Equity Release – A Good Way To Fund Investment Property

Investors are always on the lookout for new and better ways to make their
money work for them. There’s a lot of hype surrounding equity release,
but what does it really mean and is it really a good way to fund a growing
investment property portfolio?

Key forms of equity release

Equity release takes two key forms. The first is the one that we see advertised
on the television at an alarming frequency and is aimed at older households
that want to gain from the value in their property by releasing some of the
cash without actually selling. Effectively, they are selling part of their
property in return for a cash lump sum. Interesting as this may be, it is not
really what we mean when we talk about equity release for investment property.

The equity release that we are looking at as property investors is a little
different. Here the idea is that you may have bought a property for a certain
amount and over a period of time, through the growing market or through renovation,
the property has increased in value, by say £20,000. By approaching your
current mortgage company to increase your mortgage by £20,000 you will
then be releasing some of the equity in your house to pay the deposit on another
buy to let property, and so the chain continues.

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Popularity: 11% [?]

Equity Release – A Good Way To Fund Investment Property

Investors are always on the lookout for new and better ways to make their
money work for them. There’s a lot of hype surrounding equity release,
but what does it really mean and is it really a good way to fund a growing
investment property portfolio?

Key forms of equity release

Equity release takes two key forms. The first is the one that we see advertised
on the television at an alarming frequency and is aimed at older households
that want to gain from the value in their property by releasing some of the
cash without actually selling. Effectively, they are selling part of their
property in return for a cash lump sum. Interesting as this may be, it is not
really what we mean when we talk about equity release for investment property.

The equity release that we are looking at as property investors is a little
different. Here the idea is that you may have bought a property for a certain
amount and over a period of time, through the growing market or through renovation,
the property has increased in value, by say £20,000. By approaching your
current mortgage company to increase your mortgage by £20,000 you will
then be releasing some of the equity in your house to pay the deposit on another
buy to let property, and so the chain continues.

Read the full story

Popularity: 10% [?]

Property Syndicates

With more and more investors deciding to put their money into property, the
topic of property syndication, or pooling of resources, is often thought of
as a great way to extend a portfolio and enjoy economies of scale. However,
property investors joining forces should consider some important factors, before
diving in!

Property for your pension plan

Property syndicates have only really come into the forefront of investors’ attentions
since Gordon Brown did a u-turn on the proposals to allow investors to use
residential property as part of a personal pension plan. When it was announced
that investors would no longer be able to use a personal pension plan to enjoy
tax relief on residential property, there was a renewed interest in property
syndicates that would still, in certain circumstances, attract favourable tax
treatment.

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Popularity: 11% [?]

Financing a Self Build Property

Investors are becoming increasingly aware of the money that can be made out
of building property. This is all well and good; however, the financing of
these ventures can be very complicated, putting many investors off an otherwise
sound investment. Don’t be one of them!

Buying Land

Buying land in order to develop one or more properties is generally considered
a sound financial investment, particularly for those with building experience
who can cut the build costs to a minimum. Having said this, the process can
be a lot harder, with plenty of hurdles that can easily trip up the inexperienced
investor.

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Popularity: 9% [?]

History Repeating Itself
Always, always, always ask for references before taking on any tenants. If
you are using an agent to locate your tenant, make sure that you see the
references that they have obtained. After you have asked for a reference,
make sure you take the references up and that you verify they are genuine.
Whilst this may be seen to be overkill and it may be tempting to speed the
process up by ignoring references, fail to do so at your own peril. Problem
tenants can often be found to have been troublesome in the past, so do your
research and save yourself falling into the same trap as those before you.

Planning for Perfection
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Popularity: 7% [?]

Are We Heading for Bust?

Almost every property investor or individual involved in the property market
has considered the danger of a property price crash. Although opinions differ
on the likelihood that this crash will happen, the real key to success for
the forward thinking investor is to have an accurate idea of what causes a
property crash and then to protect your position - before the rest of the market
follows you!

The last property crash occurred in 1990. What were the key factors that drove
this crash and are we in the middle of a set of circumstances that will see
history repeating itself?

Before the crash in 1990, there were seven years of continued price increases
in the property market, the same as we have witnessed in the last seven years.
Margaret Thatcher lost power as the property market crashed, with many economists
blaming the political uncertainty for the crash in the first place. Of course,
there is thought to be a degree of political uncertainty surrounding Tony Blair’s
situation, currently.

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Popularity: 20% [?]