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Article > Pension v. HMO Properties? Where would you place the money?

 



Article kindly supplied by Matthew Moody

www.Millenniaproperty.co.uk

www.hmosurvivalguide.com

 


Everyone reading this article is interested in their present and future net worth; that’s why we invest. The reason for choosing property is that we all know, in time it delivers stable solid growth and income. As the saying goes, it’s as “safe as houses”.

The problem for many people though is they do not have enough money set aside or accessible right now, to take advantage of the extraordinary deals available in the market place today. Imagine, just for one moment, if you had £50,000 to £150,000 to invest in property and how much that money could be worth in 10 or 15 years.

For most people their imagination would only allow them the idea of purchasing one property and waiting for the returns to come back to them in a few years before they could reinvest the returns again,

Now imagine this scenario: Take your pot of money and purchase a property and then after the property is purchased, refurbished/converted and let (average 3/4 months) you use a draw down facility that makes all your initial investment available to you and you can make this work again and again. How much greater would that figure be compared to your first thought?

At Millennia Property we are working with investors every day who are doing just this. Using the excellent opportunities available in the market today we help our investors purchase property using commercial finance to re-cycle a finite initial investment.

 

HMO Survival Guide

If you're serious about your property business in 2011, you will get this report, right now and read the report today.

Imagine, month after month, having dozens of £400 deposits in your bank account,with almost no chasing the rent and little tenant support—ever. What an easy way to earn a living that would be! You can have that life. I'll show you how.

  • Why HMO's Are The Perfect Property Investment
  • HMO's Are Not Problem Free
  • Why HMO's Are More Than Just a HMO
  • The HMO Survival Guide
  • Managing Your HMO Effectively
  • Make Money With This Report

Ask yourself the following:

Do you think a portfolio of good quality, high yielding HMO properties would out perform your pension fund over the next 10/15 years? Do you want to invest in high yielding property?

If the answer is yes, please read on. Many people are been surprised to discover how small the amount of money is in their pension plans and even more shocked to find for some of them that the fund loses money some years. The biggest shock comes when they look to

At Millennia Property we are used to helping investors with their long term retirement planning goals. Most people who are 30-50 years old know that their pension scheme will most probably not keep them in the desired style they have been accustomed to after they retire. Hence why people look for other plans for the future such as investing in property.

The Sunday Times recently reported that 80% of the Baby Boomer generation will fall far short of being able to provide for their needs through life-long retirement if they stay with their current pension plans. Through property investment, people look to help bridge that gap to enable them to enjoy their retirement rather than existing through it.

A solution for some people would be a strategy of purchasing single let properties and turning them into high yielding cash flowing HMO’s. This would not only give the investor the cash flow that they will require when they retire but also should give them equity that they can release in the future from the capital growth to reinvest in property or any other excellent investments that may be available at the time.

One of the many benefits about investing in HMO’s is the investor is safe in the knowledge the returns will look after them in their retirement and then will also look after their family and loved ones long after they have passed away.

At Millennia Property Investments (MPI) we introduce many investors to the concept of using commercial finance for HMO investment at our offices or our seminar days and introduce them to people who have successfully done just this. We are offering readers of MPPT the opportunity to learn how to do the same. Just to be clear though, we do not and cannot offer pension, investment or financial advice: we simply put you in touch with people who have done this for themselves, so that you can take your own advice and decisions.


The following is an example of how we at Millennia can make your money work for you and then re use it. The investment is for a 3 bed terrace house and requires £51,670 from the investor to make it work but once works are completed and the draw down facility is used they will get all their monies back and can re use for the next project.

Property Address: Property #2
Investor: J. A. Smith
Purchase Price:£115,000
Cost of Works £15,000
Letting Rooms 5
Gross Annual Rent £24,000
Net Annual Rent 85% x Gross £20,400
Expected Commercial Value £255,000
60% LTV - Max Drawdown £153,000

Bridge Calculations:
Loan Term months 4
Gross Loan £92,000
Arrangement Fee £1,840
Exit Fee £1,380
Total Monthly Interest £5,520
Total Costs (Deduct from Gross Loan) £8,740
Net Advance (Funds we lend Investor) £83,260

Other Costs:
Bridge Legals/Commitment Fee £1,500
Commercial Broker Application Fee £1,530
Valuation fees - Commercial £1,900
Total £4,930

Summary:
Total Clients Cash Required £51,670
Max Draw Down Expected from Lender £153,000
Repay Bridge -£92,000
Repay Clients Cash Invested -£51,670
Net Position (Cash back or Cash left in) £9,330
Also the beauty of this type of investing is that it leaves your cash fluid once the project is finished and does not leave your money tied up for years so you can keep reinvesting


If you would like to talk to someone regarding this exciting investment strategy for retirement planning or help with any property investment strategy then please call Kenny Ranns on 01604 521301 or email kranns@millenniaproperty.co.uk

 

HMO Survival Guide

If you're serious about your property business in 2011, you will get this report, right now and read the report today.

Imagine, month after month, having dozens of £400 deposits in your bank account,with almost no chasing the rent and little tenant support—ever. What an easy way to earn a living that would be! You can have that life. I'll show you how.

  • Why HMO's Are The Perfect Property Investment
  • HMO's Are Not Problem Free
  • Why HMO's Are More Than Just a HMO
  • The HMO Survival Guide
  • Managing Your HMO Effectively
  • Make Money With This Report

 

 

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Matthew Moody

About The Author:

Matthew Moody is one of the UK’s top HMO experts and the founder of www.yourhmoexpert.com a website dedicated to providing property investors with free information about investing in high quality professional HMO’s.
He runs regular workshops and speaks at events around the country.
He also runs a HMO management agency with offices in Northampton, Leeds, Lincoln, Hemel Hempstead and Colchester together with a property sourcing and education business, and a furniture package supplier.
For more details, please contact Matthew on 01933 460270/01604 521301 or info@yourhmoexpert.com

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