Property Investment Strategy with plans for immigration

by Readers Question

7:56 AM, 19th August 2014
About 4 years ago

Property Investment Strategy with plans for immigration

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Property Investment Strategy with plans for immigration

I recently came across Property 118. Kudos to Mark et al. for creating an amazing resource and community for like mind people!

I am what you would consider a newbie in the property investment scene. I am freelance IT consultant living in the UK for the last 15 years. I was lucky enough in 2001 to purchase a 2 bedroom flat in central London that has since increased in value 4-5 times. I am mortgage free and also have personal savings I am able to invest. All in all, a good position to be in I think.

My partner and I intend on immigrating back home to Australia in the 6-7 years time and would like to have sufficient funds to be able to buy a reasonable property back home when we get there close to our families. Would it be possible to establish a property portfolio in the next few years that would allow me to do this?

The other point to note is that properties back home aren’t cheap. They have increased dramatically in the last decade. A 3-4 bedroom house with a yard in the eastern suburbs where our families live could cost £1m+. I would want to raise as much of this as possible so that I am able to comfortably service the loan and also have some equity in the property that I can use to eventually extend my portfolio there.

From all the reading so far I understand that property investment is a long term game. If I buy properties at low end end of the property cycle, my assets would appreciate in value when the market recovers. I could then release equity to fund a deposit for a property back come. Well that’s the theory anyway but I’m sure there are other ways.

My concern though is we have already past this point and are now at a point in the cycle where property prices are on the rise again. Am I being unrealistic? Is there any way I can still achieve my goal in 6-7 years or should I just continue as we are until we move back home and start there?

Your views are greatly appreciated. Property Investment Strategy with plans for immigration

Warm regards.

Peter



Comments

Mark Alexander

8:04 AM, 19th August 2014
About 4 years ago

Hi Peter

6 - 7 years in property is relatively short term.

You would be gearing up speculatively in the hope of making a quick buck.

If you need £1m+ cash in 6 - 7 years time then selling up at that point seems like a must from what you have said.

I don't believe in the power of crystal balls, hence I wouldn't speculate if I were you. I see property investment as a way to tie up capital over a long term in order to eventually (perhaps 20 years plus) produce positive cashflow on the basis of property values and rents rising but mortgages balances staying the same (interest only) or reducing if they are on a capital repayment basis. In the meantime its a case of making sure the numbers balance and managing tenancies.

You might get lucky with your strategy but you might not. Can you afford to take a hit if property values fall?
.

Peter L

18:54 PM, 19th August 2014
About 4 years ago

Mark,

Many thanks for accepting my post and for the quick reply. I did expect a response along these lines if I'm honest 🙂

Can I afford to take a hit if properties fall? If this means not being able to raise sufficient capital through the sale of one or more properties to pay back the loan(s) then no i can't.

Raising £1m in cash is the best case scenario - however unlikely it may be in such a short period of time. I was considering the possibility of releasing sufficient funds from a property portfolio here in the UK for a deposit on a property in Australia.

If i can make the numbers work, my tenants here could continue to service the mortgage(s) in the UK and I would work towards paying the new mortgage in Australia. Depending on the size of the mortgage, we have a small flat we own outright over there we can sell to put towards it..

Am I being unrealistic?

Peter

Mark Alexander

19:58 PM, 19th August 2014
About 4 years ago

Reply to the comment left by "Peter L" at "19/08/2014 - 18:54":

Hi Peter

Without getting into the nitty gritty of your personal finances and strategy it is difficult to say whether you are being realistic or not. A public forum is not the right place to discuss such matters.

The numbers you are considering are significant and proper consideration is vital. Please consider the following linked page regarding the one to one consultancy services I offer. I would also recommend that you come and meet me for half a day. I am based in Norfolk and would include such a meeting in the inclusive price. Linked page >>> http://www.property118.com/consultancy-mark-alexander/61522/
.

Peter L

22:48 PM, 19th August 2014
About 4 years ago

Reply to the comment left by "Mark Alexander" at "19/08/2014 - 19:58":

Thanks Mark,

Ill be in touch.

Regards
Peter


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