WHY INVEST IN PROPERTY?
According to the Times Rich list 40% created their wealth through property. The other 60% invested in property as a means of growing and protecting the wealth that they created in other industries. In fact more millionaires are made from property than any other investment.
Unfortunately most of the population will die poor. Not only are we living longer lives, but the Government is struggling to support us into our retirement. Pension schemes are becoming more and more unreliable and people want and deserve more financial security as they reach retirement age. You do not want to have to work forever nor do you want to suffer from a poorer standard of living during your retirement years. The best way to secure your financial security for the future is by taking action and investing now.
There are basically three things we can do about this...
- Invest in precious metals
- Invest in the stock market
- Invest in property
From our experience, we have found that investing in property is by far the most risk-averse, hands off and financially rewarding option. One of the main reasons is that the UK has always been and will always be a hugely popular place to live. History has shown that property has always seen a steady increase. In the UK house prices on average double every 9.5 years, these types of figures are unheard of in any other investment field.
However, the main reason that investing in property performs so well, is because we can invest using other peoples money. This can be in the form of a loan or a mortgage from the bank.
This is very important when it comes to investing as it allows you to increase your wealth faster and to much higher levels compared with other investments.
For example, if we had a sum of £50,000 to invest then we could buy £50,000 worth of shares. If they performed well and achieved a growth rate of, say 7% per annum, then after 10 years the value would be £98,358 (say £100,000). This is a 100% return on our investment!
If we used this same money to purchase a property sourced by MD Property Investments then you would be able to purchase a property worth approximately £160,000. As mentioned previously, this is achieved through using a mortgage or other lending facility. Given the current market conditions let’s assume that the property market also increases in value by 7% per annum (even though it increases at a higher rate in normal market conditions). After 10 years the property has increased in value from £160,000 to £314,744 (say £315,000). Our original investment of £50,000 is now worth more than £265,000. That is a return on our investment of over 500%!
However, we must remember that we will have interest to pay in borrowing this money. But the great thing is that this cost will be covered by tenants who will rent the property from us and there will almost certainly be a surplus income which we can spend however we want. Therefore our investment over time will see a capital increase as house prices rise in the area and you will be able to receive a monthly income from the property to help pay for your day to day life. By repeating the process for a number of properties it can be seen that a person could easily replace their current income with the rent they receive from their portfolio and by the time they come to retire they will have build up a substantial amount of equity, enough to support them and fund their lifestyle.
If we take an example property that yields 8%, this equates to an annual rental income of £8,400 at £700 per month. The typical deposit needed to buy this property would be 25% which equates to £26,250. The bank therefore would lend you £78,750. If we work to a conservative interest rate of 4%, the monthly interest payments would be £262.50 Leaving us with £437.50 each month. These types of figures are easy to replicate from properties sourced by MD Property Investments, therefore if this process was to be repeated 5 times, the investor will have secured himself a monthly salary of £2,187.50 and let us not forget that as the years pass buy the value of the property is rising and increasing your capital.
Investing in property is both useful and flexible for many reasons. Aside from the obvious financial gains, it can be used to help you achieve specific goals. For example, if you want:
- To earn a higher interest rate than leaving your money to sit in the bank
- To earn a higher interest rate than bonds, ISA’s and other saving schemes
- To build a portfolio that will give you enough income to retire
- To earn more money to improve your lifestyle
- A hands off investment that requires very little of your time
- High yielding returns on capital
- To invest for your children’s future
- A safe and secure investment
It is important that you know what you are trying to achieve from investing in property. Realising this will help you plan an investment strategy and work towards achieving those financial goals.
MD Property Investments is a property investment company, founded by Matthew Whitehead which not only provides property investments for clients. But also takes the time to analyse a clients specific needs and goals and help them achieve this through property.
We research, analyse and interpret long-term property market trends so you can be assured that your investment is as low risk as possible.
DISCOUNTED BUY TO LET PROPERTY
Buy-to-let property is now a very popular form of investment due to its potential to provide a healthy rental income and capital growth. With the number of people renting privately owned accommodation on the increase and the number of tenants continuing to rise, now is the ideal time to jump on board and take advantage of our property opportunities, with low prices, great yields and instant equity gain from day one.
With buy to let investment, profit can be achieved in two ways:
Rental Yields - the amount your tenant(s) pay in rent, minus any maintenance and running costs
Capital Growth - the profit you earn when you sell your property at a later date with capital gains.
Our safe and secure, buy to let investments are perfect for investors looking to successfully build their own property portfolios, or for those looking for a higher return than they currently get from banks, pensions, bonds and the stock market.
We have heavily discounted buy to let property available for sale in excellent rental locations within Greater Manchester, where void periods are kept to a minimum.
Manchester, following the huge economic investment over the last decade has become an extremely trendy place for young professionals to live meaning that rental demand has remained consistently strong for several years. Using our ability to negotiate bulk deals, our investors are able to achieve yields that far surpass those found in any other major cities around the UK. We are proud to be from Manchester and we use our local and property knowledge to stay ahead of the game and bring the best yielding properties at the best price in the best areas.
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