The future of property investments

Sealy

Hi, I'm keen to get people's opinions on the future of property investments. I know for the short term, things don't look good but in the long term, I am seeking to invest in property to maximise returns. The old money making fad over the last few years was buy to let. This is going out of fashion now, whats next?

Sealy

Pennywise

The clients I have who are still making money out of property are doing something different, or thinking outside the box I think they call it.

They are buying a property, but not doing what everyone else has been doing, i.e. not just decorating, new kitchen, moving the internal walls around, but completely reshaping the property and turning it into something different.

There's one person who has turned a couple of semi's into four self contained holiday apartments, and sold all four quickly for a handsome profit. Another guy has demolished a house with a garden and turned it into two smaller houses with smaller gardens. Turning basements into garden flats is also something to add value.

The days of making money simply by modernising an old property are over. Now you need a vision and courage to turn the property into something very different.

Conrad

error - hit the wrong bitton

chappers

If your aim is a long term investment then still no reason not to invest in BTL, as has always been the case, if the figures add up with regards to rental income over expenditure then why not.
You may want to hang fire for a bit though to see whats happening to the market, because you could save yourself a few quid.
Following the latest fad isn't the way to think you should be thinking ahead of the game or else investing in something tried and tested.

Conrad

Sealy Ive been a long term property investor. I have not gone in for refubs / development yet as the income I would lose my not concentrating on my core business (mortgage shop) would make any gains on a development too low. Oftne builder tell me they may a pile on a property but they fail to factor in thier own loss of earnings, so really the return was probably no better than had they just carried on working full time instead.

I've more recently diversified into German property where I think the bottom was reached a year or so back. We picked up a block of flats for rock bottom price and are having it refurbished which we think will result in an income yield on capital over over 20% (thats about 4 x higher yield than UK property).

Our real passion though are for the new 'super - developments' in the Med on Moroccos coast. I think they eclipse anything in Spain (7km away) and offer masses more facilities onsite for a much lower price. They are secure Government backed otherwise I wouldnt be involved.
Really forget all these eastern block places and Turkey - they cannot compare to this new breed of mega resort in Morocco.
For example the development Ive bought on has the biggest marina in the Med and up to 500 shops plus its own sandy beach, own hospital etc etc - just leagues ahead of anything in Spain / Portugal. We expect year round rent - hassle free all doen for you


Or buy a UK B2L if the prices fall enough to generate a 7.5% minimum yield after ALL costs - dont forget the lost interest on your 20% deposit is a true cost to be accounted for.

mlz1413

depends what your long term is, if it's 10 years and everything you have depends on it, then as with any investment you could do well, break even or be in big poo.

If your looking at 20 years and it will add to a pension or give you something to leave to your next-of-kin then I would say property is a fair bet.
But no one knows the future all investments come with a risk.

Conrad

BTW - in my early days I thought capital growth was the aim, but now I seek the highest possible income yield which means if there is limited growth you still make a healthy income return. Just buying for growth I found to be a fatal flaw.

High income yielders should be by definition good capital appreciators also.
Remember if you buy abroad - the trick is year round rental so please forget most of Spain, all of Bulgaria, Turkey or Portugal.

Sealy

Growth is all relative though right?

Just out of interest, are most investment properties bought with big mortgages? I know of some friends who own a lot of properties but don't seem to have that much cash. I think they may be riskily getting mortgages secured on the other properties. Is this common practise?

Conrad

I started out myself getting 2 x 95% mortgages but now a days that would not work as the rent would'nt cover the mortgage and dont even think about 'topping up' each month yourself.

I suggest you talk to lots of mortgage brokers - there are many ways of skinning the cat.

Dont rush into buying, prices WILL DEFINIETLY FALL FURTHER. Im thinking this Xmas could be a good time to start looking - when you'll be amongst few other buyers so you will hold the whip hand