Investment Property Worldwide.com
  • Introduction
  • Portugal
  • Bespoke Villas in Spain
  • SIPP details
  • Blog
  • Contact page

How do you ascertain the true value of a property for investment?

2/10/2012

 
Student room investment
A lot of investors simply rely on the price given to them by the agent or developer. But developers can overcharge, they over-design buildings in a bid to win awards and they are forced to overcharge for the buildings simply to break even.
Some savvier investors may base their investments on a search on one of the many
internet property portals to find the average prices for similar properties in the area.
The more experienced might also use sites like Zoopla to see how properties have been amended, re-listed, re-valued since their original posting. 
However, these sites only give us the values that the vendors and the estate agents think that the property is worth. This isn’t reliable as the vendor clearly wants to
obtain the maximum price, a strategy supported by the agent who normally works
on a commission basis.
There is only one way for investors to ascertain a property’s value which is truly safe and that is to find a properties residual value. The residual value is based on the amount of net rental income it can generate – anything above 6% looks like a
good investment.
For example, if a property brings in £6,000 rent per year after all costs have been
taken in to account, that £6,000, based on a 6% net yield would give the property a value of £100,000.
That £100,000 would be the Residual Value of the property and it should be the focus for every investor going in to a deal. But at the minute investors ignore the residual and rely purely on the capital growth of a property which is hopelessly optimistic considering the market place at the moment.
Despite the residual value of a property being £100,000. The investor may pay £125,000 believing that the value of the property will increase and they can sell it for
£150,000. But then if property prices start to fall slightly, he’s suddenly in
negative equity and then the only price someone would be willing to pay for the
property is the Residual Value and the investor will have lost £25,000.
The key to real successful and safe investment is how you derive the 6% net yield which you have used to establish the property’s residual value. By working out the 6% net yield using below market value rent it means that the investor will not have
to contend with tenants struggling to pay rent. As rent continues to rise, there will always be a demand for properties charging below market value rent.
First time buyers will be queuing round the block to save a £100 per month, yet the
investor is still left with a 6% net yield because they have bought the property
at residual value.
It also means that there will always be savvy investors looking to purchase a property at the residual value because they are not only purchasing a strong income stream, but they are purchasing a property at a price that will not be affected by market fluctuations or crashes.
If the property market was to fall again then the investors who have invested
in residual value will be protected from the fall in house prices and when
houses start to get repossessed and more people are forced in to the rental
market, then their yields will go up even though they are still charging below
market rent.
In the end, everybody will be relying on residual property valuations. It’s inevitably in the future but there’s no reason why investors can’t take advantage of them now.

Invest in Student accommodation with unit prices on average 30% below comparable units and a net rental guarantee of 8% for 2 years  - LINK 


Bankruptcy too expensive for those in debt

28/9/2012

 
Cutting the Debt mountain
A substantial fall in the number of people going bankrupt could be due to high fees not any improvement in personal finances, a leading debt advice body has warned. 
Joanna Elson, the chief executive of the Money Advice Trust, said that a 10 per cent fall in the numbers of people going insolvent "may largely be driven by  increases in the fees required to make yourself bankrupt".
She added: "People struggling with debt often can't afford the £700 it costs to go bankrupt [£525 for the deposit plus £175 for the court fee], even though it would otherwise be their best option.
"This leaves them in a financial black hole. The numbers using debt relief orders, one of the cheaper remedies, has risen."

On Friday, it was revealed there were 27,390 personal insolvencies in England and Wales in the second quarter of this year, a 10 per cent decrease on the same  period a year ago and the lowest figure since the summer of 2008.
The figures are a surprise as the UK has recently entered recession, but Ms Elson warned insolvencies may spike again later this year: "These figures are likely to get worse, with incomes increasingly unable to match rising prices."


MILLIONS FACE PENSION CRISIS!

7/9/2012

 
pension crisis
MILLIONS of new pensioners were warned this week that they face a retirement of poverty after weeks of slashed annual payouts.
Pension companies have cut rates offered on their guaranteed annuity incomes 24 times since the start of summer.
Standard Life is the latest to do so, lopping five per cent off the rate offered to the newly-retired and those approaching retirement.
And male pensioners will suffer an extra blow later this year with the introduction of the EU’s new “gender directive” which will further force down annuities for men.
Craig Palfrey, founding partner of independent financial advisers Penguin Wealth, said: “Annuities are in meltdown. We’re way beyond red alert. They have been coming down relentlessly and Standard Life’s decision to take a sword to rates is just the latest example.
Twenty years ago a £100,000 pension fund would have guaranteed an income of £15,640 a year for life for a 65-year-old man. Now it is just £5,140 a  year.
And the crisis decimating pensions is set to continue for months, perhaps even years, piling on the agony for the newly-retired.
Experts warn that the situation is likely to worsen as annuity providers  struggle with volatility in the stock market and the Bank of England’s  quantitative easing (QE) strategy to tackle the recession.
The money-printing policy has been attacked for triggering “a death spiral” in pensions, which some experts say has led to the worst retirement  payouts in history. 

NOW is the time to take control of YOUR pension before it is too late - SIPP LINK.
 


One in five struggles to pay bills

24/8/2012

 
UK debt
Families' budgets are squeezed by increased utility costs, soaring food prices and salary freezes.
Five million households currently face increases in their fuel bills of up to £100-a-year as SSE, the UK’s second biggest energy company after British Gas, said that from mid-October the price of an average annual dual fuel bill will rise from £1,172 to £1,274. Other companies are expected to follow suit. 
As well as energy bills rising, mortgage payments are set to increase as other lenders follow Santander’s suit in upping its Standard Variable Rate (SVR). 
Many individual salaries are being frozen and one in ten employees is being forced to
take a pay cut.
With the combination of increased utility costs, soaring food prices and a
compounding squeeze on salaries, Moneysupermarket.com has found that 80pc of
households are on a financial budget irrespective of income, demographic or family set up.
In order to ease the financial burden many Brits making extensive cut backs where
they can. Almost half of us have had to use credit in order to pay utility bills, while a 25pc of adults have said that they are forced to rely more on credit cards to ensure that the regular household outgoings are covered. 
Clare Francis financial expert at Moneysupermarket.com comments: "The fact a rise in outgoings of £50 or less would tip a third of Brits to ‘financial breaking point’ speaks volumes about how difficult people are finding things at the moment."

Article published in the Telegraph follow the link to read the article -
http://bit.ly/OXKL1M

Millions will see pensions slashed by up to 20% as new EU rules are set to send annuities plummeting

22/6/2012

 
Picture
MORE bad news on pension's!! TIME TO ACT!

Millions of people could see the value of their pensions slashed by up to 20 per  cent because of new EU rules.
Those with a £100,000 pension fund could be  more than £1,100 per year worse off in retirement because of the reforms,  research has shown.
The Solvency II rules, which are due to come  into effect in January 2014, will force pension funds to hold a higher  proportion of 'safe' Government bonds.
As the bonds - called gilts - have such low  rates of return it will drive down the returns on retirement fund annuities,  which are used to pension income.
The reforms are designed to make pension  funds safer and reduce the risk of them going bust.
Annuities, which set retirement income for  life, have already fallen to historic lows because of the impact of quantitative  easing.
At present, a pension annuity fund may invest  20 per cent in low-yield gilts and the rest in riskier corporate bonds which have a higher rate of return.
But under the new EU rules, annuity funds  will be forced to hold a higher percentage of gilts.
New research by Deloitte suggests annuity  rates will plunge by between five and 20 per cent when the directive comes into  force in January 2014.

A £100,000 pension pot currently gives an  income of £5,837, but once the regulations come into effect they will be between £292 and £1,167 a year worse off.

Take control of your pension by investing in Alternative Investments via a SIPP.


LINK TO SIPP INFORMATION PAGE AND VIDEO - 
SIPP's LINK


Read more: ARTICLE LINK

S & P Predicts End to Economic Crisis in Europe in 2012

12/3/2012

 
The credit rating agency, Standard & Poor’s, believes that the European
macroeconomic crisis will not extend beyond 2012, which will result in a “significant recovery” of European real estate markets in 2013.
“Standard & Poor’s Ratings Services believes that the macroeconomic crisis may not extend beyond 2012. We still expect a new recession in Europe, although we believe it will be mild, with a gradual return to growth thanks to the growing demand from emerging countries, the strength of demand in developed countries and the restoration of investor confidence,” said the company.
According to El Economista, the baseline scenario of S & P considers there will be a flat growth of the economies of the eurozone as a whole, with growth of 0.5% in France and 0.6% in Germany, while in UK the gross domestic product (GDP) will grow by 0.5%.
Stable outlook for construction
“With respect to the housing market, we look forward to seeing the beginning of a significant recovery in 2013, which will improve macroeconomic conditions and reduce unemployment,” said the agency, which they hope “will boost consumer demand and the valuation of real estate.”

As economies start to recover now could be the time to invest in property!
Contact me with your requirements be it a second home or investment property and I will try source it for you -
CONTACT

    Author

    Investment Property Worldwide will try bring to you a diverse range of property, investment news.

    Archives

    October 2014
    January 2014
    July 2013
    June 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012
    December 2011
    November 2011
    October 2011
    September 2011
    August 2011

    Categories

    All
    2012
    5* Resort
    5 Star Resort
    Akbuk
    Akbuk Bay
    Algarve
    Algarve Coast
    Alternative Investment
    Alternative Investment
    Alternative Investments
    Alternative Investments
    Annuity
    Annuity Rates
    Asia
    Bakkan Oil Fields
    Bakkan Oil Fields
    Bank Discounted Property
    Banking
    Barbados
    Beach Club
    Belle Plagne Skiing
    Bespoke Villa
    Blu Hotel
    Boot Camp
    Britains Got Talent
    Buccament Bay
    Buccament Bay Resort
    Buy To Let Student Accommodation
    Care Homes
    Caribbean Resort
    Caribbean Resorts
    Cricket Academy
    Currency Exchange
    Currency Market
    Debt Management
    Debt Management Plan
    Discounted Properties
    Discounted Property
    Discounted Property.
    Economic Crisis
    Economic Recovery
    Economy
    Euro Bailout
    Euro Rate
    Euro Zone
    Excel Currency
    Finance
    France Skiing
    Fsa
    Gary Player
    Golf
    Golf Property
    Green Fees
    Greetland
    Guaranteed Return
    Guaranteed Return
    Harlequin
    Harlequin Air
    Harlequin Hotels
    Harlequin Hotels And Resort
    Harlequin Hotels And Resorts
    Harlequin Resorts
    Harmony Bay
    Healthcare Investment
    Help For Heroes
    Holiday Competition
    Holiday Inn Express
    Holiday Inn Investment
    Holiday Lets
    Holiday Scam
    Hotel Investment
    Hotel Investment
    House Market
    House Prices
    Housing
    Inflation
    Insured Investment.
    International Payments
    Investing In A Hotel Room
    Investing In A Hotel Room
    Investing In The Caribbean
    Investment
    Kerswell
    Lagos
    Landbanking
    Liverpool
    Liverpool Soccer Academy
    Loan Note
    Loan Note Investment
    Loan Notes
    London Riots
    Luxury Caribbean Holiday
    Marquis Estate
    Mini Hotel
    Mini Hotel
    Mini Motel Room Investment
    Mini Motel Room Investment
    Mmu
    Moneysupermarket.com
    Money Transfers
    Mortgage
    Mortgages
    Mortgages.
    Motel Investment
    Motel Investment
    Moving Overseas
    National Savings
    Off Plan
    Off Plan
    Oilfield Investment
    Oilfield Investment
    Padi 5 Star Status
    Paradise
    Pattaya Property
    Payment Protection Insurance
    Pension
    Pension Confidence
    Pension Funds
    Pension Investment
    Pension Investment.
    Pension News
    Pension Reform
    Pension Retrurns
    Pension Review
    Pension's
    Pension Shortfall
    Pension Transfer
    Performing Arts
    Place In The Sun
    Portugal
    Ppi
    Price Increase
    Property
    Property Market
    Property Recovery
    Property Search
    Property Sizes
    Qr Code
    Reduced Property
    Rental Market
    Resort Investment
    Retirement
    Retirement Age
    Return On Savings
    Rightmove Overseas
    Safe Havens
    Savings
    Scams
    Ses
    Sipp
    SIPP\\
    Sippable
    Sippable Products
    Sipp Investment
    Sipp's
    SIPP's
    Ski Lodge
    Ski Room Investment
    Spanish Property
    Standard & Poor
    State Pension
    Sterling
    St Lucia
    Student Accomodation
    Student Lets
    Student Pods
    Student Properties
    St Vincent
    St Vincent And The Grenadines
    St Vincents Airport
    Telegraph
    Thailand
    Tobago Cays
    Tourism Award
    Tourist Figures
    Travel Advice
    Travel Weekly
    Tripadviser
    Turkey
    Turkish Property
    Turkish Property Prices
    Urban Pads
    Usa North Dakota
    Usa North Dakota
    Website Qrcode
    West End Stars
    Western Algarve
    West Indies Cricket
    World Travel Awards
    Yorkshire Regiment

    RSS Feed

Powered by Create your own unique website with customizable templates.