Is This The Best Time To Buy Property In The Last 5 Years?

By Author: property secretes
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I was discussing this with an investor last week and we both agreed that the opportunities just now are fantastic! What makes this the best time to buy? Quite simply the affordability and the strong rental yields that are now available.
You can buy properties with excellent in built equity on day one - giving you fantastic wealth.
Previously, we would buy and recommend buying a house at say £50,000 on an 85% mortgage - putting your 15% deposit in plus buying costs - so total in of say £10,000.
After 18 months would expect capital growth of say 10% per annum and so a value of £57,500 now. So your £10,000 when invested was worth £10,000 and after 18 months is worth £17,500. You could then refinance and reinvest! There are costs for doing this, both finance and legal costs.
However this worked well over the last 5 years and allowed investors, as long as you managed your cashflow, to build up good equity and wealth. This is now harder to do as you can only get 75% loan to value mortgages so will have to wait longer to draw funds out ie wait until prices have risen by at least 25%.
Nowadays with ...
... the right team you can buy into attractively priced property (i.e. under £100,000) with strong positive cashflows and get excellent built in equity. For example we are able to package deals where you can invest say £6-7000 all in and get an instant £20-25,000 of equity! I.e: buy a property valued at £100,000 and only have a £75,000 mortgage. No having to wait a year or 18 months and paying expensive re-financing costs!
The cashflow on these deals works really well as well with just 75% borrowing, as opposed to the 85% mortgages previously available. In the past we were very against so called low money down deals simply because the figures didn't work and these were dangerous deals for investors to do.
Ie buy an over priced city centre apartment at say £180,000 that would only rent for around £650 a month - not a nice deal even if you get into the deal for no money as you will be paying thousands each year to cover your borrowing costs. Nowadays this method can work brilliantly and allow you to not only get a strong positive cashflow property but you can spend around £6-7000 and immediately make around £20-25,000 of equity - based on today's prices.
So if you have say £30,000 you could buy 4 properties and easily gain around £100,000 of equity - ie for every £1 invested get around £3 straight away! How good is this?! If I could get unlimited mortgages right now, I would be buying everything in sight that fits to this formula as the next 6 months can allow huge wealth plus positive cashflow to be built up which will secure many people's financial future.
Can you think of any other investment right now that will give you this instant 300% return and good cashflow?
One of the investors I met in London said he could never understand why we never promoted the city centre apartments before, and were always keenest on terraced houses - but understands now why this type of investment - affordable property under £100,000 that appeals to investors and owner occupiers alike - is the most appealing and makes excellent investment sense.
Another investor said over the weekend she thinks the deals are almost too good to be true - and she's right we are very spoilt with how good these deals are right now! To be able to turn £30,000 into £100,000 in equity could safeguard your financial future. We sourced 5 properties that worked in this way last week, and not surprisingly they all were snapped up within hours by our investors.
As discussed earlier, I would be buying all these if I could get unlimited finance right now - that is the one restriction right now, but there are still good lenders out there lending to us and our investors.
I hope these figures are clear, and you can understand just how brilliant this opportunity is right now to build up some quick and instant equity!
A Typical Deal
Purchase
Valuation: £100,000 Buying Price: £100,000 75% Mortgage: £75,000
Buying Costs
Total costs - £5,999 + VAT to inc finance fees, legals and finders fee!
You will have £25,000 equity on day one!
Ongoing Cash-flow per month
Rental Income £525
Mortgage* £343.12
Insurance £20
Management £52.50
Profit £109.50
As you can see a very attractive deal, and giving you an instant return! With no attraction in saving at the banks, or in pensions, more and more people realise the importance of investing in well priced bricks and mortar.