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Real Life People: An Investor Case Study

By October 24, 2017 October 5th, 2018 No Comments

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

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