Slater Heelis Property Seminar 8 July 2010 Chris Foster DTE
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1 Property Investment 8 th July 2010
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Chris Foster of DTE Financial Services presents insight for property investors on how to finance, cash/borrowing means, comparing property to other investments, and which vehicle to use - e.g. SIPP/SASS, personal, etc.
Transcript of Slater Heelis Property Seminar 8 July 2010 Chris Foster DTE
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Property Investment
8th July 2010
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TopicsTopics
- How to finance
- Types of property investment
- How to invest
- How does property compare
- Which vehicle?
- Other ways of investing in property
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FinanceFinance
- Cash
- Secure on own property
- Secure on property to be purchased
- Unsecured
Beware funding if developing as you can be trapped between a self build and standard mortgage.
Credit history is vital
Cheap. Inflexible(relatively). Risky. Cheap. Inflexible(relatively). Risky.
Slightly more expensive. Less risk.Slightly more expensive. Less risk.
Commercial: Typically 65% LTV and Libor or base + 3%Commercial: Typically 65% LTV and Libor or base + 3%
Residential: Max 75% LTV and perhaps SVR+3.5%Residential: Max 75% LTV and perhaps SVR+3.5%
ExpensiveExpensive
Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.
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FinanceFinance
Mortgage approvals in 000,s per month.
Source: Bank of England
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CommercialCommercial
- Where to find it?
Internet – ignore paid links on searches.
Examples: (does not mean we endorse these sites) savills.co.uk knightfrank.co.uk
primelocation.co.uk auction.co.uk
- Can be complex and time consuming
- Risky (depends on leaseholder etc.)
- Use for own business, pure investment or combination.
- Some direct tax planning opportunities
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ResidentialResidential
- Familiar to most people
- Can be problematic if managing yourself
- Relatively simple
- Good supply of tenants
- Fluid market
- Relatively easy to sell
- Direct responsibility (gas checks etc.)
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Useful Research- Internet is invaluable as you would expect – for example:
- www.auction.co.uk
- www.upmystreet.com
-UK land registry.
-Google Earth and Street View.
-Local council for planning permissions etc.
-Also speak with local estate agents about general areas etc.
-Look in the local newspapers.
- Ask neighbours whether commercial or residential, or even the corner shop.
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How does property compare?How does property compare?
Nationwide Property Index 1985 - 2009
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Commercial Property PerformanceCommercial Property Performance
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Buying within a pensionBuying within a pension
SSAS/SIPP
Tax efficient
Restrictive
Liquidity can be a problem
Further cost layer
Can only be commercial or collective
A common route is to buy your company premises in a SSAS/SIPP.
Can receive tax relief on “way in” (beware CGT/Stamp Duty)
Rental paid to your pension scheme
No tax paid by the scheme
What happens when you retire?
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Which vehicle?Which vehicle?
Specific Tax Wrapper
BPRA funds – tied up for long time, difficult to find but significant tax reliefs available.
Other vehicles around
Offshore vehiclesOften not all they appear to be. Very risky.Risk is attached.Did I mention they are risky?You may lose all your money
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Alternative ways of investingAlternative ways of investing
Property funds
Either direct or shares
Simple
Diverse
Relatively liquid
Ground rent or student accommodation, LCF
Funds which invest in alternative property based assets
Structured Products
Track property indices with some capital safety
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SummarySummaryProperty can be a great place to invest.Property can be a great place to invest.
Funding is far more difficult than it used to be.Funding is far more difficult than it used to be.
There may be further falls in values across all sectors, but no one can There may be further falls in values across all sectors, but no one can predict “the bottom”.predict “the bottom”.
It can be very risky, but a straight forward buy to let or commercial It can be very risky, but a straight forward buy to let or commercial venture is often a great investment.venture is often a great investment.
Don’t be over ambitiousDon’t be over ambitious
If it looks too good to be true – IT IS.If it looks too good to be true – IT IS.
The contents of this presentation do not constitute advice. Do not rely on opinions stated herein.
You must seek advice from a qualified professional before buying property or investing money.
If you don’t you could lose all of your money.
