| Making the decision to become a professional | | | | Here, all lenders require is that your property is able |
| property developer and invest in property is no easy | | | | to generate 125% of its mortgage repayments |
| step. Is it one that requires a lot of thought, | | | | through buy to let. Meaning choose wisely and it is |
| consideration and time to ensure you are making the | | | | possible to invest in bigger and better properties, |
| right decision. | | | | than you normally would be able to if it was based |
| If you too are struggling to decide if property | | | | on your salary. |
| development is the right route for you, then the | | | | 6.What are the best properties to invest in? |
| following FAQ can help put all your concerns to rest: | | | | There is no fixed rule to this exactly, although |
| 1.What is property investment? | | | | residential properties do primarily win in the |
| There are many misconceptions about property | | | | investment stakes against commercial property and |
| investment and what it exactly entails. The most | | | | land. |
| common route you will encounter - and hear of - is | | | | When you are researching potential property |
| renovation, where you buy a property with the | | | | developments, the key points to take into |
| purpose of doing it up and selling it. | | | | consideration are the properties tenancy demand; the |
| However, whilst this niche was profitable during the | | | | mortgages deals available and the positive cash the |
| property boom of 2007, this investment technique | | | | property can generate. As long as there is the |
| unfortunately is less effective during economic | | | | demand and the property can produce at least |
| downturns. That is unless you have got the cash to | | | | £300 in positive cash flows, then it doesn't matter if |
| turn the property around fast and quickly get it back | | | | it is a terraced, semi-detached or detached. |
| on the market. | | | | This information aside, economic circumstances can |
| The other route however - and the one we | | | | make one property type more popular than the |
| recommend to you - is buy-to-let. With buy-to-let, | | | | other. During the recession for example, studies |
| you can invest in property based on the areas | | | | found that tenants preferred living in terraced |
| tenancy demand and ability to produce positive cash | | | | properties compared to all other property types |
| flows, and generate month on month incomes simply | | | | because they were better designed and more |
| by leasing your property development to tenants. | | | | energy efficient. |
| There is no need to sell... | | | | 7.What is positive cash flow? |
| 2.What makes property investment different to | | | | Positive cash essentially represents the income left |
| stocks, bonds or shares? | | | | over from a tenants rent after the properties |
| The fact that it will never go into zero values! | | | | mortgage repayments have been deducted. So, the |
| Although stocks, bonds and shares can help you to | | | | larger the properties positive cash flow, the more |
| experience annual returns of up to 25%, they are | | | | profitable the property is. |
| also prone to dipping down to -8% leaving YOU out | | | | 8.Is it possible to invest in all financial climates? |
| of pocket. | | | | Yes. If you are looking to enter specifically into the |
| With property it is a much different story. Even in a | | | | buy to let investment market, then with the right |
| recession, properties can still produce annual returns | | | | investment strategies, brokers and negotiating skills, it |
| of up to 25% - if you invest correctly - making it a | | | | is possible to invest come property boom or |
| much safer, more stable investment route. | | | | economic crisis. |
| 3.Do I need capital to invest? | | | | Take the recent recession. During the last 2 years |
| No. Equip yourself with the right strategies, and it is | | | | we have been confronted with property price |
| possible to invest in property using little if any of | | | | discounts of at least 20%; base rates of only 0.5% |
| your money and purchase properties without putting | | | | and a tenancy demand that has increased by 24% |
| your own home at risk. | | | | alone during the last quarter of 2009. |
| Investment strategies such as No Money Down or | | | | However, even with the property boom of 2007, |
| No Deposit Down are specifically designed to help | | | | property investment was still powerful asset as it |
| you invest with minimal costs involved. All you will | | | | encouraged rapid capital growth which in turn |
| have to worry about is your legal fees and stamp | | | | prompted rental increases and larger positive cash |
| duties; yet even then it is possible to negotiate such | | | | flows. |
| property discounts that your property will essentially | | | | The financial climate does not have to play a factor |
| pay for itself. | | | | in your decision to invest; only help you to determine |
| 4.Do I need experience? | | | | which of your investment strategies will be most |
| Despite what the media would like you to believe, | | | | effective. |
| you don't have to have prior property investment | | | | 9.Is it possible to invest abroad? |
| experience to make a profit from property. | | | | Your property portfolio does not have to remain |
| The key to achieving long term successful | | | | restricted within one city, region or country. UK, USA, |
| investments is to: equip your property portfolio with | | | | Europe or Australia... with the right strategies all |
| the right investment strategies; negotiate the right | | | | properties can be transformed into credible property |
| property price discounts, but more importantly | | | | lets. |
| ensure that you only invest in properties which can | | | | The only thing you should be cautious about when |
| produce the positive cash flows and tenancy demand | | | | investing abroad is familiarising yourself with their |
| you need. | | | | property laws and investment regulations. Every |
| Attending a property development course can help | | | | country is formatted using a different system, and |
| to equip you with such investment strategies. Just | | | | will employ different methods for lending, organising |
| make sure that you thoroughly research these | | | | repayments and structuring property leasing. |
| property development courses first, check their | | | | 10.Do I have to give up my day job? |
| history/case studies and only sign up to a course | | | | No, far from it. The great thing about property is |
| that can offer you at least 5 investment strategies. | | | | that you can easily research, invest and build your |
| REMEMBER: Not all investment strategies will work in | | | | property portfolio in your spare time - for as little as |
| all financial climates, which is why having plenty of | | | | 1 hour property per week - and continue working |
| choice can come in handy. | | | | your day job. |
| 5.How do banks lend money for investment | | | | You can even employ a property manager to take |
| property? | | | | care of your properties, and ensure that your rent; |
| Unlike applying for a mortgage where your lending | | | | maintenance issues and tenant problems are quickly |
| amount is based on how much you earn, buy to let | | | | resolved without need for your assistance. |
| investment is assessed very differently. | | | | |