Over the last 18 months, Landlord Action, leaders in helping landlords with problem tenants, has been instructed on a growing number of squatting cases fuelled by the huge proportion of properties sitting empty across the UK.  After the broadcast of Channel 4’s ‘The Great British Property Scandal” highlighting the gravity of this problem, Paul Shamplina, founder of Landlord Action, supports the challenge to get more empty properties back into use as he believes this will reduce the number of squatters taking up residence in private properties, which has a detrimental effect on homeowners and landlords.

Paul comments “We have been instructed on a growing number of squatting cases by property owners, owner occupiers or professional landlords wanting us to deal with squatters that have broken into their property. These have been predominantly across London where there are a reported 70,000* empty properties, but we have seen cases across all major cities. I am staggered that there are so many empty properties in the UK with over 350,000* of these being empty for more than six months, and yet council waiting lists are so long and homelessness is up 17% this year.”

According to Channel 4, statistically 88%* of these empty properties are privately owned. Paul adds “Many people don’t have the funds to bring these properties back into use and it can cause huge aggravation, expense and stress for owners if squatters take up residence. In order to reduce this, councils need to do more by forming stronger links, in regards to this new campaign, with private landlords in order to tackle the empty homes crisis by creating viable alternatives so that fewer people need to squat.”

Aside from a few organised gangs who target properties to squat in, the main reason that properties are squatted is because the majority cannot afford rent. Paul adds “The idea of a campaign, such as this by Channel 4, to get empty homes back into use is a very good one and with the right Government backing and some long term funding put in place to assist the initial renovation costs which will be paid back through rents received by landlords, this has the potential to provide a great solution and bring council waiting lists down.”

Mr Shamplina also believes that if this new scheme were to be put in place, councils could call on enforcement officers to push harder and enter into dialogue with landlords by way of compulsory purchase orders to start getting empty properties put back into use.

Paul concludes “We whole heartedly support this campaign and would encourage others to do the same.”

Sign up at - http://www.channel4.com/programmes/the-great-british-property-scandal/articles/join-the-campaign/

You probably know of Simon Zutshi, he is the author of The Amazon No 1 best seller, Property Magic, and one of the top property speakers and mentors in the UK!

But Simon is fed up….sick and tired of people saying they have no money and how bad things are right now.

For this reason, Simon is going to share TWO different Strategies either of which you could use to start generating £5k + per month from property, within a few months, working part time. How would that be for you?

Simon usually only shares these cash generating strategies on his advanced property education programmes, however he is going to share them with you on a special NO COST webinar on Monday 23^rd January at 8pm.

To register to join me on this valuable webinar all you need to do is CLICK HERE NOW
and you will automatically be sent an email with all the webinar joining instructions.

CLICK HERE FOR DETAILS

We will be listening in at 8pm on Monday 23^rd January.

I hope you will join us.

In today’s property investing marketplace, getting mortgages and standard finance is slow, tough, often impractical and sometimes expensive.

The modern successful property investor uses other people’s money as leverage to build wealth, portfolios and income streams.

BUT…

Most people don’t know where to start.

[ Here’s a good place – Full PDF JV Blueprint Document….

There has been huge demand for the articles and content below, and we have been helping 100,000’s of people to gain insight about raising finance in any market cycle.

Below are 2 articles that Rob wrote in the Progressive Property JV Portal & Forum, usually only accessible to people paying monthly subscriptions.

Enjoy both parts, and an insight into what is possible investing with other people’s money.

Part 1: How to structure a JV deal to overcome private investors objections & reduce their risk:

We all know that finance is THE BIGGEST objection for most people as to why they can't invest in property

With finance getting tougher, Joint Ventures is one of the best strategies to bypass personal finance and continue to build a property empire whilst others are scratching their heads trying to get BM mortgages

I have already posted an article on JV's on the site, and also recorded a very powerful 1hr 15min webinar on JV's and pooled together some successful people on THIS VERY SITE who have raised cash and done successful JV's

So in this article I'll share with you some different structures for JV's that you can use now to overcome finance challenges

P.S: 'Challenge' = opportunity while others fail. Problem = Fail like the others

*Straight JV: Time vs. money – you use your time and sweat equity as your asset, your JV partner uses their cash but little time

Top tip: They are looking at YOU, the PERSON, not experience, knowledge or proof [it helps just a little], so don’t use ‘not done enough deals’ as an excuse. Think James Caan’s 1st investment in the Den: a Dog Treadmill!!!

*IP JV: You use your knowledge & skills, your ‘Intellectual Property’ as your asset, and your partner uses their funds

Top tip: Your JV partner will be looking to you as an expert: the higher your status, the easier it will be to attract money

*MH/DoT: Using a ‘mortgage host.’ If you can’t get finance, or want to reduce the risk to an investor who has cash but is reticent to let it out, allow them to take the mortgage, reducing their risk to almost zero, and write a contract with them [Deed of Trust] to share or apportion equity, cashflow and loss

Top tip: This is great for family, friends or unknown partners as it overcomes their biggest objections of fear and trust

*TiC JV: Tenants in common JV: You buy the property equally with a JV partner, 50% each on title deeds: equally shared risk & reward

Top tip: Works well with straight JV & IP JV. Can show good trust to a PI [private investor] JV partner

*1 for me 1 for you JV: You source for yourself and your PI who is providing the cash. You source one for them for free first, then they fund your first one after that, and you continue.

Top tip: Always source for the PI JV first, as this is great trust builder, and overcomes ALL scepticism & builds solid trust.

*Chalk & Cheese JV: You partner up with someone who has opposing skillsets: Dealmaker with analyst, techie with people person, and so on.

Top Tip: Find your ‘Foil’ and your wealth will exponentially grow: a total must of you want leverage

*Roll up JV: You borrow money at a % per month, invest it in property, and pay the interest ‘rolled up’ at the end of the agreed term and timeframe.

Top tip: Offer full security [1st charge] on the property they are buying and the risk will be low and the deal attractive to the PI

For more on JV’s Click here

Part 2 coming Next Week.

With the benefit of hindsight, we can assess where people got it right with their strategies and where others got it oh so wrong.

Here are FIVE of the biggest mistakes I have seen investors make in the last few years and where you can try to put things right going forward:-

1. Over Gearing

There are generally two schools of thought with gearing; those who say use other people’s money and gear as high as you can and those who want to keep gearing to a minimum.

The difficulty with low gearing is you can’t spend equity. If the money is out and working for you you can get your money (or the banks money) to make more money and so on. However as we have seen, with some pretty spectacular results, over gearing your portfolio is a very dangerous game. It leaves you nowhere to go when things take a turn for the worse and the speed with which the credit crunch hit took everyone by surprise. There was barely anytime to regroup and to restructure and with nowhere to go when rates tipped upwards for a short time many people simply could not cope and went under very very quickly.

So while gearing enables you to do more deals those deals are worthless if you go under. That may be a risk some can live with but if you’re not that type of person then keep your gearing low. Yes it might take you longer to build your portfolio but that’s the price you pay for stability and peace of mind.

2. No Money Down

Much like over gearing no money down can be a boon and a curse. Too many people rely on no money down because they have no money! That might seem an odd statement but I’ve always deemed no money down deals much like tax.

We want to minimise the amount of money left in a deal sure but not at the expense of the entire portfolio. Avoids taxes yes but don’t evade them or you’ll end up in prison!

The problem is that too many people did no money down and still seek it now because they have no money. Property is a cash intensive business and the fact is that you can easily find yourself in trouble very quickly if you don’t have plenty of spare cash.

If you don’t have any money then you can still stay in the property game but build up a cash reserve first then look to build your portfolio.

3. Over Spending

The fact is we had it good for a time and that is no longer the case. You spent too much money, you bought an expensive car, you bought a big house and you bought investments you can’t keep. Well its time for them to go.

It’s even more important to  watch the pennies with your properties; you need to negotiate with your letting agents or even take over the management, don’t just write cheques for tradesmen, get quotes and barter. Watch your cashflow like a hawk.

4. Retiring Too Early

A lot of people have got into property and still are with a view to ‘retiring early’. But the reality is very different. Many people packed in their jobs or other businesses to do property full time. When the market took a downturn and they couldn’t remortgage or sell so easily they’re left wondering how they’re going to pay the bills.

The fact is unless you’ve got a few hundred grand in the bank as unencumbered cash and a very low standard of living you’re going to have to earn some money. So get your thinking cap on and find a way to make some money. You’re simply going to have to put retirement on the back burner.

If you have a skill can you use it in your own business, can you return to work or can you turn your new found skills to something else in property for example finding deals for others, refurbishing property or even crime scene cleaning – that was what I was going to do; it was the only job where I could connect forensic science and property together!

5. Not Diversifying

I have seen a lot of people try to create cookie cutter style strategies out of property. They discover a strategy or system and do it to death. They may become supremely efficient at it and will usually then try to sell it to others!

The problem comes when the rules change. The advent of sale and rent back regulations happened extremely quickly and, whatever the rights or wrongs of it, the market was almost killed overnight. Certainly the ability to finance such deals disappeared almost overnight.

Those whose businesses almost solely concentrated on sale and rent back either had to opt for expensive and time consuming regulation or leave the industry altogether having to find something new.

I am seeing the same again with investors solely concentrating on options; they’re just a tool to use not an overarching strategy.

So the lesson here is to diversify; spread your risk a little bit by buying in a couple of different suburbs, buying a couple of different types of properties, using a combination of strategies and ensuring that you have some ‘movement’ in your portfolio if the need arises.

To close; there have been two types of clients that I have seen come through the credit crunch all the stronger and have no fears about rate rises or a future dip in prices:-

1.The investors who watch their cashflow to the penny, they look for every way to save money often self managing their portfolio, finding tenants themselves, even making repairs themselves. Many of these landlords are actually doing exceptionally well and a number have mortgages on a repayment basis and are still cashflowing!

2. Then there is the investor who has other means of financial support. They have lots of cash, a great income or other investments. They are easily able to afford to pay for repairs and maintenance, subsidise voids and even negative cashflow properties.

So which one are you? In my experience it’s a heck of a lot easier to become No1 than it is No2!

So if you want to ensure you’re still here for the next boom then knuckle down to concentrating on your portfolio, reducing your expenses, increasing your cashflow and if necessary finding a job! Just don’t be a rabbit caught in the headlights and do nothing – while rates are low now is the time for action.

Article Provided by Lisa Orme

Mortgage Broker and Property Investor

I have attached here some of my 101 Essential Tips for investing with high cash-flow, and this section is for use particularly with tenants claiming benefits.

It’s not all bad, and if done in the right way then you can make much more money with less tenants.  We also have the opportunity to have some rent direct from the council and most tenants are happy to have the money paid direct to our bank account.

The main difference is that it is paid every 2 weeks for job seekers allowance and every 4 weeks for housing benefit, so we’re really flexible and help the tenants to be able to pay the minute they get paid – that way we are far more likely to get the money than have arrears building up.

Have a look at these tips and see what you think – if you like them then there’s over 90 more to be sent if you want them.

Let me know what you think – I’m sure you could add to this list, but you ignore them at your peril.

Just some of the 101 Essential Tips for Investing with High Cash-Flow

LHA Cash-flow Options by Yvonne Emery

41. LHA (Local Housing Allowance) room rates may be lower than you want to charge, but remember that this amount is received in housing benefit and many are prepared to top this up from their unemployment benefit or their wages if they are working.

42. Whilst a single let house might attract a rent of £625 pcm to professional tenants, a family who are eligible for 3 bed accommodation will have to top up their benefits to match this amount.

43. Tenants in receipt of LHA are generally likely to stay for longer in a property as their family will live close, they won’t be moved by a company to work elsewhere and they have less ambition to upgrade.

44. The age of children and their gender is critical in the amount of benefits paid. Once the children reach secondary school age (11yrs) they will need separate rooms if they are of different sex. This increases the amount of benefits the family is entitled to, and therefore the amount you are able to charge to a family with older children.

45. The 2 + 2 rule for LHA tenants is: if the tenant is 25 yrs and over (35 from April 2012) and you are able to allocate them 2 rooms for their sole use (shared kitchen and bathroom allowed) then they are eligible for the single person’s allowance which is nearer to £80 per week or £385 per calendar month. Two tenants using the 2 + 2 system can be put into a 3 bedroomed house using the dining room or lounge as a 2^nd room. This means higher cash-flow.

46. If a tenant is claiming LHA for the first time it can take up to 8 weeks for the benefit to come through. You can go with the tenant to the council to help them claim, which can often speed up the process and get the first cheque paid directly to you.

47. LHA is paid 4 weekly, so it is useful for the tenant if they can pay you 4 weekly – this helps them budget and means you can keep track more easily of their payments. Collecting on their pay day removes the likelihood of it being spent before it gets paid to you.

48. People with disabilities and have wheelchair requirements are able to claim significant benefits for housing and Landlords can get help to provide suitable housing that has wet rooms for showering, hand rails and other specific required elements. Bungalows are always in demand for this sector. The rental term is a long guarantee of 3 to 5 years, so it’s worth making the changes.

49. People with learning difficulties or who have downs syndrome are usually housed in purpose built properties, and funding for these is being reduced at the moment. The main reason the councils don’t look to private Landlords to provide accommodation is that they don’t believe Landlords are prepared to accommodate tenants on benefits, though some councils are a bit more open-minded. Long-term rental is required so you would probably have to commit for a 3 to 5 year period.

50. Multi-let properties are in great demand for tenants claiming benefits as there are thousands of people on LHA benefits who are in need to housing. In rental communities families and singles don’t have expectations of being able to own their own home. Providing great, clean accommodation soon gets the word round that there is a preferred Landlord area, which speeds up the process of renting out rooms. The best place to advertise for tenants locally is in the newsagents and other local shops – make sure to attract attention with room rates and benefits.

If you want to see the rest of my 101 Essential Tips for Property Investing with High Cash-Flow then just let me have your name and e-mail address and I’ll send the rest over the next couple of weeks.

yvonne.emery@justdoproperty.co.uk

The other areas I’ve covered in this Top 101 Tips booklet are

• What reduces cash-flow
• Providing yourself with a buffer
• Ratios for quick calculations
• Licensed HMO’s and high cash-flow
• Getting your property rented
• Super High Cash-Flow Tips

So if you don’t want to miss out on being the first to receive these tips – hot off the press then I’ll happily share these with you as I’d really love all investors to get these tips and make much more cash-flow than they do at the moment.

After all, deposits are precious and so is how we use other people’s money.

Happy Investing

Yvonne

Whenever I am asked what area of property investing investors should go into, I almost always will say go for buy to let and will relate it to business. Many investors however still do not buy the correct property to fit the criteria they should look for. If you think of large businesses and how they measure growth and performance – they will continually talk about growing by either opening new branches or shops, or taking over existing ones.

So for instance a company may say “Our target is to open 30 new stores throughout the UK in 2012.” Another company may say we shall consolidate our position and work on performance of existing stores. In terms of growing as a business, this is where buy to let has a huge advantage over buying to sell. If you buy to sell, you have to re-start your company each time, and are not building up any longer term growth – you can make short term profits but you work very hard for this at times and is not very tax efficient.

Tax Efficient Option

For me I look to increase the overall value of my portfolio each year by buying further properties in areas I see continued capital growth and a healthy cashflow, and holding onto existing properties. The great thing with buy to let is it takes far less time than buy to sell, and is far more tax efficient in my opinion. Once you target an area and affordable properties – you can pay your deposit, mortgage the remaining amount, and let your money start working for you, and then move onto the next one.

I always think of each house as the equivalent of one store in a large chain of stores e.g. a Marks and Spencer store in an area of the country. If the house is performing well, it can be down to a good tenant/good managing agent/or good local area, vice versa if it struggles it will be down to one or two of these key points not performing. Many people may offer advice on buy to let, but essentially if you keep it simple, and follow some key criteria you will do very well. It is always worth looking at how your overall business is running, but then drilling down and looking at individual houses to see how they are individually performing. For instance overall your portfolio may be going up in value by 10% per annum, and running at a neutral cashflow, which you may think is very good – but if look closer you may see that 50% of your properties are going up by 20% in value and making a net income each month, while 50% are not showing any capital growth and losing money each month. Or you may see that a property you thought was performing very well, actually is giving a low return on investment as has very little borrowing on it.

Measuring Performance

How do you measure the performance of each investment? Let’s look at a couple of example properties: You own 2 properties in the same area of the country, both bought in Jan 07. Therefore similar levels of capital growth are expected – 10% for the year – and rental yields are similar as they are both 2 bedroom terraced properties.

Property 1: One is worth £70,000 and rents for £350 a month You have an 85% mortgage on this – and your mortgage payments and maintenance costs each month are exactly covered by your monthly rent.

Property 2: You have bought this for cash. It also rents for £350 a month – with no mortgage after maintenance costs you make a net figure of £2000 over the year.

Which has performed better? Well different investors may see it differently – for some the fact property 2 has made £2000 income would put it ahead. I would look at the return on my investment: Let’s assume buying costs on each were £2000.

With property 1, you have invested £10,500 + £2000 = £12,500, and at end of year you have made no net income, but have made £7,000 capital growth. So I would calculate this as a ROI of 56%

With property two, you have invested £70,000 + £2000 = £72,000, and at end of year you have made £2000 net income and £7000 capital growth. So I would calculate the ROI here as 12.5%

High Leverage

A big difference – and shows emphasis is always on high leverage and capital growth. How do you get this? Buy in affordable areas – and mortgage as often as you can – as long as your cashflow is kept to a manageable level. It is also important to realise like any business there will be short term issues but these should never get in the way of your longer term goals. So if you get an issue with your first tenant, or managing agent, but had a goal to get to 10 properties by the end of the year – do not give up at one property, or think there is no money in property! The only thing that is for sure is if you stop at one, you will not make a huge amount of money – you should continue with your midterm goals – this is important advice on buy to let investing! I lost money on one deal early on, but learnt from it, and have had issues with problem tenants from time to time, but have always had a clear longer term goal.

So I would say when buy to let investing treat property as a business, review it regularly, and overall measure the performance of your business by the growth each year, and the return on investment each year.

By Alan Forsyth

Propertysecrets.net is an information portal offering online advice and ready sourced deals at below market value. For updates on all of propertysecrets.net UK & Overseas Buy-to-Let Investments click here and register your interest today!

Ok so he has been keeping it under wraps but at last Simon Zutshi has released details about his  “Property Magic Live” 2 day event on 1^st and 2nd October.

Tickets are now on sale and going fast.

This is going to be the event of the year to be at, if you are serious about your property investing.

When Simon ran the first Property Magic Live, 3 years ago in 2008 it set new standards. Simon always delivers fantastic content and has an ability to inspire you to take action.

We strongly suggest you secure your tickets now before they sell out.

Here is the link where you can find out more and book your tickets now.

Property Magic Live

“What would you do if you had £1 Million to invest?” Wouldn’t this be a nice problem to have!

A great article by Simon Zutshi

I am frequently asked this question by people who want advice on how best to invest their money, although it is not usually for quite as much. My answer is always the same. It depends what you want to achieve: cash flow, or equity growth as this will affect the type of property you invest in!

People respond by saying “No Simon, I want to know what YOU would do if you had £1 million to invest?” Well that’s a bit different. I already have a great cash flow from my portfolio and I have enough property for my long-term pension plan, so my situation may be slightly different. However, in this article I will explain how I would personally use the money.

Borrowed Money?

First of all we need to determine if the £1 Million is free and clear cash or is it borrowed money, on which interest is payable. Let’s assume it is borrowed, as this is probably the circumstance for most people reading this article. Let’s say the cash is released equity from property and assume the cost of borrowing of is 6% per year. At this rate of interest, the monthly interest payment would be £5000 on borrowings of  £1M. My first objective would be to use half of the funds (in this case £500,000) and invest it in such a way to generate at least £5000 a month. This would enable me to cover the borrowing on the entire £1M thus leaving me rest of the funds (£500,000) to play with at no cost.

To generate £5000 per month I would need to work the first £500,000 to achieve an income of 1% per month (12% per annum). It is very possible to achieve this by working with other investors who have found great investment opportunities, but are unable to funds all of the deals they are finding.  This is the case with many of the investors on my Property Mastermind Programme, who just have too many deals to do on their own.

Money to Invest?

If you have money to invest you are in a great position to get other people to do the running around and bring great deals to you. It is critical that you educate yourself so that you can differentiate between the good and not so good deals. With plenty of cash you can afford to be fussy and cherry pick the very best deals. You can either find projects when you get a guaranteed return of 1% a month or you may become a joint-venture partner with potentially higher returns of maybe 20% per year will of course there is always a bit more risk.

Personally, I would find deals that require some initial funding, where we can add value, and then refinance after 6 to 12 months to take all of the money out and be left with a property with equity but none of my funds invested. This is a great way to rapidly build your portfolio.

Having covered the cost of borrowing the entire £1M utilising the first half as described above, that leaves £500,000 for me to invest without necessarily needing to gain a return on that money.

Refinancing Investments

Refinancing investments is my preferred option, although sometimes I find deals with fantastic cash flow, which require cash deposits to be left in them for the long-term. I am happy to do this as long as there is a great return on the invested funds of at least 20%. There are many HMO and multi-let properties that fall into this category. Assuming a 75% loan to value borrowing on these HMO properties, with £200,000 for deposits, I would be able afford between four and six HMO properties, depending on location. Purchasing this type of property (which should generate £500-£700 net profits per month property) could give me an extra cash flow of  £2,500 to £4000 profit per month.  I don’t really need that extra cash flow so I would use this extra income to build up a bigger cash reserve for the future.

Taking about cash reserves, I would want to keep £150,000 in reserve for those occasional fantastic opportunities that come up which require a very quick cash purchase. If you are looking for them, the “deal of a decade” comes up about once a month.

I would keep £50,000 to use for options deals as there are some fantastic options that do require a few thousand pounds investment.

Commodities

The final £100,000 I would use as a long-term hedge against future potential high interest rates. My personal preference is to invest this money into physical silver and gold. Both of these precious metal commodities have dramatically increased in value over the last few years and some people believe they have reached the top of the market. However I have consulted with some of the best commodity experts in the world who really know what they are talking about, and I now believe that these commodities could significantly increase in value over the next 10 years.

To summarise: 50% of this money invested to generate sufficient cash flow to cover borrowing of the total £1M. 20% invest into long-term projects to generate cash flow. 15% I would keep ready to use for rapid cash purchases. 5% to buy options. The remaining 10% to diversify into commodities as a long term hedge.

Have you heard of Simon Zutshi? He is regarded as one of the top property investing experts in the UK and I certainly attribute much of the success that I have had in property to what I have learnt from Simon ‘s training.

He is the author of Property Magic which is not only an Amazon No 1 best seller but also a great book on Property Investing, written in a very straightforward and easy to read style.

Deal No. 1 – Complimentary copy of Property Magic

I always recommend the book to everyone I meet who is interested in property investment. I know Simon occasionally does special offers where he gives away copies of his book. Because I have a great relationship with Simon he has allowed me to extend this offer to you. All he asks is that you pay the post and Packing of £1.95.

This is a limited offer while stocks last.  Click here now to claim your complimentary copy of Property Magic.

Deal No 2 – WIN VIP Tickets to Property Magic Live

Simon has just announced the launch of this event and is running a free prize draw where you could win 2 VIP tickets. Click here now for your chance to win.

I am sure you will benefit from these offers.

PS Successful people take action!  These are great offers I suggest you take action today!

What are you investing in at the moment?

The answer doesn’t need to be a type of property, a method, or even an area, it’s more likely these days to be a cash-flow return.

If you’re looking at a deal how are you deciding whether to invest or not?

Do you check the location? Perhaps you want to invest close to home!

Do you check the possibility for Capital Growth? – Perhaps not for the short-term but for the next 10-20 years.

Do you divide your cashpot and diversify to make sure you’ve covered all eventualities?

Do you look for cash-flow to give you financial freedom, or to give you a few more luxuries in life?

OR are you looking for the deal that ticks all 4 boxes?

Investing through others

What is going to persuade you to part with your hard earned cash?

Rather than thinking of the return you need for £50,000, start with £5,000.

If you could put £5,000 into the bank you would get about 3% (Aug 2011) or slightly more if you’re prepared to leave it in for 3 to 5 years.

Let’s be generous and allow 5%.

£5,000 invested at 5% for 3 yrs = £250 p.a. or £750 over the 3 year term.

If you lend it to another investor to purchase property and get a restriction (RXI) or some form of security against a property, and a loan agreement you might attract 10% to 12% interest rate.

£5,000 invested at 10% for 3 years = £500 p.a. or £1,500 over the 3 year term.

But let’s face it, how often are you going to be given the opportunity to invest such a small amount with an investor? They are usually looking for £20,000 to £50,000 and often more.

So, if you invest £20,000 at 10% for 3 years  = £2,000 p.a. or £6,000 over the 3 year term.

£2,000 p.a. = £166.67 per calendar month (pcm).

Incidentally £50,000 invested at 10% for 3 years = £5,000 p.a. = £416.67 pcm.

Do it yourself

Let’s compare this to investing for yourself, choosing the property and having it managed for the same period.

First of all, the amount you will have to invest starts higher.

e.g. £80,000 property purchase price with 75% LTV (loan to value) lending means you have to invest:

£20,000 deposit

£1,000 fees

£X        decoration

£80 insurance (£1:£1,000)

Plus other expenses

You might be able to attract £100 to £200 per month from a single rented property.

£200 per month = £2,400 p.a.

over 3 years this would be £7,200, although it would be unusual to hold a property for just 3 years.

£7,200 of course is not Net so you still have to take off expenses such as maintenance or tenant find expenses.

The bonus is that if you hold for the long-term and there should be a capital growth on the property.

Great!  However…….

Any capital growth is IRRELEVANT . Yes that’s right, irrelevant unless you

a)      Sell the property and lose the cash-flow

b)      Re-finance, increase the lending and reduce the cash-flow.

You would need to make sure that any lump sum recaptured from the sale or re-financing replaced (as a minimum) the cash you have released.

So if you are expecting to

• invest £20,000,
• and get enough cash-flow for financial freedom;
• double in a short space of time because of capital growth;
• draw the £20,000 back out within a short period (1-2 years); without much investment on refurbishment of the property or a high interest rate capital growth market,

You ARE looking for the Holy Grail.

What is realistic then?

Are you swayed by how much you NEED each month to replace your income?

1. How much do you need each £10,000 to earn for you?
2. How long will it take you to save each £10,000?
3. How much will it cost you to borrow £10,000?

Make sure you know the answers to these questions as they will mean you don’t need to look for the Holy Grail because you’ll know which investments tick the boxes for you.

It will mean the difference between whether you wait for that PERFECT deal, or you JUST DO IT!

If you want to find out more then request my free special report on refurbishment with less stress, in less time and within budget – you’ll need to know this strategy for high cash-flow investing in the current market.

email Yvonne.Emery@JustDoProperty.co.uk for your copy.

Article provided by Yvonne Emery.