The Profitable Way To Invest In Property
17th Oct 2005
The Profitable Way To Invest In Property
By: Damian Qualter
"With the benefit of hindsight I realise that when I embarked upon the search for my first property investment, it was more with optimism than in-depth knowledge of the territory." So says Damian Qualter, Chairman Qualter Properties & MD of BuyProperty4Less, the Manchester based specialist off-plan property investment company.
"I imagined it would be relatively simple. In essence, conduct research, find a desirable property in a reasonable area, wait for the market to rise and then cash in on my good business acumen. But of course it wasn’t quite as straight forward as that.
At the beginning I experienced a pretty steep learning curve however, several years later, I am in the privileged position of providing property opportunities to other investors and, I believe, have made the whole process easier and the potential investment return for clients greater."
So, like Victor Kiam, famous for coining the slogan: "I liked the shaver so much, I bought the company" (Remington), Damian found he enjoyed the challenge of property investment and decided to concentrate his efforts on building a ‘user friendly` company to provide investors with the inside knowledge and resources that he had lacked when he started out."
In less than 2 years Damian Qualter built a portfolio of over 30 properties across the UK and Europe, worth over £5.5m and with equity in excess of £1.3m. So how and where should a property investor start – or build on - their portfolio to benefit from the changes in global property markets, the expansion of the EU and opportunities at home and abroad?
A straightforward property investment purchase. When investing in property in the UK this transaction can be relatively simple. However, before signing on the dotted line, decisions must be made on how to maximise the potential of each investment. Is the property a buy-to-let with an annual rental return as well as a medium to long-term return on sale? Will it be a renovation project to increase the value and then be sold on quickly to release capital? It doesn’t matter whether it’s in Manchester, Liverpool or Leicester, the first, and same question needs to be asked – how can I best capitalise on this investment opportunity?
When looking for buy-to-let properties in the UK it’s important to consider the geographical area and the potential rental market. Cities and towns with universities and colleges provide an ideal starting point. For example, Manchester is home not only to UMIST but also Manchester Business School, both of which attract under-graduate and post-graduate students from home and abroad and thus provide a constant resource of willing tenants. Areas that attract major inward investment, improved infrastructure or business relocation are all indicators of growth and predicate a potential change in status, so early investment in property will generally produce excellent returns.
Ashford in Kent is a prime example of how the future of a small town was changed forever when in February1986 the Fixed Link Treaty was signed in nearby Canterbury. Almost twenty years on, with the International Station up and running and the high-speed rail link on its doorstep, development continues apace and with little end in sight. The town’s position at the ‘gateway to the continent` ensures that commercial, business and residential expansion is set to continue for the foreseeable future and, even though it would have been better to invest in the late 80s, there is still potential today. Why invest now? … or the SIPP advantage Media across the UK are reporting on the benefits of the Chancellor’s forthcoming relaxation in the pension rules (effective from April 2006 – A-Day), which will benefit UK taxpayers.
From A-day on, or until the rules are reversed, Self Invested Personal Pensions (SIPP) portfolio funds may be invested in residential as well as commercial properties*. If completion falls after `A Day`, and therefore the properties cannot be lived in prior to April 2006, they can be bought through a SIPP and attract up to 40% tax relief. Consequently higher rate taxpayers fund only 60% of the purchase price and the government make up the difference. Now add the fact that buying off-plan can attract discounts of between 5% and 20% on release-price and the prospects for growth are even greater. And what about properties abroad?
Damian Qualter says: "Having successfully invested in our property opportunities in the UK, Members of our Property Investment Club were keen to source similar prospects overseas. A number of them required dual-purpose property, both for their own use and with the additional benefit of a rental return, whilst others saw the exercise as a simple investment - short term with a view to selling on completion, or longer term to accrue further growth." ‘Jet to let` owners eagerly await the relaxation of rules governing SIPPs. From April 2006 experts predict a wave of buyers looking for overseas ‘holiday homes` in which to invest their personal pension, especially to destinations such as the Balkans where, they can profit from low prices.
Accessibility isn’t a problem; four international airports serve Bulgaria - the biggest being in Sofia. Direct flights from major UK airports take just over 3 hours and there is now talk of Ryan air including it in their list of destinations. One small glitch is the Bulgarian Act on Foreign Investment, which allows foreigners to buy buildings but not land. This restriction can be avoided by forming a Bulgarian company, which then owns the land. But then there are several UK specialists able to make the purchase relatively simple - even promising to help set up a Bulgarian company for less than £750.
And the good news is that this law on foreign investment is due to be reformed before EU membership in 2007 although investors are urged to buy early as the current bargain prices are not set to last. Whether investors choose to include property in their pension plans or not, there are still compelling reasons to consider bricks and mortar as part of an investment portfolio.
If not philanthropic, the motivation of investment is to make money. Managed correctly, property investment can and will offer exceptional returns. What next? A reputable company such as BuyProperty4Less is able to provide testimonials from satisfied clients as well as documented evidence of growth. If companies cannot substantiate growth in the investment opportunities they have provided in the past, then caution should be taken before signing up.
BuyProperty4Less clients are able to capitalise on the expert advice available and each client is allocated a personal advisor to answer any questions they may have. There is ongoing research into new property investment opportunities and horizon scanning into emerging property markets. Members of the BuyProperty4Less Property Investors` Club are issued with advance information on new investment opportunities as soon as they are secured, ensuring that they have first option to purchase when developers release their plans. Damian Qualter is well known and respected by property developers, national and international agents alike. Because of this, BuyProperty4Less is in the privileged position of being offered frequent and exclusive off-plan property investment opportunities at discounted prices for their clients. Whatever your age, can you afford not to become part of the new property investment generation?
Article Source : www.propertysold.ca/articles/Real-Estate-Investment/The-Profitable-Way-To-Invest-In-Property