PropertY investmentWhen compared with other investment opportunities the Buy to Let property market really is as "safe as houses". Look at the figures and you'll see that average property growth...
property investorsBy negotiating substantial discounts of up to 30% off market value and utilising our unique financing methods, we offer you the chance to invest with very low levels of capital...
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About Investment Properties& What To Look For In Property UK
- High rental yield?
- Price bought below market value?
- Low Supply of similar properties?
- Clear exit strategy?
- Within 5 minutes of your home?
- Finance available, and borrowing rates?
We all have our own personal idea of what is best for us,
and some people will prioritise each of these according to their own experiences.
Our main focus since we started sourcing property has always been to concentrate on good rental yield and look at the most affordable areas of the UK with the best available finance.
So Let's Look at the three main factors to consider when buying investment propertyHigh Rental Yield
If you are buying a property to rent out, then clearly a high rental yield is attractive. A quick reminder on how we work out yield - take the annual rent and divide by the value/buying price. So if you can rent the property out for £500 a month that would be gross rent of £6000 a year.
And if the property is worth £100,000 then the rental yield is 6%. You might like to aim for a minimum of say 7% yield - although this can vary depending on borrowing rates at the time.
Price Bought Below Market Value
Price secured is important - and many would say the discount to value is the most important part of buying as that amount can provide good starter equity which would act as a valuable cushion against market movement. I would agree this is very important, although the yield is still more important if looking to buy to let.
Available Finance and borrowing rates?
This clearly makes a difference, as with the availability of finance, property prices are likely to rise. If lenders are willing to lend a high loan to value (LTV) on property then this gives a good indication that they are happy with the area and the security they provide. Money Market trends however can override these simple rules of thumb!
Borrowing rates are clearly very important; if you can get borrowing rates of 2% below the rental yields then this is obviously more attractive than if the borrowing rates are the same as the rental yields. So these three areas are all very important when analysing a new property deal.
why use us as your property sourcing agentFinding suitable property around the UK that fits the exact criteria of our business and that of our Investors might seem like a daunting task. To have to do this on a daily basis, even more of a challenge. The solution? A network of sourcers and buyers, who operate under licence from us and work within territories stretching from Scotland to the South coast securing properties for us on a daily basis.
Regular National advertising is also used to create daily appointments for our own skilled buyers to visit, assess and negotiate the purchase of suitable types of property. Calls that come in every day are subject to a carefully designed fact find process that determines the viability of the property on offer. All in all, a skilled and comprehensive operation, guided by a highly reliable software system ensuring the viability of each and every transaction offered.
What Is Loan To Value (LTV)?
This is the percentage that a Lender is prepared to advance against the full open market value of the property as determined by their appointed RICS valuer.
Loan to value is one of the key risk factors that lenders assess when qualifying borrowers for a mortgage. The risk of default is always at the forefront of lending decisions, and the likelihood of a lender absorbing a loss in the repossession process increases as the amount of equity decreases. Therefore, as the LTV ratio of a loan increases, the qualification guidelines for certain mortgage programs become much stricter. Lenders can require borrowers of high LTV loans to buy mortgage insurance to protect the lender from the buyer default, which increases the costs of the mortgage.
Low LTV ratios ( typically below 80%) carry with them lower rates for lower-risk borrowers and allow lenders to consider higher-risk borrowers, such as those with low credit scores, previous late payments in their mortgage history, high debt-to-income ratios, high loan amounts or cash-out requirements, insufficient reserves and/or no income documentation. Higher LTV ratios are primarily reserved for borrowers with higher credit scores and a satisfactory mortgage history. The full financing, or 100% LTV, when available is reserved for only the most credit-worthy borrowers.
What Is Buy To Let?
Quick guide to what is buy to let.
A buy to let property is a flat or house that has been bought with the intention of letting out to a tenant on a shorthold tenancy agreement. This will provide an income for the owner, who becomes a Landlord, from the rental that the tenant pays on a monthly basis.