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The majority of investors who enter the Buy to Let market for the first time do so with the intention of building a substantial property portfolio over the next five years or more but, in reality, only end up purchasing one property.
Why is this?
When you purchase a discounted buy-to-let property you do so on the basis of an expected rental return from your property investment. For mortgage purposes this rental return should at the very least cover your monthly mortgage repayments. However, in many cases the actual achievable rental income is often exagerated by the developer. That's why an independant expert is required to assess the true rental income on any investment property you may be thinking of taking on.
Unfortunately, in cases where the monthly rental income does't meet the developers expectations, investors are left to subsidise the rental income to meet monthly mortgage repayments - a cost many don't consider before purchasing the investment property and a situation that can lead to financial disaster. This is one key reason why some property investors fail to develop a substantial property portfolio.
Is discounted buy-to-let property really a "genuine discount?"
It's true to say that some discounts are manufactured; it's easy for some UK developers to inflate the gross value of their properties to give the impression a good discount is being obtained. For this reason an independant valuation is always vital to ensure a true discount is being offered. Some property companies negotiate huge discount deals with developers securing tens of properties in any one development. This is great for the developer and the property company but bad news for the investor who may have to cover rental voids if they fail to find a tenant soon after completion!
Any property investment isn't complete without curtains and floor coverings. It's obvious really but often overlooked by aspiring property portfolio investors. This is just one example of the simple pitfalls that a good property investment company will help you to avoid, delivering intelligent property investment advice, prior to purchase of any property investment, either in the UK or overseas.
The terms used by many property investment companies are often confusing. Did you know that Buy to Let investment property is also known as No Money Down property, Cheap Property and Discount Property? This in itself can be confusing as 'No Money Down Property' may imply that you don't have to put anything down to secure a property. The term'Cheap Property' or 'Cheap Properties' can be applied to properties with a worth of £500,000, however, it isn't the price that is referred to, but the fact that the property is available as a discount property at a discounted rate. The term can also be used to mean that the property is in fact 'Cheap Property', which is also used for less expensive cheaper discounted investment properties. Confused....? Well its good to remember that whatever you're looking for, if its an investment property that you require, you simply need to know that its a genuine discounted buy- to-let property and forget about the use of terms such as No Money Down, Cheap Properties, or any such terms.
At Balloon, we ensure all our investors are fully briefed in all aspects of the deal to enable them to complete with minimum fuss and costs. We are committed to minimising costs and other time related pressures that can go with property investing.
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