Having recently learnt that the decision has been made not to offer the tax benefits associated with putting residential property in SIPPS, it is worth reminding ourselves of the long term objective of property investments not just in the UK but Overseas too.
Regardless of whether you put residential property into a SIPP, you should remember that on average, historical figures show that UK property doubles in value every 10-15 years. So if someone said that you could double or even triple your money in some cases, even if it took longer that this, then you would still consider investing wouldn't you even if it wasn't within your personal pension. Plus, you can still put commercial property into a SIPP so you still have the opportunity of mixing your investments which every good property investor would be doing. For some facts on buy to let it is worth picking up a FREE Buy to Let Guide
How to make £166,500 in 15 years
According to research from the Centre for Economics and Business Research (CEBR), the average cost of a home in the UK could be £300,000 by the year 2020. Currently that figure stands at around £157,000 in 2005 which represents an increase over the next 15 years of 91%.
This figure of £300,000 is achieved by the economic forecaster basing its prediction on the ever increasing population compared to a slower production of house building. As with many commodities, it is the result of lower supply and higher demand that will push up these prices.
With buy to let residential investment property, the maximum loan you can apply for is 85%. Based on an average value property in 2005 of £157,000 this would require you to put down a deposit of 15% £23,550 subject to valuation and rental cover which can vary between 115% to 130% in most cases.
Potentially over the next 15 years, this one investment could realize a return of £166,550. This is based on selling the property at £300,000 less the loan of 85% of the property value in 2005.
Over previous years there have been times when property has declined in value and other times where it has signifcantly increased in value but a good property investor will clearly see the benefits in both a rising and declining market and will utilize the facilities of a good buy to let mortgage provider to assist in this.
For example:
During a rising market, a property investor may decide to use this window of opportunity to release some of that equity realized in the value of the property, to use for additional property investment. However, the property investor is less likely to use that capital released during a rising market. Instead, the landlord will wait until the market has re-stablised itself or experiencing a decline. At this point, they will then use this window of opportunity to purchase lower priced property and the circle continues. That is why property investors are in it for the long term and why they see the market as being profitable to them in all conditions. And when you consider that property prices only need to increase by an average of 4.4% year on year, it is easy to see why this type of investment is so achievable.
Successful property investors will do a lot of research on areas that they believe will become property hotspots and areas which are less likely to perform. There are many areas experiencing high levels of growth and financial investment with a lot of regeneration programmes in place or planned in the future. Even by simply monitoring publications such as Construction News can give a good indication of where new commercial premises are being built which can be a good indicator of new businesses moving to the area which it turn can lead to an increase in demand for property locally.
It is the general consensus that interest rates have stablised and there is even speculation of a drop but either way, they have been steady for a good number of months now. Slower capital growth does result in buyers having to put more effort into managing and developing their portfolios. And more importantly making a profit from property. Buying property at discounted prices can be done but you must do your homework to make sure they are genuine discounts and incentives. And don't forget that in a slowing market, vendors will be more likely to listen to your offers. Albeit if they are a bit cheeky. In particular, you can use the negative press that is often surrounded by the property market to your advantage. For example when the media are circulating stories of a dropping property market, then vendors are even more keen to listen to your offers.
How to Get Started in Buy to Let
• Do as much research as you can. You can even get some free publications including Free Buy to Let Guides. Click Here for more information.
• Find out what properties are selling for. A good way of doing this is by contacting estate agents and researching on the internet. A good way is to look at property house price websites.
• What is the level of demand for rental properties in the area.
• What type of property is most in demand. For example, if it is a university city, then the demand for shared student accommodation may be much higher than property for professional sharers.
• Find out what rent is being achieved on those properties and the likely time to get the property let out. Speak to letting agents and local businesses that may be letting properties already in the area.
• Raising deposits for your investment properties, may be easier than you think by releasing equity from any of your existing properties.
So how Do you know if you have bought a good investment
Well there is always an element of risk but providing you follow the main logic you should eliminate most of them. It is also important to make sure you continue to review your buy to let mortgage funding on a regular basis as this can have a big impact on your success and cash flow. As we have said above, the property market can rise as well as fall so providing that you have some cash funds in the bank to help you through any tougher market conditions then you could reap the rewards in years to come. But it's important that you calculate these carefully into your projections to ensure that whatever funding you may need to input into the investment property that it will be outweighed by the eventual gain.
Providing that you are buying a good quality property in a good area with strong rental demand then it's worth considering. Don't just buy a property because it is cheap. You might buy a property at a very discounted price, but if you can't let it, you could find yourself covering the buy to let mortgage payments for months to come which will see a big dent in your profits. Find out why it is cheap. Is there an increase in crime in the area, have plans been submitted for a large industrial unit to be built behind the garden etc, etc. Do your research. And don't be afraid to develop a property for profit. Buying at the right price, in the right area and doing the right renovation on the property, can also see you return a decent profit. Re-financing the property on completion and letting it out could give you the best of both worlds.
Having taken into account all the considerations above, to calculate if it is a good investment, you need to ensure that your annual rental income exceeds the cost of your monthly buy to let mortgage repayments and maintenance costs. And it is more likely that your annual rental income will be stronger if you select an investment property in area with a strong and growing rental demand as it is less likely that you will experience rental voids and be supplementing the monthly buy to let repayments.
So in conclusion the property market is likely to remain a prime choice for property investors as long as they are will to commit to the long term.
Patio Furniture Extend Your Living Quarters
Your living quarters don't have to stop within the perimeters of the traditional rooms like the kitchen, living room and bedroom. Pull your living quarters farther out by dressing up your patio. Patio furniture is the key to pulling the look together.
When searching for patio furniture, consider how exposed to the elements your furniture will be. If you have a covered or closed in patio, you can use furniture that is not suited for outdoors. If your patio is open, be sure to buy furniture that is okayed for the elements.
For instance, there are some rockers that look great on patios but they have a note attached that they are not suited for outdoor use. Something like this must be brought in whenever it is not in use. If you decide you just must have it any way, make sure you have a place in your home or storage to hold it until its next use.
If you decide to buy wicker or rattan furniture, check to see if the manufacturer has warnings against outdoor use. Some wicker and rattan furniture is not meant for use outside, but other wicker and rattan has been specially treated for outdoor use. It comes down to checking the label or packaging to know for sure. If you have any doubt, contact the manufacturer. As the store from which you purchased it for the contact info or look it up on line if you can't find it elsewhere.
If style is not a high concern on your list but finding cheap, practical patio furniture is, check out the resin tables and chairs on the market. The tables and chairs are sturdy. You can even buy resin foot rests, end tables and coffee tables. This type of furniture weathers well in all elements and the only style concern you face with resin furniture is fading or dullness that comes along with being outside. You can find resin furniture at just about any discount store. It's seasonal, so start looking for it to appear on shelves and display floors in the spring. The price for a simple resin chair ranges from $6 to $10 in most places. Chaise lounge chairs made from the same resin are a little more expensive. You can expect to pay $30 to $40 each for those. The price of resin tables varies based on the size. A small table, like an end table or a foot stool, are about the same price as the simple chairs. A large table costs more. The high end of the design in resin furniture is the table with a hole in the middle for an umbrella. In addition to providing shade from the hot sun, an umbrella can really dress up the look of resin patio furniture. A simple green or white table becomes festive when a brightly colored umbrella is thrown into the mix!
So, no matter how much money you have to spend, you can extend your living quarters outside the boundary of tradition. Invest in some patio furniture and you can create an outdoor living room of sorts!
Bob Benson is the founder of Furniture online. You can check out our website at http://www.cheap-computer-furniture.info
Lake Arrowhead: California's Alps
The 2006 Winter Olympics have riveted Americans with the awesome vistas of the Italian Alps. If you're one of the many people who have added the Alps to their list of destinations to visit someday, take heart. There are places closer to home that offer those same stunning vistas. One such place, in fact, is a short drive from Los Angeles, in San Bernardino county: Lake Arrowhead, California.
Lake Arrowhead has been called "California's Alps." While the people of this community have all of Southern California's famous warmth, the mountains, the pine trees, and the climate are totally alpine. Snowy but mild winters make for some of the West Coast's best skiing. In the summer, Southern Californians escape here to swim or canoe in the lake and breathe in the mountain valley's cool, clean air.
Lake Arrowhead, California Real Estate
Close-to-home wonderlands like Lake Arrowhead aren't just great places to visit. Many people in tight real estate markets are finding that such places offer a unique opportunity for owning and investing in real estate. According to Lake Arrowhead realtor Louisa Millington, owning your weekend getaway can save money over the long term. In addition to any possible appreciation of the property value, renting can provide investment income. In the Lake Arrowhead real estate market, you can rent not only to long-term tenants, but also to vacationers at higher vacation rates.
If you check out the Lake Arrowhead (CA) home prices, you'll find that prices are still more down to earth than in much of southern California.
What's most amazing is that if you're not a native of Southern California, you may never have even heard of this place. Perhaps it's Lake Arrowhead's lower profile that has saved it from overdevelopment, preserving its quiet beauty.
Lake Arrowhead Information
Climate:
According to UCLA, Lake Arrowhead enjoys "310 days of sunshine." While that may not impress Southern Californians, Lake Arrowhead also boasts four utterly distinct seasons, including snow on the mountains in winter—yet with daytime temperatures that rarely go below freezing and often reach 60 degrees Fahrenheit.
Things to do:
Skiing. Lake Arrowhead's climate is perfect for skiing: just cold enough for snow, but rarely below freezing during the day. The most popular places to ski are Snow Valley and the Big Bear Lake area.
Blue Jay Ice Castle. A world-class ice skating rink often used by the premier American woman figure skater, Michelle Kwan.
San Bernardino National Forest. The San Bernardino National Forest wraps around Lake Arrowhead, ensuring that much of the area's natural beauty remains open to all, and protecting the area from over-development. Wildlife includes the Southwestern Arroyo Toad, an endangered species. Activities include camping, hiking, horseback riding, and mountain biking.
Deep Creek Hot Springs: one of the most popular areas of natural hot springs in southern California. The springs are located inside San Bernardino National Forest. You have to hike to the springs themselves, but the springs and the surrounding canyon landscape are worth the relatively easy trek.
The Arrowhead Queen. See the lake area from the best perspective: the lake itself, on this enclosed paddleboat.
Lake Arrowhead Film Festival. The theme of the 2006 festival (May 5-7) is "The Future of Film In the Digital Age - the newest in techniques and services that bring strong and innovative movie-making."
Shopping: Check out the Lake Arrowhead Outlet, as well as specialty stores on the south shore of the lake.
VIP and Hollywood celebrity-watching. Lake Arrowhead has been one of southern California's "playgrounds of the rich and famous" since at least the 1930s.
