Property Boom or Slump? The world's financial markets are struggling with a credit crisis, and the so-called experts are issuing warnings that the good times are about to come to an end. 2007 city bonuses do not look like they will hit levels of 2005 or 2006, and as a consequence the Nationwide for example feel that the high end market may suffer, and with it a ripple effect downwards. So is it really a time to abandon property or is it just time to make sure that you really do know what you are doing, make sure that you have chosen your strategy wisely, and rather than continue to speculate make sure that you use your knowledge, education, and training to give you the edge? Remember that anybody can make money, but the professionals make lots of money in bad times, so be prepared if the markets do turn.
Buy to let has been the big story in property investing for over 10 years thanks to cheap mortgages combined with increased house prices, but with prices slowing in certain areas, like the north and midlands, the profits may be a little harder to come buy.
Despite this, many of the Whitney buy to let veterans are not concerned, nor are they hesitant to continue. Rather the opposite, some are actively gearing up to take advantage of any market changes. One recent Whitney speaker bought a £1million portfolio from an amateur who had built up a portfolio without understanding their strategy or without any consideration of how property works. The said investor has ended up with difficult repayment levels, and without the facility to accommodate or the training and knowledge to fix it. Result, the speaker has taken a portfolio with a 26% discount, is in the process of removing some of the dead wood, refurbishing and changing the target market of some of the others, but will then end up with a positive running portfolio, with the added built-in equity. Remember that "Knowledge will pay for itself."
Finally, when looking at a purchase always remember that yield is important. The level of yield that you are comfortable with is your strategic decision, but you are not a charity so you do not want to be subsidising your tenants. |
