For example...

You buy a property for £150,000 and are able to arrange a mortgage for 85% of the value. You go ahead and purchase the property with a £22,500 deposit of your own funds.

On the basis that property prices double in value on average every 10 years (8.2 years since 1946 in the UK) we can estimate that in 8 to 10 years the property has doubled in value. Further, assuming that the rental income has covered major running costs, including mortgage payments, the same property is now worth £300,000.

You sell the investment property and pay back the £127,500 mortgage (as you'll have
had it on a interest only basis to keep running costs low) and retain the £172,500 balance, £150,000 of which is capital growth profit.

Even taking out legal fees and taxes payable it's still a much better return than most other investment vehicles. The cost to you is that you've had £22,500 tied up in the property.

This example shows why, on a risk vs. reward basis, property remains one of the best investment propositions available in today's investment arena. Investments like pensions and stocks and shares have performed poorly and have left many people with an unsecured financial future. That's why so many people are turning towards property to secure their own financial future or using property to give loved one's greater security or a hand to get on the property ladder before prices are pushed beyond the reach of first time buyers.

3 Key Stages of Property Investment

As with all Investments, you need to keep in mind that each one has 3 stages. The Entry, The Management & The Exit. Property investment is no different, but has different considerations from other types of investment and it's these considerations, or the perceived hassle of these, that makes people feel that Property Investment is a higher risk than it in reality, it actually is.

The Entry

What's the price, is it below market value, what's the historic and predicted Capital Growth, can I get finance (mortgage) for this investment?

The Management

How and who do I rent to, do I employ a letting agent, how do I furnish the property, what about repairs, maintenance and tenant letting? Always research these costs and document them, things often look different when written down.

The Exit

The important stage that many forget, you can't liquidate your assets if you can't sell them.

How sellable is the property?

Will it sell to a owner occupier or another investor?

Is there a lot of other similar property up for sale in the area and what are the costs of selling?

If you require assistance from a well established and reputable property agent, we can help you contact one. I.B.A. member property agents are amongst the most experienced and professional within the industry and can accommodate all your investment requirements.

Simply complete the "Assist Me" form below and we will forward your details to the most appropriate agent.

"Always make sure the property agent you select is an I.B.A. member"

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