photo credit: hyku

EBay has been on the go for years and so isn’t news, but it is news for me. I watch from a distance as my wife receives an apparently never ending stream of parcels. Stuff comes in and stuff goes out – daily. So what’s all this got to do with property investment and new homes for sale? The answer is mindset.

The mindset of a property investor

I made this connection because of this post which I read on the forum yesterday about a real estate investor and his first property investment opportunities. This post basically says that if you talk to the seller you will learn why they want to sell. Every body’s natural assumption is that anybody selling anything wants to achieve top dollar and yet we know that they don’t because of EBay.

I realize that many people run an online shop through EBay but for many more it’s a great way of moving your stuff on to someone who might enjoy and use it. The alternative is the tip, and some how that would be just plain wrong.

It’s not all junk

We can all look through our wardrobes, lofts, garages and sheds and find a ton of stuff we just don’t want anymore. Some of this stuff has no value, and some of it great value, but it’s just no longer required.

Real estate, homes for sale, houses, and holiday homes can all fit into this category for a variety of reasons, death and divorce being two key ones.

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photo credit: Raul_d50 ** No Video! **Scotland has shown a sharp rise in the number of properties it has selling for over 1 million pounds. In 2006, 144 £1m properties were sold in Scotland, but that rose to 343 £1m properties in 2007.

Only London outstripped Edinburgh for the number of properties sold for in excess of 1 million or more last year. This is quite a funny statement really, because all cities in the world tend to compare themselves to London.

The total number of house sales in excess of £1 million pounds within Great Britain rose by 30% in 2007 to 8,257, so London leads the way by a very long margin.

Financing a £1 Million Property Investment

So how much money would you need to finance a £1 million pound investment property, and how do the figures work? I will use and example of a five year fixed mortgage that I found on The Money Centre’s website.

The product I chose is a 5.89% five year fix, with an 80% LTV and 125% rental cover. LTV means Loan to Value, so the lender will lend 80% or £800,000 which will cost £3,926.67 per month. It doesn’t sound so bad if you say it quickly.

The lender in this case requires 125% rental cover, which means they need to be sure that you can rent the property out for 1.25 x £3,926.67 which is £4,908.34. The purpose of the rental cover is to provide a buffer for void periods while your property has no tenants. So the lender needs to make sure that you are making a profit of at least £981 per month.

You can do it if you think big

Buying a property in this way is more accessible than you think, and virtually every man and his dog can do it. This is because lenders are lending money against a business proposition, which they will verify themselves to ensure that the property stacks up for both capital value and rent. If they are not satisfied that the property meets the valuation – they won’t lend.

Property investing and property investment is about being shrewd, being dynamic and being on the ball. A property investor sees opportunities to make money and works out how to make a purchase – you would be surprised what can be achieved with a little ingenuity. Investment opportunities are all around, you just have to look.

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photo credit: smellykneeA real estate development moments away from Disney World in Orlando of luxury apartments, is particularly tempting to British property investors because of the continuing strength of the Pound against the Dollar.

Rental Yield of Almost 7%

Currency fluctuations aside the yield on these new homes for sale is almost 7% which is definitely not to be sneezed at. The developer sites an example of a two bedroom condo with a price tag of $360,000 with an anticipated rental return of $25,000 and a three bedroom condo priced at $390,000 with a rental return of $27,000 per annum.

A Property Investment You Can Use

If you’re looking for a property investment that you can use yourself for family holidays, this might be just the ticket as the scheme offers two weeks per year in low season. For further details visit the Feltrim Developments website.

Do Your Research

If you are interested give them a call and get all the information, then do your research to see what else is on offer in the area. If you like what you see – make them an offer – a good piece of negotiation now could save you a fortune. Remeber the US economy hasn’t been too clever recently so there may be bargains to be had. It’s got to be worth a punt.

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There has never been a better time to get into property investment. UK Real Estate developers are feeling the heat as properties are being down valued, leaving easy pickings for savvy property investors with an eye for a bargain.

It sounds incredible but it’s true. The rule is – when no one else is buying, buy and when no one else is selling, sell. The media are giving out the message that there are hard times ahead in the UK real estate sector, and they are right. So now it’s a question of how you react to this news. Most people will run for cover leaving a few to make a killing.

The UK realestate market has been hard hit over the past few months and the situation appears to be getting tighter. This doesn’t make for great reading if you are one of those property investors due to complete soon. It is common knowledge that real estate valuers are lopping lumps off the open market value of properties they inspect even before they get out of their cars.

To make things worse mortgage lenders are getting tough on off plan with many giving it a wide birth, and those who are lending are strict. You will need a large deposit and you will have to pay a higher mortgage rate, so before you dive in do your sums. Shop around and look for a good mortgage broker, see what mortgage rate various lenders are offering and use a mortgage calculator to check out the monthly cost. There are plenty of mortgage calculators around so just type ‘mortgage calculator’ into your favorite search engine to find one.

If you’re sharp you will get a bargain in the current market, although it will be a property investment that you will have to hold on to for the next three to five years. So it might be worth looking at mortgage products with a fixed mortgage rate.

But don’t just take our word for it. We spoke to Lynsey Sweales of The Money Centre, and this is what she had to say:

>”Although there is lots of doom and gloom in the press about mortgages and the property market I think now is a great time to expand your portfolio. As the number of property purchases is down more people will be renting, as properties are not selling you can put in a cheeky offer.Good products are still around but they generally don’t stay round for long. By speaking to a buy-to-let mortgage brokerage they can help you on what products are currently available and also contact you when a rate you are considering is about to be pulled.

Brokers are worth their weight in gold more so than ever in this climate; speed of offer is of the essence and some brokers like TMC do have access to exclusive products.

If you choose the right property by doing your research and get on right product you are in a very good position.

If you already own property where there is a lot of equity tied up in it or you may not have reviewed the mortgage for a while you should be talking to a broker to get a free portfolio review. Even if you don’t buy another property it is important to have cash in the bank to help back up your portfolio.

Our clients are currently remortgaging existing properties as well as purchasing more properties to rent out, they are taking advantage of the market.”

Where as Jonathan Moore of Mortgages For Business added this:

“The majority of Buy to Let mortgage lenders are now refusing to lend on new build property due to fears of oversupply of this property type, particularly in city centres such as Leeds. The few lenders still in the new build market are risk adverse and will pay particularly attention to the valuation looking at the lower of ‘true market value’ or purchase price minus any discounts.

It could therefore be likely investors could pick up new build properties at substantial discounted prices to those being asked for six months ago, however they will need to be in strong financial position and have the ability to pay large deposits. It is important investors approach the sector with some caution”