Lack of property boosts asking prices
I’ve done it again!
If you remember i blogged in september regarding a lack of supply leading to increased prices, well it seems mortgage solutions agrees……better late than never! See their article here.
I personally i think they missed the biggest point which is the slow down in new build development. But you get the same result.
We still have a few new build developments with discounts available, if you are looking for a property investment click the link!
Another option is to buy a student property, some of our wealthiest investors specialise totally in student accommodation investment. A couple of them have yields close to 20% on massive portfolio’s!
Some investors don’t like the hassle of student property but if you have a management company set up all you need to do is collect the profits!
Dunas Beach Resort, What our investors say…
For months we have been talking about how great an opportunity Dunas Beach Resort is, it has obviously worked as we were overwhelmed by the amount of interest we have had in this overseas investment opportunity.
We thought prospective investors may like to hear what previous buyers had to say about this investment.
Mrs Carole Winters – Shrewsbury.
“In 2009 we approached Fresh Invest initially looking for a holiday home, we had a budget in mind but were aware that we were stretching ourselves, however we knew that if we did not buy now then we may never have!
Over the next month or so i had various conversations with Dan regarding various properties in various locations. In the end we settled on Cape Verde and Dunas Beach Resort. We loved the idea that we could invest in a good size 1 bed apartment with just £32,000. We were also very interested in the equity release scheme which mean’t that we used £30,000 worth of equity in our home and topped up the £2,000 ourselves!
Seeing as we had set aside money to buy the flat, to know that we could use equity in our house was a massive relief to us.
Dan gave us a financial breakdown on the apartment based on comparables in other developments showing that we should look to make at least £6,000 per year after all costs including mortgage payments. He also showed us what we could mortgage the property for on completion, at the moment it looks as if we should actually be able to pull out all of our deposit on completion!
We have decided to enter into the hotel agreement meaning that Sol Melia will take care of all rentals ensuring we get the best rates for our apartment. We also get 5 weeks use of the apartment for free.
Since then we have found out that Dunas Beach has been upgraded to a 5* resort which was great news.
I have to admit the investment was a little daunting in the first instance but once we got our heads around it the process started to make sense.
Now we are looking forward to a lovely apartment that has cost us £32,000 that we didn’t even know we had and receiving 5 weeks use and £6,000 per year! thanks Fresh Invest!”
….Just one investor that took advantage of the various money saving options on Dunas Beach Resort!
Thinking about investing in multiple units?
Finally a sensible policy for the purchase of multiple properties has been mentioned by the government, which should give the buy to let market a boost.
Rather than buy to let investors paying stamp duty for an entire bulk purchase, the government is looking at charging bulk buyers per individual property. Because of this, bulk purchasers of property are more likely to stay below thresholds for higher stamp duty rates.
Current stamp duty rates are as follows:
£125,000 – £250,000 = 1%
£250,000 – £500,000 = 3%
£500,000+ = 4%
See below for some figures on how this new policy would help you if you are looking to purchase multiple properties.
The current figures:
10 properties @ £150,000 = £1,500,000
Current stamp duty bill = £60,000
Anticipated figures:
10 properties @ £150,000 = £1,500,000
Anticipated stamp duty bill = £15,000
As you can see, on this particular transaction you would be saving 75% from your stamp duty tax bill!
Another new policy from the government could lead to barriers for Real Estate Investment Trust’s being lifted, this would allow REIT’s to invest in residential property and owners would hold shares in actual bricks and mortar rather than the REIT itself.
For a list of our bulk investment opportunities see here
See the article in The Times here
Spending cuts for universities….Great News for investors!
The UK Government has announced they are looking to implement spending cuts in the region of £350m for the 2010/2011 academic year.
Now many people may think this is a major set back to investors investing in student accommodation, but in actual fact that could not be further from the truth.
What this actually means is that Universities have to concentrate their funding on their core facilities. For instance, up keep of their academic buildings is obviously very important, where as building accommodation for students is secondary.
You may argue that without the accommodation, attendances will drop. Actually this may not be the case.
What the university is hoping for is that third party developers will step in and build for them.
This has always been a much maligned area for Universities because they know that the more accommodation they own, the more revenue they will generate.
Problems arise when spending is cut, they can’t afford to develop so are almost completely reliant on commercial developers.
In short, third party commercial developers have the universities over the proverbial barrel!
Take a look at our Student Property Buyers Guide for more information!
