Investing in property can be financially daunting however it is possible to purchase a brand new UK property for as little outlay as just one thousand pounds. For example a client will reserve a property for one thousand pounds. We may have negotiated a discount of 15% with the developer for that client. The developer will in effect still sell the property to our client at the pre deposit price but will pay the buyers deposit, stamp duty and legal fee’s with the 15%. It is often possible for the buyer to receive cash back from the developer if the deposit amount is sufficient to service all of the costs of the purchase as well as reducing the amount the buyer needs to borrow such that their repayments are appropriate to rental income to meet the lenders criterea.
Of course having purchased at such a considerable discount it is possible that the buyer will resell the property and take the instant equity that has been created, our sales department offer considerable commission discounts for properties purchased through ourselves. The popularity of property investment has increased for a no. of reasons. When you invest in a saving’s product such as an ISA one of the first questions you will be asked is would you like ‘income’ or ‘capital growth’ from your investment? Your answer should be ’both please’, but you will not be happy with the reply. With property you get both, rental income and capital growth (property values on average double every twelve years).You will then be told about the management fee’s that will be attached to the product these can range from anything between two and ten per cent. That is between two and ten percent of your money that is gone as soon as you hand it over. In the event of a stock market company in which your money is invested experiencing severe financial or operational problems it is quite possible that all you will have to show for your investment is a share certificate, a piece of paper of no value and nothing else. In the event of a downturn in property prices you have a property, a property that will still give you a rental income a property that will recoup its value.
The state pension is currently £114 per week. Our Governments forecast is that by 2050 the state pension will be just £135 per week, an increase of just 18.5%, less than half a percent a year. Historically property prices have increased on average by 9% a year. That means that if you buy a property now for £200,000 in 2050 it could be worth over £10,000,000 and of course you will have enjoyed the rental income, at an average yield of 5% your rental income would be £10,000 in the first year.