All Posts By

Stuart Williamson

The APW Investor Profile Series: the Dubai expat

By Blo The luckiest generation: who really had it best when buying property?g No Comments

 

Expats around the world live very different lives; however, there are some things they share in common.  The importance of diversified portfolios for future retirement income is a widely held anxiety.

We’ve taken a look at the stories of different investors, here and here, and in this article we look at an interesting case of a Client based in Dubai, UAE.

Martin is a British expat, aged 44, from the Midlands. He runs a successful recruitment company in Dubai. He’s been working in this field for a good decade and more and would like to retire by the age of 50, with an intended career change.

Martin already holds a well-diversified portfolio of one- and two-bedroom residential buy-to-let properties throughout the economic strongholds of the Midlands and the North. He also has a percentage of his assets invested in stocks and shares. Martin is concerned at this point about diversifying away from residential assets and is looking to cast the net wider.

Investor worries

Plenty of factors play in the minds of investors, and in Martin’s case, Brexit was an influential worry. At the time of purchase (late November 2018), the Prime Minister’s deal was emerging in Parliament and uncertainty about withdrawal from the EU in March 2019 was reaching a fever pitch.

By diversifying to an asset and income stream that was whole dependent on the domestic market, Martin felt he had to mitigate risk as best he could.

Stock Market Corrections

Guiding the decision to divest from the stock market, was the acute sense that a correction is on the way.

Typically, market corrections tend to upset the stock market every 7 – 10 years. This wipes out a proportion of the value of the portfolio: it is similar to a minor recession. The last one was the Global Financial Crisis of 2007, and in his judgement, a similar event is going to occur in the next few years – with the potential to wipe out a tranche of their portfolio as the market corrects itself.

The APW solution

With these considerations in mind, we researched the market and suggested a buy-to-let care home unit in Manchester. A Studio apartment for sale at GBP74,999. These units provide a rental yield of 8% ­– or GBP5,999 per annum, rising to 10% after four years.

Martin had sufficient capital to cover the purchase with cash, but in order to guard against any future stock market corrections, he chose to pay 50% from savings, and liquidate the other 50% from the stocks and shares portfolio.

The client was attracted to the approach because the concept is simple and straightforward to understand. In return for investment, investors get a title deed, leasehold and a fixed quarterly return. In fact, it’s just like buying any other sort of property.

What’s more, care homes are a domestically-driven market, but this is a market with very strong fundamentals. Furthermore, it’s absolutely Brexit-proof.

The reason it’s so strong is that the UK population is aging, with the over 85s becoming the fastest growing demographic. In fact, it’s estimated to grow by 106% by 2030.

Furthermore, the combined market value for care for older people in the UK is currently estimated to be worth £22.2bn of which £13.4bn is attributable to residential care. As the number of elderly people increases in the UK so will the market value of care and the demand for modern, fit-for–purpose care homes. From 2005 to 2013 alone there has been an increase of 22% of residents living in care homes.

How it works

The residential care home purchase is conducted through UK Land Registry, and clients will receive a Title Deed. It pays 8-12% annually as a fixed return.

It’s not off-plan: it’s already built, therefore the risk is lower.

It is shielded from Brexit, leverages the demands of a rising population in the UK and is based on a fundamental undersupply of housing for the elderly.

It’s based in pounds sterling, but is a commercial property asset and there are no ongoing costs after purchase, and no Stamp Duty to pay either.

Property Management

The next area of concern for the investors is of course the question of management of the property itself. Naturally, this would be very difficult to do from Dubai. However, the management of the care homes is taken care of by the care home providers, and after covered by government funding, meaning that the 8% is paid to the client net. With no additional charges after property purchase.

The End Result

The end result of these efforts was that, the client had purchased  income producing asset, that is ring-fenced from Brexit, a stock market creation and diversified from their existing portfolio.. it created a income straight away, with no additional cost. The client plans to purchase one more per year before retirement, in order to build a income to fund his career change.

See more APW property ideas here

Steel House

By London, Properties

GBP 314,950 | 4.50% R.O.I.

Location: Slough, London

Steel House is located in the heart of Slough, just five minutes from Slough train station. With the new Elizabeth Line starting from December 2019, London key locations such as Canary Wharf, Bond Strt, Liverpool Strt, Heathrow etc will be easily accessible from Slough..

Property For Pension

Property is an excellent investment for retirement. Providing income for life.

Investor Safeguards

Including a builder’s warranty on all new build property, plus ‘step over’ insurance. You are protected.

Flexible Payment Plans

Purchase property without the need for a large deposit – build this up on a monthly basis.

Tenancy Assurances

Our properties are in areas of high demand with high rental yield. This should not make tenancy a problem.

Capital Appreciation

In the long term, property prices always rise. With some areas of the UK forecasted to grow by 30-40% in the next five years.

No Large Sum Deposits

Our payment plans generally only ask for a small sum at outset, and then 24 installments to reach the final balance.

Join hundreds of investors in receiving regular returns, knowing that your money is safe in a ‘bricks and mortar’ asset that will pay you income for life.

Konstanzer – Berlin, Germany

By Germany, Properties

EUR 396,800 | 4.4%-6.6% R.O.I.

Location: Berlin, Germany

Located in the gorgeous city of Berlin, Konstanzer is just few minutes away from S Bahn and U Bahn Stations, as well as numerous universities and office spaces (German Central Bank, Deutsche Bank and Kranzler Eck).

Property For Pension

Property is an excellent investment for retirement. Providing income for life.

Investor Safeguards

Including a builder’s warranty on all new build property, plus ‘step over’ insurance. You are protected.

Flexible Payment Plans

Purchase property without the need for a large deposit – build this up on a monthly basis.

Tenancy Assurances

Our properties are in areas of high demand with high rental yield. This should not make tenancy a problem.

Capital Appreciation

In the long term, property prices always rise. With some areas of the UK forecasted to grow by 30-40% in the next five years.

No Large Sum Deposits

Our payment plans generally only ask for a small sum at outset, and then 24 installments to reach the final balance.

Join hundreds of investors in receiving regular returns, knowing that your money is safe in a ‘bricks and mortar’ asset that will pay you income for life.

H1 Halifax

By Halifax, Properties

GBP 66,995 | 8.06% R.O.I.

Location: Halifax

Located in the popular West Parade Area of Halifax, H1 is just a 12 minute walk away from the Halifax town centre where you can enjoy a variety of amenities.

Property For Pension

Property is an excellent investment for retirement. Providing income for life.

Investor Safeguards

Including a builder’s warranty on all new build property, plus ‘step over’ insurance. You are protected.

Flexible Payment Plans

Purchase property without the need for a large deposit – build this up on a monthly basis.

Tenancy Assurances

Our properties are in areas of high demand with high rental yield. This should not make tenancy a problem.

Capital Appreciation

In the long term, property prices always rise. With some areas of the UK forecasted to grow by 30-40% in the next five years.

No Large Sum Deposits

Our payment plans generally only ask for a small sum at outset, and then 24 installments to reach the final balance.

Join hundreds of investors in receiving regular returns, knowing that your money is safe in a ‘bricks and mortar’ asset that will pay you income for life.

Park View

By Birmingham, Digbeth, Properties, Sold Out

GBP 139,995 | 6.43% R.O.I.

Location: Digbeth

The modern contemporary apartments of Parkview are located in in a part of Birmingham that will profit highly from the ongoing regeneration and HS2 expansion.

Property For Pension

Property is an excellent investment for retirement. Providing income for life.

Investor Safeguards

Including a builder’s warranty on all new build property, plus ‘step over’ insurance. You are protected.

Flexible Payment Plans

Purchase property without the need for a large deposit – build this up on a monthly basis.

Tenancy Assurances

Our properties are in areas of high demand with high rental yield. This should not make tenancy a problem.

Capital Appreciation

In the long term, property prices always rise. With some areas of the UK forecasted to grow by 30-40% in the next five years.

No Large Sum Deposits

Our payment plans generally only ask for a small sum at outset, and then 24 installments to reach the final balance.

Join hundreds of investors in receiving regular returns, knowing that your money is safe in a ‘bricks and mortar’ asset that will pay you income for life.

Home

By Uncategorized

Property Investing. For Everyone.

All things property related, from “buy to let” to residential property search and selection, alternative property concepts, mortgage sourcing to turnkey property ownership. APW’s expertise provides assistance to clients globally.
What safeguards do investors have when buying UK property?
The UK property market is one of the oldest and most robust in the world. It is backed by quality regulations which govern all aspects of it, meaning that investment in it is secure and guaranteed by the rule of law.

Downlad our E-Book

Property Hotspots: identifying where to buy
While it is customary to look at the UK as a whole and to consider the national average house price, different regions have different house prices, and hotspots arise around the country.

Tax payable by non-resident landlords
Investors need to be aware of the tax implications of property ownership.

Capital Growth
Capital Growth refers to the increase in the value of the asset over time. Frequent national surveys show the average value of house prices, and the rise or fall of these are of great interest to investors.

Guaranteed Tenancy (No Void insurance)
Having taken control of the unit, the first thought on your mind will be to have it tenanted as soon as possible. The bank will be looking for repayment, and you will naturally look to your tenants to pay their rent.

The team at APW are very hands on. I bought my second investment property through them, they manage the whole process, so I just leave them too it.

Angus EvansSingapore

The Birmingham property I Purchased two years ago, achieved 46% capital appreciation by the time the build had complete. One of the best financial decision I have ever made.

Tomos PowellUnited Kingdom

I was introduced to APW by a friend who bought a property through them. I am 57 an thought that it would be tough to add property income before age 65. The guys showed me how I could purchase mortgage free, and fully own the property by 64. Giving me a planned income of GBP10k per annum in 7 years.

Andrew DMuscat

Bought an off plan property a year ago and struggled to get a mortgage. APW managed to get me a competitive rate, and arrange the mortgage on the remaining 65% owing. Thanks.

Adel EBahrain

A French farmhouse restoration in Bordeaux had always been high on my bucket list. Thanks for helping me source this.

Greg MMalaysia

Properties

High yield, cash flow positive properties with a focus on debt clearing.
Learn More

Retail Bonds

Are you looking for unique investment opportunities paying 6-10% per annum, fixed?
Learn More

Properties

Blog

Join hundreds of other investors receiving the regular returns from property, knowing that your money is safe, in a “bricks and mortar” asset.

Buy to Sell

By Blo The luckiest generation: who really had it best when buying property?g

What is a Buy-to-Sell Investment Strategy and why does it matter?

We’ve looked before at the importance of an investment strategy, and covered the most popular buy-to-let strategy in some detail, here.

As we’ve said before, a strategy is essential. And there are only two real strategies that, as an investor, you’ll need to use. 

Two fundamental strategies

Either: an investor buys a property and rents it out to create a future income stream

Or: an investor buys a property (possibly off-plan) and aims to sell it at a future date to make a profit off the back of rising house prices.

In this article we’ll consider the second of these: the buy-to-sell strategy.

Buy-to-Sell Investment Strategy

Buying a property to sell is completely different to buy-to-let, aimed more at short-term or mid-term strategies. There’s no worrying about rental income or tenants, you’re just simply looking to sell for as much profit as possible.

The main attraction of buy-to-sell is the amount of money that can be made quickly. You can buy and sell in a matter of months rather than the long-term timeframe that comes with a buy-to-let strategy.

This is also the downside. This type of investment only makes money when you’re working. There’s no passive income, just the money you make on the sale.

The most important things to keep in mind when looking at buy-to-sell are location and budget. You need to ensure that you buy at the right price and keep any refurbishments or maintenance within your budget. Secondly, you need to market your property quickly and effectively. Having a good location for this process is ideal and will help the sale immeasurably.

Choosing buy-to-sell for your investment strategy depends entirely upon your goals. If you’re looking for something short-term and want to generate a lump, it’s perfect. If you’re in for the long-haul, want to build a portfolio or you’re looking for passive income, it’s not for you.

Pros:

A quick process that’s well suited to short-term goals
No tenants or maintenance to deal with
Less dependent on the long-term health of the property market

Cons:

No passive income for the future
Complex management and hands-on work
Can result in a loss if done incorrectly

What about buying off-plan property?

This strategy is not strictly Buy-to-Let or Buy-to-Sell (both are viable), it’s simply a different method of initial purchase. Off-Plan Properties are new-build developments that are not ready for tenants, instead bought by investors before completion.

By buying off-plan properties you can often find excellent individual discounts. Additionally, off-plan properties are often seen as good investments because of the capital growth they can experience between planning and completion.

As an investor, you would buy a property unfinished, wait for completion, research the market and decide whether to rent or sell. This offers flexibility in strategy, although it requires a lot of management and due diligence.

As always, growth isn’t guaranteed. Investing in off-plan property is entirely dependent on the market, particularly if you’re hoping for capital growth during the build period. Be sure to research the area and the market conditions before diving in.

Pros:

Discount on initial purchase

Potential for capital growth during the build period

Flexibility in strategy

Cons:

Advanced strategy that requires management and due diligence

Cash often necessary for deposit

Whatever strategy you choose, it’s vital to ensure that you do your research, ask advice wherever necessary and keep on top of your goals. If you have a solid investment plan, you’re better equipped to make sound decisions and have a better chance of finding success. As ever, don’t hesitate to reach out to the APW team for further discussion.

For current APW buy-to-sell options, click here

 

How to retire with purpose

By Blo The luckiest generation: who really had it best when buying property?g

A prosperous retirement is a goal that looms in all our minds, and it’s our mission statement to help our clients achieve exactly that. A prosperous retirement is characterised by reliable income streams, healthcare and a lifestyle that allows you to focus on what matters.

But, at the same time, retirement is about more than just money and an investment portfolio.

Money is really a facilitator for something more important: a life that has purpose and is personally satisfying.

So what makes a prosperous retirement worthwhile?

Here are some ideas that others have found to be helpful in finding meaning.

Find your cause

The best expression of a career these days is no longer linear: working in the same line, progressing down a track, reaching an end-point and retiring. In fact, many people now see a life’s work as a logical and coherent collection of projects which support a belief about the world. And this belief about the world is linked to each individual’s unique abilities and talents.

Author Pamela Sim, in her book ‘Body of Work’, describes our careers a life-long work-in-progress. And underpinning that is the idea of a personal mission statement – an expression of what unique abilities an individual has and how they can use them. Invariably, this is the application of personal talents to real-world problems, with the objective of bringing about change.

An excellent way, therefore, to engage with the idea of the personal mission statement is to find a cause to be a part of. Causes range from everything conceivable and conventional: whether it be in the local community or in faraway places.

One individual who has done exactly this in retirement is Bill Morse, who retired in California and resolved to spend his time working in service of a cause he believes important: clearing landmines from agricultural land in Cambodia. Bill and his wife, both securely retired, now work in the most dynamic of ways full for the Landmine Relief Fund near Siem Reap.

Impart your knowledge

Having a lifetime of experience, both professional and personal, means a lot and can really make an impact on those around you.

One wonderful way of putting this into immediate practice is to offer to work with students in a school setting as a classroom assistant. This could be paid or unpaid: if you have a sturdy portfolio, it won’t much matter.

While working with children is not everyone’s thing, there are other ways of imparting knowledge and creating impact. Working as a docent or guide in a museum or gallery can be an extremely interesting way of spending time – especially for those with an interest in the arts. It is usually not remunerated, as galleries and museums see themselves as serving a public good rather than a commercial goal, so it is thought of as unrestricted gift of time on the part of volunteer.

Create, share, sell

One of the most satisfying activities for all of us involves creativity. The act of creation is gives a sense of purpose like few other pursuits. There is a direct link between creativity and overall well-being.

For some people, up-scaling a craft or hobby is a satisfying lifestyle – and, let’s face it, when we work we are usually too exhausted to do anything like this.

But in retirement, you can take it one step further by selling their output via small marketplace websites such as Etsy, or eBay, or promoting it with digital platforms such as Pinterest.

Happiness

The key to happiness in retirement lies in taking action, to capitalising on personal strengths and beliefs, and making an impact. Of course, the blank pages of possibility that characterise a prosperous retirement are really only possible with a solid and well-structured investment portfolio – so it is absolutely essential to plan accordingly.

To make a success of property investment, start by learning all you need to know in our  Investor Education portal.

Stamp Duty and Tax: what expat investors need to know

By Blo The luckiest generation: who really had it best when buying property?g

Buying a property is a daunting and sometimes confusing area, and an issue that is right at the top of the expat buyer’s mind is the question of tax implications. In this article we’re going to review the implications of both tax and stamp duty and how these affect the purchase.

Tax implications

 Essentially, the implications of tax are quite straightforward. Each person in the UK has a personal allowance of £11,500 per year for their income before they have to pay tax to the Inland Revenue. Since mortgage costs can be deducted, this means that you would need to be the landlord of a number of properties before you reach this threshold.

What’s more, this tax allowance rises every year ­- the average rise is £300, which is above the rate of inflation, so you won’t find it encroaches on you over the years. In fact, your annual tax free allowance will increase.

There are ways to mitigate this – married couples or civil partners are able to combine their tax allowances to make a total of £23,000 per year. Non-resident landlords can apply to join the NLRS (non-resident landlord scheme), which ensures that tax is not withheld at source.

For expatriate investors, tax should be declared on the tax return if necessary and returned.

While this is the legal situation with the British tax authorities, naturally your country of residence may also apply its own tax requirements, so that needs to be verified with a tax professional in that country. Some countries, such as Switzerland for example, tax individuals on their worldwide income.

SDLT – Stamp duty land tax

 When you purchase your property, there may be a stamp duty tax to pay. This is a one off payment that varies according to a few factors: the cost of the purchase and whether it’s a first home or a second home.

For first time buyers, the following charges apply:

First £125k is tax free.

£125-250k purchase price is taxed at 2%

£250-925k purchase price is taxed at 5%

For second home owners (or above), which applies to many of our clients, the following charges apply:

£0-125k is taxed at 3%

£125-250k at 5%

£250-925k at 8

Here’s a handy calculator to help you identify exactly the amount you’ll have to pay.

So is it better to own lots of little properties? Or one larger?

Investors sometimes wonder if it is more tax efficient to buy larger properties or smaller ones. Here’s a scenario:

If you buy one large property at £550,000, Stamp Duty is at 8% which results in a bill of £44,000. At a yield of 4% this gives income of GBP22,000 per annum.

If you buy five smaller properties at £100,000, Stamp Duty is at 3%, resulting in a bill of GBP15,000. At a yield of 7% this gives income of £35,000.

Purchasing the five smaller properties therefore reduces your Stamp Duty bill by £29,000 and increases your income by £13,000.

Own as individual or company?

This is one solution that investors sometimes consider – buying through a shell company. While this is totally legal, the effect on your tax burden depends on the situation.

Factors which affect this are the number of properties you acquire, whether you are leveraging on existing properties and your current tax bracket.

An additional point would be the question of domicile: buying via a company would maintain you at ‘arm’s length’ from the UK, and you would potentially avoid domicility issues. This article outlines the pros and cons, and when you should consider ownership via a company.

Still a worthwhile investment

Fortunately, tax matters in the UK are genuinely transparent and easy to understand. In fact, the country’s premium property market is built on solid foundations of good governance, attractive tax demands and transparency, meaning investors have little to worry about in this regard.

Discover property investment opportunities around the UK and elsewhere and our unique payment plans

Real Life People: An Investor Case Study

By Blo The luckiest generation: who really had it best when buying property?g

In our work with expat investors around the world, we encounter many individual situations where property investment works. There is a good number of working professionals using property investment as a tool for future prosperity, and this is particularly valuable in a situation where you fall outside of national pension schemes.

Property makes a great – and affordable – way to build up a source of income for retirement. There is a certain snobbery or cachet about it, but property investment does not have to involve large mansions in glamourous locations. Neither does it have to involve enormous disposable incomes.

Take the following as an example.

Client A and his wife are based in Hong Kong, where they work at an international school. Aged 34 and 37 and from the UK, client A has a 3 year old daughter, and as a family they can save £1,500 per month.

They would like to purchase a property as a “education fund”, but don’t think they have a large enough deposit.

Our work for Client A

Our work is essentially very straightforward. We research the market, according to parameters that have been laid out by discussions had with our clients, and on this occasion we found a new build development in Nottingham that had two bedroom apartments for GBP114,995, giving rental yield at 6%, or GBP7000, alongside a ten year builder’s warranty.

Unlike a traditional property purchase, client A did not have to pay 30% upfront, but they were able to save on a monthly basis, over 24 months. This left them with 24 monthly payments of £1,437, within their budget, with the remaining 70% being covered by a mortgage sourced by us.

The management of the apartment is done by an agency arranged at outset, by ourselves. The agency found the tenants, did credit checks, character references, and collects the rent. This ensures the property is cash flow positive, and the income covers all cost, including the mortgage each month.

The end result

 After two years of saving within their budget, client A had a property that is fully owned, and being paid for by the tenant. At ages 49 and 52, in 15 years time, it will be mortgage free giving a rental yield of GBP9,000 per annum. Their daughter is now 18, and they will be able to use the annual income to pay her education fees.

 Payment Plans

Our payment plans are designed to make investment doable for expats with realistic disposable incomes. Here’s how it works:

  • No need for a deposit – fund the property in small monthly payments over 24 months, to give 30%.
  • The remaining 70% is paid for by the tenant, and covered by the arranged mortage.
  • A Rental gurantee ensures mortgage payments are always covered – its cash flow positive.
  • Tenanting, management, upkeep and rental all looked after by selected management companies. We know you don’t have the time to do it when living overseas, so we do it for you.

 The development: Kingsmill – Nottingham;

The Area: From young professionals and students, to families and frequent business travellers, Nottingham has a lot to offer its prosperous rental sector. A charming appeal combined with excellent accessability to the M1 motorway makes it an increasingly popular choice for those wishing to avoid the higher rental costs of its three neighbouring cities.

 The Prospects:

The region is home to some wonderful countryside and expansive green areas. The famous Sherwood Forest is situated 6 miles from the development and the Peak District just 20 miles away.

“Nottingham’s property market is booming at the moment and to be ranked so highly for property price growth is proof of this.” Nottingham Post

“The city is not just within the top three British cities and top five European cities but also within the top 30 global cities – really putting Nottingham on the map as a location to invest and live.” Business Insider

Nottingham recorded annual growth of 10.7% last year, with only London and Bristol beating it in the UK.

 The Development:

The development was a stylish collection of brand new homes, incorporating one and two bed apartments, and two and three bedroom houses.

Financials:

Here, two bed units, start at GBP114,995. You can then fund the 30% deposit over 24 months. That’s 24 payments of GBP1,437 per month. The remaining 70% is covered by way of an arranged mortgage.

This approach is one of ‘fire and forget’. The guranteed rental income covers the mortgage payments. This means you can sit back and watch the tenant pay it off.

Key Facts:

  • Yields of 6% or GBP6,900 per annum. Guaranteed on a year to year basis.
  • They are sold at a 15% discount versus local comparisons.
  • Individual taiored payment plan.
  • Guaranteed rental income for 5 years.
  • Professionally managed by ‘Complete RPI’. It is totally hands off for you.
  • Its central location makes it an excellent choice for commuters to surrounding cities.

Discover property investment opportunities around the UK and elsewhere and our unique payment plans

Processing...
Thank you! Your subscription has been confirmed. You'll hear from us soon.
APW Newsletter
Sign up to get all the latest updates from APW!
ErrorHere