PHIL AND MARIE: How can we afford to buy more investment property when we’re already subsidising one for £500 a month? 

Phil and Marie had bought a two bedroom flat in London as an investment eighteen months before they contacted us. Their plan was to hold onto it for about seven years then sell it. They had taken out a repayment mortgage and were trying to overpay the mortgage to pay as much off as possible. They were hoping that it would grow in value as it is in London and the profits would help them to pay off a large portion of their own mortgage. There was a large shortfall each month between the rent coming in and the mortgage payment going out so with this and the overpayments they were making, they were putting about £500 per month into this one investment property.

 

They spoke with us about their strategy because they were concerned it may not be the best way to achieve their goals but they couldn’t see what else they could do. They wanted to build up a property portfolio but as they were already committing £500 every month to this property, they just couldn’t see how they could commit to any more property.

 

We sat down together and clarified their goals and their concerns. We showed them figures (best estimates) comparing how their existing strategy would work out financially against other strategies we had thought of for them. They then made their decision as to the way forward. Here’s what they decided to do.

 

They changed their mortgage on the investment flat which allowed them to release some equity by borrowing more money whilst actually paying £200 less each month for their mortgage payment.

 

They used the equity released to buy two new investment properties – one in the UK bought with the potential for capital growth and the other in an under-developed area of Spain with the potential for both capital growth and rental income.   The Spanish property offered the option of a ten year guaranteed rental programme also. 

 

Their plan now is to wait until the properties rise in value enough to remortgage, then to release equity to buy more property. Where six months ago, they couldn’t see how they could buy any more property, they can now see a way forward to meeting their financial goals.

 

 

Rick runs a very successful business providing telephone systems to large companies. Running a busy company meant he was struggling to find time to oversee his existing investment properties properly or to look at new options for investing in property, so he asked if we could help.

 

We immediately took over the legwork to get the three investment properties he had just bought ready to let. This meant sorting out carpets, blinds, curtains, bathroom fittings, appointing a letting agent, filling in the managing agency forms and chasing the letting agent regularly to try to get the properties tenanted. Straight away this lifted a weight off Rick’s shoulders.

 

We then agreed a plan for investing in more property agreeing the criteria Rick wanted any future investments to meet. Using our property portfolio planner, we were able to show Rick how important it was to buy wisely and what the important criteria were that he should look for in a property. We are now finding suitable investment properties for Rick, putting them to him, he makes the decision and then we do the legwork to see it through to completion keeping him informed at every stage. This means that Rick can build up his property portfolio with the minimum of effort on his part but still retain control of all the decisions.

 

Jonathan and Sarah had bought three investment properties all close to where they live. They had also amassed a fund of around £200,000 to use as deposits to significantly build their property portfolio. The problem was they were running their own company and found it incredibly difficult to get the time to properly research and locate good investment property deals. They contacted us for help.

 

We met them and put together a plan for building their portfolio based on their financial and personal goals. In a nutshell, they would like to retire early and live abroad. 

 

Over the next 12-24 months we will find suitable investment property for Jonathan and Sarah and do as much as we can of the legwork involved in buying and letting their new properties. The idea is they make the decisions, but we do the work for them. They get to build the property portfolio they want without all the effort, stress and time it would take if they did it themselves.

 

 

Alex already owned four investment properties when we first spoke with him. He used them as holiday homes for his family and stayed in them for a few weeks each year. He had bought the properties outright so had no mortgage payments.

 

Alex was working at a very senior level for a large company in London. He felt tied to it as the money he earned was good, but he wanted to find another source of income so he didn’t feel quite so trapped in the rat race. 

 

Alex wanted to look at the possibility of letting his holiday homes to bring in another source of income but did not have the time to do the research himself. He’s asked us to help him with this special project.

 

We’ve only just started this project but our remit is to:

 

 

John wants a commercial property for his business to buy and operate from. John’s been planning to do this for a while but has found it kept slipping down the ‘to do’ list. He’s asked us to manage the whole process from beginning to end. This includes researching the local area for suitable property, organising meetings between financial advisors who can advise on putting commercial property into a pension through a SIPPS (self-invested personal pension scheme) and handling any administration for this. Our role is to make it happen.

 

 

Greg and Julie live in accommodation provided by Greg’s employer. They have three young children and when Greg leaves this employment in about five years, they will need somewhere to live. He needs to get on the property ladder but can’t afford to buy in London where he’s working. He has saved up about £20,000 towards a deposit but knows that won’t go far. 

 

As first time investors, they were keen to get on the property ladder but wanted to make sure they were going about it the right way. They’d looked up different property investment companies but found it difficult to know where to start or what approach to take. A work colleague told Greg about our service and how we explain everything very carefully and don’t pressure anyone into investing. So Greg got in touch. 

 

First of all we talked to Greg and Julie about property investment and ways to minimise the risks to make sure they were happy about the whole approach before looking at their financial goals and how property investment could help them. We looked at different ways of investing in property and Greg and Julie made the decision to invest in a UK property. They bought a high quality two bedroom flat with a 12.5% discount for £112,500 in an area previously untapped by investors. We will continue to work with them over the next few years to help them find ways to build up enough equity to afford their own home in the London area when Greg leaves his current employment in five years.

 

 

Our typical clients:

 

If this is you, then we can help you now. To find out more, contact us now. 

 

Email info@propertyinvestorsroad.com

Telephone               01525 877306       

Int’l enquiries             +44 (0) 1525 877306