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INVESTING INTO RESIDENTIAL PROPERTY

INVESTING INTO RESIDENTIAL PROPERTY. ABOUT US. Established 1990 Nationwide coverage through regional account managers All former lending managers with various banks Strength in numbers - volume business Founder members of the National Association of Commercial Finance Brokers.

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INVESTING INTO RESIDENTIAL PROPERTY

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  1. INVESTING INTO RESIDENTIAL PROPERTY

  2. ABOUT US • Established 1990 • Nationwide coverage through regional account managers • All former lending managers with various banks • Strength in numbers - volume business • Founder members of the National Association of Commercial Finance Brokers

  3. We are recommended by: • ARLA - the Association of Residential Letting Agents • Many University Accommodation officers • NFRL - the National Federation of Residential Landlords • Most regional Landlords Associations • Etc., Etc., Etc.

  4. YOUR QUESTIONS ANSWERED • Why borrow? • Who to borrow from • Alternative funding strategies • Future Purchases

  5. LENDING SOURCES High street banks? Recent survey said 96% would approach own bank..... but, are they the best ?

  6. THE HIGH STREET BANKS • Inconsistent? • Policy - is funding for property flavour of the month? • Attitude of manager very important • A change of manager and.......?

  7. HIGH STREET BANKS DRAWBACKS • Facilities almost always repayable on demand • Subject to annual review - one year’s poor accounts and facilities can be restricted ..... or even withdrawn • Usual term 10 years - restricting cashflow hence expansion • They are.....

  8. ..... IN CONTROL!

  9. WE CAN HELP YOU BY:- • gaining an understanding of your requirements • suggesting options available to you • exploring alternative strategies • identifying the most appropriate lenders • presenting your proposal in the most effective way possible • negotiating optimal terms

  10. PLUS POINTS • Our advice is independent • We transact business with over 40 lending institutions • We specialise in advising about mortgaging residential investment properties • Viability is our lenders prime concern - NOT YOUR SALARY

  11. AN ALTERNATIVE STRATEGY PAY INTEREST ONLY HOW DO YOU FEEL ABOUT THIS?

  12. GIVE IT SOME THOUGHT

  13. WHY BORROW? • Because loan interest rates are often lower than rental yields - i.e. cashflow generation • Because property increases in value

  14. CONSIDER THE FACTS • City analysts are predicting a 100% rise in house prices over the next 10 - 15 years • Sounds too good to be true doesn't it? • When did you purchase your first house? • How much did you pay for it? • How much would that house sell for now? • Get the message?

  15. CONCLUSION • If borrowing to invest into property makes sense why be so eager to repay? • Why not utilise cashflow to maintain your properties or for further expansion?? • Why not expand to the maximum and sell part of your portfolio in years to come when you wish to repay your loans? • LET INFLATION REPAY YOUR LOANS

  16. CAN 100% OF THE PURCHASE PRICE BE BORROWED?

  17. YES - if there is enough equity in properties already owned

  18. FORWARD BUYINGFACILITY What is it?

  19. A line of credit • Giving you the ability to purchase on the same terms as a cash buyer - e.g.... auctions, distress sales, probate, repossessions, etc.... • Use existing equity..... instead of having to find a cash deposit! • A Forward Buying Facility is........

  20. ...RATHER LIKE HAVING CASH ££££

  21. HOW DOES IT WORK? • Mr Smith has a portfolio valued at £500,000 • Present loan £300,000 • Term - 10 years • Almost 100% of rental income is used to service the loan!

  22. FIRSTLY HE SWITCHES TO INTEREST ONLY.... So that he can enjoy his profits now, and allow inflation to repay his loan

  23. WHAT NEXT? • Mr Smith remortgaged his portfolio to the maximum - i.e. 80% of £500,000 is £400,000 • £300,000 of this was used to repay existing loans • This left him with £100,000 • Using his FORWARD BUYING FACILITY the £100,000 was regarded as his 20% deposit which allowed him to purchase further properties costing £500,000

  24. Who is IN CONTROL now?

  25. THE OUTCOME • Mr Smith has doubled his portfolio and increased his net income • Inflation will increase the rent roll as well as the value of the portfolio • but not the loan or the cost of it • Therefore, will Mr Smith’s good fortune continue ? !!

  26. CAN IT GET BETTER? • THE MONEY CENTRE has negotiated exclusive deals with lenders offering: • 80% Loan to value • Interest only - if required • No compulsory insurances • Discounted fixed interest rates • Take a regular look at the rates and terms on our web site

  27. Thank you for your time and attention. We hope this presentation has been of interest to you and leaves you feeling......

  28. rather like one of our clients

  29. IN CONTROL

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