2009 – A year when then the smart investor used their time to set them up for 2010.

I think you will be in the minority if you haven’t suffered some kind of hardship this year, many investors have seen thier dreams of retirement severely set back.

This has not been confined to property, if you had shares or your money in some banks you could be in a worse situation!

So what should this year have taught the average investor?

1. The only way to build a profitable portfolio for the long term is by investing smart.

For me that means keeping at least 20% worth of equity in any property so you build yourself a buffer to combat any drop in values.

Investors have been stung by dropping loan to value rates, an unwillingness by lenders to remortgage on to rates previously offered has seen investors have to increase the equity in their properties, leaving them severely stretched.

Over the last 2 years i have seen investors with portfolio’s worth in excess of £100m go bankrupt, how can this be i hear you say.

What some property investors seem to misunderstand is that if you have a portfolio worth £100m, with lending on it of £90m. You actually have a portfolio worth £10m. If property prices drop 10%, what is the worth of your portfolio…Nothing!

If this happens you are entirely reliant on the income that your portfolio brings in, investors too highly geared normally cannot withstand more than a couple of months of empty properties.

2. Property Investment is not a get rich quick scheme – investors that use it as such usually find they have leveraged too high.

I am one of the biggest exponents of flipping property, i think that if you have the time and the know how it is possible to make decent profit this way but it is entirely dependent on a couple of factors.

Firstly, you need a massive amount of knowledge of the local market, this is not something that can be learnt quickly, so for this reason either keep to one area or find yourself a property specialist that you trust completely.

Secondly, always have another exit strategy, so if you are buying to re-sell, make sure that if worst case you can’t do this immediately, you can let the property out and pay your mortgage that way.

I have refurbed properties for over 6 years and we are also in the middle of developing apartments, i value every property investment opportunity by the number of exit strategies it provides.

3. The good times will come again, use times like these to research the market and decide where the best profits will be made next year and in the future.

If i could focus on the single most important factor i have taken from 2009 it’s that within the next month or so the vast majority of new build developers will completely run out of stock.

At Fresh Invest we are in contact with all major new build developers and 9 months ago all of them decided to stop all build that wasn’t already past footings. This decision was made because the last thing the market needed at that point was more new build stock. They are all building again now but this has created a back log where all finished sites have been sold and the next tranche of stock is still around 6 months away.

We have seen average discounts reduced from 40% 9 months ago, to 15%-20% now, and thats if you can find any stock. We have 2 developments left on our books which are selling at around 2 a day.

The first 6 months of 2010 will see property prices increase due to a lack of supply and increased demand as more confidence seeps back into the market.

I would take the first few months of 2010 to pick up the last pieces of good quality discount property around, there is only 1 way values are going to go in 2010.

New Opportunities through Fresh Invest:

1. We are launching a scheme that should give clients access to lender stock, for property investors looking to pick up great quality buy to let property in a particular area this is the one!

2. We are working hard on some student schemes, these should yield over 8%, have really low interest rates and start at around £80,000. With massive demand and industry professionals flocking to this market this is definitely one for the future!

The recent drop in the base rate has had a dramatic impact on peoples pensions and savings, this is a fact..

So what are these people doing to alleviate this problem?

The answer more often that not is nothing.

I think the british public faces a real awakening when they stick their heads up above the sand and look at the state of their pensions/savings.

Now my job is to sell property, that is what i’m good at and that is what makes me money. In this market it should be the easiest sell possible.

My pitch would go somewhat like this….savings making you 2% max, pension value has collapsed and shows no sign or changing, buy a 2 bed flat in a good location and secure between a 5% and 9% yield along with long term capital growth.

Anyone that has ever sold property for an investment knows the challenges we face regards peoples perception of this as an investment. It is widely known as a high risk investment with fantastic gains but also devestating losses.

Now i would argue that if you do not over expose yourself, take a long term view and purchase wisely there is never a bad time to buy property.

The point remains the same, if you want your money in a fairly safe long term investment vehicle, do you really have a choice?

Well, interesting news at Fresh Invest.

A while ago we realised that there is a gap in the market for a portfolio management company that not only collects the rentals and conducts rent reviews, but also takes an active interest in the property that is contained in the portfolio.

We found that many investors simply go to a large letting agent and hand their portfolio over in it’s entirety.

Through our relationships with some national letting agents we have managed to agree a significant discount off of their fees.

What we propose is that we let our letting agent take over the day to day management of an investors portfolio whilst we conduct monthly reviews of your property, recommending selling or buying specific property.

As a property investment company we believe we are ideally positioned to take advantage of potential growth areas before they are hit by the investors. We also hear when some areas are overpopulated by investors. Giving our portfolio holders this information can prove invaluable.

Let us know what you think about this idea…