you live in and Jan mentions the fact that living in your own house can have great mental advantages that don’t come into consideration when you only look at the figures. This is a refreshing view point from a property investing professional as I often find that the writers of these property investing books can loose touch with reality but definitely not Jan Somers.

What I Didn’t Learn at School but Wish I Had – Jamie McIntyre

This book is a more general investing book but it covers some great real estate strategies. The first half of Jamie McIntyre’s book concentrates on the mental aspects of becoming a successful investor. He calls it developing the mindset of a millionaire. It is easy to want to skip over this section of the book but I promise you that if you haven’t developed your mental investing muscles then no matter how many great strategies you have you will find it hard to succeed. Whilst Jan Somers book goes into the real ‘nuts and bolts’ of Real estate investing this book covers some more elaborate and interesting strategies.

Go For Your Life – Chris Grey

This is a very underestimated book that didn’t receive anywhere near as many accolades as it deserved. It is basically a combination of the above two property investing books. It shows how Chris slowly bought the 6 investment properties that he currently owns.

You might be saying “6 properties – that’s not enough to write a book!” But this is the exact reason why it is such a great book. He explains how you don’t need to own 100 houses to be a successful real estate investor and enjoy the luxuries of life. By owning a handful of properties he has been able to obtain his dream lifestyle. So there you have it 3 great property investing books that you should definitely read before or after you start building your property empire.

All of them are filled with great property investing tips and secrets that will help you achieve your goals. The only thing missing from these books and form every property investing book ever written is the magic ingredient that makes you actually put the strategies into action. You will need to find that yourself! You can read as many books as you like but if you don’t ever take some action then you won’t ever achieve the success that you would like.

So what are you waiting for? Start taking action today by reading one of these books and then when you are armed with the required knowledge take the next step and start your investing career.

If you are a novice property investor looking for information on investment properties for beginners, this article should help make your life easier. It details eight tips that will help you in your quest to become a landlord.

Don’t believe the hype. It doesn’t matter if it is negative or positive hype about investing in property; do not take anything at face value. Always consider whether the person or media that is putting out the story might have ulterior motives.

Anyone interesting in selling you property or property products will only talk about the positives and the value of investing in property. The media likes to sensationalise the negatives, because that is what sells newspapers. You have to look at the evidence and seek impartial advice and make up your own mind.

You have to believe. You have to have a belief that you can make money from property. At times it can seem as though the property investing World is already saturated with people more experienced than you. You have to believe that there is room for you as well.

If you start off with negative self belief then you are on a slippery slope to failure and before you know it you will be another one of those that have “tried” property investing, but found that there was no money in it.

Decide why you want to invest and formulate a strategy around this reason. Being clear why you want to invest in property can create compelling reasons that will push you forward towards your goals, even when things are not going well. Once you know why you are investing you can then build a clear strategy based around what your goals and aims are.

Research and make sure the figures add up. Don’t just dive into investing in a location because you have heard a rumour on a forum that it “might” be the next property hot spot. You need to do your research and your own due diligence.

It will be hard work to begin with and it might take you several months to find the right location and the right type of property, but after that you can probably continue to invest in the same location for several years, so the initial hard work is well worth it and should pay off in the end.

It’s a numbers game. You have to be prepared to look at hundreds of properties to find a deal that meets your criteria and that corresponds with the strategy you have set out. This doesn’t necessarily mean making hundreds of phone calls a month to different estate agents or vendors.

You might achieve your goal by simply browsing the local newspaper which normally has at least a couple of hundred properties in, although a more proactive method is usually needed to be really successfully.

Have effective exit strategies in place. One of the main reasons many beginners fail in their efforts to become professional property investors or developers, is that they don’t have exit strategies in place.

You need to know what route you are going to take to get out of a deal if things do not go according to plan. You also need to have an idea of how you are going to off load the property in the long run, if you don’t plan to hold onto it forever.

Take a long term view. Successful property investors take a long term view of the property market. Many of the budding investors that have failed, have failed because they wanted to make a quick buck. If you are serious about learning how to become a landlord and being financially independent, then you have to take a long term view. This will help minimise your risk and will stop you from wanting to bail out if the property market goes through a bad patch.

Be careful of using property investment companies. There are a host of companies that claim to be able to buy investment properties for beginners, so that novices don’t have to do any of the work themselves. Some of these companies are good, many are terrible and a few are crooks.

I would advise you to learn the basics about what equates to a good property investment first, before you trust others to buy investment property for you. That way you can access the properties that they put in front of you and you will be able to tell if they are good or not, without being totally reliant on what the investment companies tell you.

If you are a beginner to making money from property, then by following the tips laid out here, you should be more equipped to go out and start hunting for those bargain properties. Keep in mind that people progress at different speeds and don’t get caught up in the thought that if you don’t become a millionaire in one month through property, then it’s not going to happen.

Find your own pace. However, make sure that you are also pushing yourself and forcing yourself to get out of your comfort zone because this is where the real growth, learning and wealth happens.

Jorge and his crew have been working to meet the city’s demands and get the house ready for market. Take a tour with Real Estate mentor Darin and Investment student Jan through what has been accomplished in only one week.

Property investment has become a boosting choice for people looking for greater freedom in how they spend their interim time or how they invest for the future. If you planning to purchase Investment Property there are many choices in the internet which give you access to the biggest selection. Auction property investments, Off Plan Property Investments, Distress Sale Properties, everything the property investor requires under one online property marketplace.

Recently, the media has reported that most areas in UK have listed rates shrinks, with property investments in Greater London taking the sharpest drop of all. These estimations may be sourcing some people in the UK to question if it is still in fact a perfect time property investments.

Stories of a property investment crash in the UK have been constantly in the news for quite some time now. But many property experts are of the certainty that the property market will remain solid. The reason behind this is that the deliver of property is inadequate to meet demands not to mention the fact the property is still affordable.

When the prices falls or when there is a decline in asking price, there is always a group of ready investors that are inclined to pick up bargains. These comprise of people such as first time investors, family movers, or property investors seeking property investment deals. The justification why there is a ready supply of investors is because there is a essentials under supply of property, as the current number of completed establishments is running below demand.

The intensifying demand for a deteriorating supply of property investment will produce prices to remain firm. Even though unsold properties have been reported to rise, the unsold stock levels are expected to remain below the long-term trend. Immanent migration has increases drastically due to the attraction of the UK as an excellent place to work and live in.

Additionally, there are also two suitable circles that make the decision in property investment is a sound one. Evidently, no issue which way the UK economy turns, property investment market is still expected to stand out, most especially over the long term. First, when the economies of the world enter another recession or denigration, then interest rates could come down, further decreasing property investors’ expenses, while retentive the rental revenue. Second, if the capital venture of property investment takes a fall, then people will terminate purchasing investment properties, and rent alternatively. The growth in rental demand wills then surprise in property investment income.

A lot of people are making real money with their residential property investment portfolios.

While the concept can be daunting to new investors, the key to making money is simple.

And who doesn’t want to make money?!

You may already know just how simple it is, but if you haven’t, here is a quick guide along with some helpful tips.

A lot more than luck is required to make good investments of any kind. Really, with any investment the more you know the better you’ll do. With that in mind, you can study up on the basics of residential property investment. Nothing is more valuable than money, and the best way to protect and increase yours is with a solid strategy.

If you’ve done your homework and are ready to take the next step, then that means you’re going to be viewing a lot of residential investment properties. The number one mistake first-time investors make is buying into the hype of so-called hot properties, and overseas properties are all the hype right now. Sure, having the ocean in your backyard sounds nice, but that’s for tourists not for property investors.

For some new investors, the prospect of making their first residential property investment is overwhelmingly exciting while others feel only anxiety or fear. Both feelings are normal but letting your excitement override your good sense can prevent you from making the best investments, and letting fear hold you back can keep you from ever getting started.

Begin by considering the following questions:

· What are you really looking to accomplish?
· What type of long-term goals have you set?
· What are your expectations?
· What type of finance options do you have available?

Is Income or Capital growth, more important to you? Or perhaps both?

When buying and selling investment property, each investor will have their own goals and strategies. Regardless, many still fall for typical sales lines and enticing new deal offers over and over again. The best advice for new investors would be to start by determining and focussing on their investment property strategy goals. The following four basic options to property investments are:
1. Flipping Property – In order to profit from the sale.
2. Buying Development Land.
3. Invest in “Income Generating Property” in the “Buy-to-Let” and “Commercial Property” markets.
4. Invest in Property Development Companies.

Once you have decided which investment property strategy is best for your specific situation and goals keep the following business factors in mind: Consulting with most Professionals may seem like a good idea. Just remember that you should see your solicitor for legal advice, your bank manager for financial advice, your accountant for tax advice and your local real estate agent for actual property investment advice and also for any tips on where to find some of the better investments. Use professionals specifically in their areas of expertise only.

Lastly, beware of the media and incorrect and often misleading information. Stay on top of the property market by following top sources only.

What is an investment property?

An investment property is a land or place, which is sold or bought for different spatial functions, which is carried on for a long period of time. By investing a property, people are able to gain more profits because a land’s value increases over time.

Getting or acquiring properties has become very popular across different societies all around the world. Investors in the stock market seem to be very excited with the results of their stocks at the end of the day because of the good effects brought about by many investments.

For a person who decides on getting an investment property, he or she must be able to determine for what purpose should this property have. In that case, knowing the different aspects of getting a property is very important. Location, accessibility and budget constraints are just some of the facets that one should consider in getting an investment property. Of course, you would rather want to have your investment property stand the pillars of time than it be wasted just because of some poor conditions such as environmental, economic and others. Thus, it is just very essential that a person have the right knowledge in property acquisition. By this, good research on the real estate industry as well as a attentive and keen look on the market should be done.

Things you need to know in looking for a good investment property

In looking for a good investment property, one should be able to know the span of time the land will be used and for what purpose. By this, you will be able to plan very well your strategies in utilizing the property that you would like to invest in. Remember that time is very important especially in investing a property. The longer you would like a property to serve a certain purpose or function, then the greater the rate of maintenance and improvements you will need to keep your property in good, working condition. Moreover, you will have to invest as well with the different features that will help enhance and improve the scale of your property’s usage such as appliances, furniture pieces, furnishings and accessories that will keep up with the trends of the current time.

Next, you should be able to set up a bridge amongst different people who may help you in knowing which properties are about to be sold. By this, you will have a list of different properties, which you can acquire to make a good investment. Aside from depending on your colleagues, you may also try searching on your own. Finding different prospective properties with your own effort may help increase your knowledge on the different site locations and features which can help aid you in your decision to choose which among the properties you will invest in.

Lastly, you should check if your finances are in good shape to accommodate the different price ranges that might come along the way in your search for a good property to invest in. Remember, looking for a good investment property needs to have a good amount of budget on the part of the buyer. If you want a property, which you need to last for a long time, then you will probably have to spend a lot of money to have it in your possession.

Property investment has always been considered an attractive option for many people in the UK who are seeking financial freedom. Even with the perceived stabilisation of the property market, property investors still consider the investment vehicle a viable one now that prices are declining and yields are going up.

The rationalisation for this is that the buy to let sector in particular is presently undergoing rising rents and shorter vacant periods – two factors that bring about lower voids compared to those of typical borrowers. Furthermore, by purchasing discounted property from distressed and motivated sellers, there is potential to earn instant profits from day one.

What buy to let offers property investors

Investing in property, particularly buy to let, offers financial benefits in the short, medium and long term. In the short to medium terms, property investment offers various tax efficiencies. For the medium term, property investors can benefit from increased rental income brought about by inflation and the rise in market rents. For the long-term horizon, property provides capital growth. Capital growth is the increase in value of your property portfolio over time. It refers to the money you make as the value of your property goes up in price.

Why buy to let remains popular

Here are the factors that contribute to a healthy demand for buy to let properties:

* Immigration. One of the reasons that buy to let has become a widespread investment vehicle is due to the rise in legal migration to the UK. A survey from Paragon Mortgages revealed that migration is adding to the UK’s population by 0.3% annually.

* Household shortage. According to the Department for Communities and Local Government, the UK needs more than 200,000 households a year to meet the housing demand. However many property experts say that there is a major shortage in housing supply.

* Social trends. The divorce rates in the UK have risen significantly: In 1980, there were 148,500 divorce cases in all of UK. In 2000, the figures climbed to almost 200,000, an increase of more than 30%. There has also been a considerable increase in the number of people who stay single by choice and enter marriage later in life.

What to consider before investing in property

* Where to buy: Property experts suggest that you look up historical data and consider the pattern of capital growth over the last 10-20 years. This will help you determine whether the location you are interested in buying property in is worth the money. Your main goal of investing should be to achieve long term capital growth.

* What to buy: When investing in property for the long term, you need to think about what type of property to buy. Some experts recommend apartments since these establishments have high initial returns and require low maintenance usually.

* When to buy: The time to buy property is as crucial as actually purchasing it. Considering that it is impossible to know when prices are going to hit rock bottom, some experts claim that the best time to buy is now.

For you to thrive in property investment, specifically buy to let, you should be able to find the balance between obtaining the best out of your property and effectively managing spending. It is similarly crucial for you to ensure appropriate rental cover and a suitable mortgage product. But most significantly you’ll be able to get the most out of your property if right from the start you have already earned profits from it – which is possible if you buy the property at a below market value price from a distressed seller.

Real estate is a big business and everyone seems to want to invest in real estate. You keep hearing a lot of stories about how people made a quick buck by investing in real estate. There are stories about people who made $50000 in a fortnight by making the right kind of investment in real estate. Every now and then, newspapers keep coming up with statistics about the appreciation in the real estate prices. There seems a mad rush for investing in real estate (and this gets even bigger when the mortgage interest rates are falling). However, not everyone has the time, money and expertise to be able to profitably invest in real estate. So what does one do? Is there any other option?

Yes, there is another way of investing in real estate and that is through Real Estate Investment Trust. Real Estate Investment Trust is an organisation that invests in real estate as a full fledged business. By investing in a Real Estate Investment Trust, you can become part of the real estate investment party and enjoy profits (of course, the assumption here is that the Real Estate Investment Trust is good and professionally managed).

Investing in Real Estate Investment Trust is very easy too. You can just buy Real Estate Investment Trust shares which trade on all major exchanges. There are certain laws governing the Real Estate Investment Trusts that help them avoiding the tax at corporate levels e.g. it is mandated that Real Estate Investment Trust’s portfolio has 75 percent of investment in real estate. Moreover, 75% of the income of Real Estate Investment Trust must be from rents or mortgage interest. There are various types of Real Estate Investment Trusts. Some Real Estate Investment Trusts own properties themselves and hence feed on the rental income from those properties. Some others indulge in providing only mortgage loans or go for mortgage backed securities. Then there are Real Estate Investment Trusts which do both i.e. rental focussed investments and mortgage based investments.

There are a number of Real Estate Investment Trusts operating in the market and a lot of these Real Estate Investment Trusts are doing good business. By investing in Real Estate Investment Trust you are basically investing in real estate without actually buying a property yourself. This is one easy way of investing in real estate (and much safer too). You must surely evaluate this option for your real estate investments.

It has been very interesting to see the different reactions from investors to the credit crunch and subsequent reduction in available finance available to property buyers – which has had a knock on effect on house prices.

We are seeing investors generally falling into two camps – those that see this very positively – the Can do-ers, and those that have decided it is a good time to sit back and do very little – the Can’t do-ers.

The investors with clear goals and “Can Do” attitudes are getting on with it and seeing things in a very positive light.  It is well acknowledged that in the UK it is a buyers’ market – and this is offering some terrific opportunities.  The key is understanding what makes a good deal – whether it is offering a high rental yield, low money down, undervalue, or in area showing strong capital growth – and what fits in with your personal strategy.

It is important to remember not all property deals will suit all investors ie one may be most interested in rental return, whereas someone else may be more interested in low money down.  However all investors will want to buy a property that over the mid term is going to go up in value – and so it is important to choose property that has a good chance of doing this.

While some investors have seen their local areas slow down – they have then realised there are some fantastic opportunities worldwide – and some economies such as Czech Republic or Albania growing far quicker, and property markets at a completely different stage of the cycle offering huge returns.
I am pretty clear on my thoughts on the UK market – based on current interest rates, and current salaries in the UK – with an average salary of around £21,000 – house prices up to £100,000 have a very good chance of rising in value over the next 5 years – as they are very affordable – so for me these are the logical markets to target – and they have done very well over the last 5 years, and will do over the next 5 years.  With the average house price in the UK being over £190,000, then I would have thought most of the UK is over valued – and so the average property may well drop or at least be fairly flat for the next few years – which is why it is important not to target the average property!

The key though is my viewpoint hasn’t changed all of a sudden – and has been based on the same economic principles that have done me well over the last 7 years.  This is apparent with most investors who continue to do very well – they have not varied their viewpoints too much, but have been able to adapt with the times and changes.  For instance when borrowing rates went up recently, and more than expected – you had to adapt accordingly either by increasing rents, which has happened in many areas of the country – or by looking for higher yielding properties in the first place when buying, or putting in a lower bid to cover increased borrowing costs.

What has been very good for investors in the right areas is that the sellers, who may well have a very good value property in the first place ie under £80,000 also read the same papers, watch the same news and listen to estate agents – and have felt under pressure to also reduce their asking prices!  This has been very good for buyers – as even though these properties are already undervalued – the sellers have been influenced by the media and are willing to take reductions in price – this can be used to our advantage!  As I have said in the past – securing a £200,000 property at 15% below the asking price is hugely different to securing a £80,000 property 15% below the asking price – as with the lower priced property you will see a far stronger %age return on investment over the next 5 years.

So there are so many good reasons to ramp up your investments at this stage – and many investors are.  It will depend on your own personal belief levels, and confidence.  It is no surprise when we do our workshops that those with clear, written goals are the ones who are achieving the most.  At our most recent one in Manchester, was a lady who has bought 30 properties this year – she has a strong Can Do attitude and has gone out there and done it. 

Most investors are naturally Can Do people – which is what separates them from everyone else in the first place – but beware you do not become a Can’t Do-er if you want to achieve your goals!

Cant do-ers

What makes a Can’t do-er?  Usually it will be someone who has got into investing as it sounded good at the time – but probably was not mentally prepared, or had all the skills and knowledge required initially to invest successfully, or has a poor peer group, who are very negative.

At the first sign of trouble, they have used this as an excuse to get out of property, or scale back their initial plans.  Unfortunately most people have a lot of negative influences around them – family and friends are usually the worst! Partly they want to protect you (although they are unclear what they are protecting you from), and partly they are scared you are going to go and do something outside the norm and be successful – and leave them behind.
Many potential investors, or actual investors, go into investing without a clear focus, mindset and strategy – and then get put off immediately something goes wrong, or something unexpected happens.

It is like running any business, you must be prepared to deal with different consequences – both good and bad.  In buy to let, you will at times have an issue with a tenant, or a managing agent – and you will see some properties perform less well as expected, just as you will see some properties perform brilliantly – this is no different to every day life and business.

It is always frustrating to see people give up in life too easily when they set goals eg getting fit, losing weight, or buying 10 investment properties – but then again for the rest of us it means there is more opportunity!

In life to get the rewards of success it will always take hard work but it will be well worth it – it amuses to me to see resentment of film or sports stars earning a lot of money – why resent that?  These talented individuals are at the top of their game and bring pleasure to millions – and so are worth every penny.  Likewise in property – those that are doing the best will be the investors working the hardest on their strategy, and staying focussed to hit their investing goals.

Fortunately the vast majority of property investors are Can do’ers, and this has always been a big attraction for me – ie investors can bounce off each other, and encourage each other.  Generally investors know why they are investing and why property investing is the best way to build up mid term wealth for almost all individuals.  That is why every year in the Sunday Times rich list in the UK – the biggest %age of people in there will have made their money in property and this will continue year on year – as investors will continue to look for new opportunities.

Yes at times, you need to tweak your strategy ie look outside your home town, and consider Overseas, fast moving property markets – but the key is to remember whatever the newspapers tell you this year successful property investors will again do very well – and property markets around the world will continue to rise in value with double digit growth – which when leveraged will give phenomenal returns.

If you would like to discuss your strategy, or need to re-focus on what are trying to achieve, why not have a chat with one of our Portfolio Development Managers – and see how they have helped investors go from 0-10 properties in a very short space of time, or helped investors re-align their strategy with the current market conditions.

Rentals have continued their upward climb down and are predicted to go even higher as certain factors that kept the rental market healthy continue to have an impact on the rental figures in the UK. According to figures from the Royal Institute of Chartered Surveyors, the demand for rental accommodations has continuously increased due to the stabilisation of property prices and the tightening of mortgage lending conditions. This bodes well for the property investor looking to add to his investment property portfolio.

Where to buy investment property

Buying a property despite the credit crunch may seem a disadvantageous move. However, according to investor 1st Asset, there are two markets that a property investor can look to. 1st Asset states that properties located in super-prime locations such as west London are worth considering. Areas that are set to receive major new investment boosts are likewise considered by the company as an excellent option. An example is east London which is being primed for the 2012 Olympics. For you to be able to take advantage of these areas, it’s best if you get in the market quickly before the spotlight is directed at these markets and before buyers start to move in and prompt the increase of property prices.

Advantages of buying today

If you’re looking to make a property purchase, today is a good time to go ahead with it. The reason? Stamp duty amongst many other things. Recently, the one per cent stamp duty threshold was increased from £125,000 to £175,000 for a period of one year. Because of this, many property buyers had the opportunity of paying lower stamp duty and significantly lowering transaction costs – which of course translated to considerable savings. Another good reason to buy today is the emergence of the buyer’s market and therefore, the abundance of affordable properties. The current property climate has led to a rise in the number of repossessed properties, which are often sold cheaply.

What investment property to consider

With the increase in rents, it becomes sensible to invest in a buy to let investment property. It’s true that the media is painting buy to let properties as investment vehicles to stay away from. However, the Council of Mortgage Lenders recently expressed its belief that the media representation of the fall of buy to let company Bradford & Bingley is erroneous. The media portrayal of the firm was thought to have caused a furore among many in the industry. CML released figures for the first half of 2008 that showed a lower proportion of buy to let mortgages in arrears of more than three months compared to residential mortgages. Apart from that, CML data indicated no difference in the rate of repossessions.

When buying an investment property for conversion into a buy to let, you should consider obtaining it at a price below its true market value to enable significant savings from the day of purchase. Acquiring a BMV property is possible by finding sellers motivated enough to agree to sell for lower than the market value of their properties – some define this as the price an estate agent could reasonably expect to achieve within three months of marketing the property. Once you have found such a property, you’ll be able to take advantage of 100% financing from several private property investors ready to finance your investment.

What are the returns from letting property?

According to the Association of Residential Letting Agents, gross returns vary between 7% and 10% and will be lower for pricey properties. ARLA adds that the average rental return in Britain today flits around the 10% mark with the capital appreciation expected to match, if not surpass, inflation for the immediate future. As a general rule, the gross rents should range between 130% and 150% of the monthly mortgage payments.

Investing in property today may be regarded by some as unfavourable. But if you do your homework, make the necessary preparations and invest for the long term, you can be on your way to a successful and thriving career in property.