I have a little portfolio of properties in the UK and am in the process of adding to it at the moment. Why am I doing this now? If you have been following my blogs you will know that my analysis of property markets is based on simple economics. Buy at the bottom of the market. I believe that certain areas of the UK market are at the bottom and provide great value which can even be enhanced with some structured negotiation.
There is an undersupply of new build properties at the moment for many reasons. Principally the key is the situation developers have benn faced with.
Because of the uncertainty developers faced last year with falling house prices and less demand, they had put a stop on their supply. Many developers have been waiting to sell their current stock before even thinking about moving on to new projects.In fact quite a few developers have folded and their existing stock will be sold at discount to canny investors. Likewise land banks bought with hefty bank loans will begin to be offloaded in a spate of foreclosures.
There will be a lag time before new developments happen and therefore another oportunity for the experienced investor. However, at present there is very little opportunity in new builds and the clever investor will look to recently built stock that has to be sold below market value and therefore with built in equity for the investor!
Simply put, stock levels are drying up! The pressure is on to get the best deals.
Don't get left behind!
Monday, March 30, 2009
Monday, March 23, 2009
Good News - End to Recession on Horizon?
Another indicator that now is the time to get back into the property market came recently from the head of the Fedaral Reserve Ben Bernanke.
Mr. Bernake is hopeful for US recovery. The head of the US central bank has said he expects America's recession to end this year. "This decline will begin to moderate and we'll begin to see a levelling off," the Federal Reserve chairman told the CBS 60Minutes TV programme. But he said the world had come very close to financial meltdown last year, before governments stepped in. Mr Bernanke warned that the biggest risk to recovery would be a lack of political will to solve problems. The BBC's Sarah Morris says it is unusual for the Federal Reserve chairman to talk to the media in this way - but Mr Bernanke said he decided to go ahead with the CBS interview because this was an extraordinary time.
His comments came after the UK government warned that the upcoming G20 meeting was critical if the world wished to avoid the economic turbulence seen in the 1930s. Mr Bernanke told the US Congress in January he believed that the recession that took hold at the end of 2007 would end this year. He stuck to that view in the interview while suggesting that recent developments may have set confidence back. "We'll see recovery beginning next year," he said but added recovery could be put in jeopardy if "we don't have the political will". He said a government fund of $500bn was stabilising the mortgage market and business lending was picking up.
Now is the time!!!!
Mr. Bernake is hopeful for US recovery. The head of the US central bank has said he expects America's recession to end this year. "This decline will begin to moderate and we'll begin to see a levelling off," the Federal Reserve chairman told the CBS 60Minutes TV programme. But he said the world had come very close to financial meltdown last year, before governments stepped in. Mr Bernanke warned that the biggest risk to recovery would be a lack of political will to solve problems. The BBC's Sarah Morris says it is unusual for the Federal Reserve chairman to talk to the media in this way - but Mr Bernanke said he decided to go ahead with the CBS interview because this was an extraordinary time.
His comments came after the UK government warned that the upcoming G20 meeting was critical if the world wished to avoid the economic turbulence seen in the 1930s. Mr Bernanke told the US Congress in January he believed that the recession that took hold at the end of 2007 would end this year. He stuck to that view in the interview while suggesting that recent developments may have set confidence back. "We'll see recovery beginning next year," he said but added recovery could be put in jeopardy if "we don't have the political will". He said a government fund of $500bn was stabilising the mortgage market and business lending was picking up.
Now is the time!!!!
Sunday, March 22, 2009
Value In USA Foreclosures
My Last post focused on buying below market value(BMV). One way to ensure you are doing this is to actively seek out foreclosures. The market is at the bottom in many areas of the USA at the moment but with experts predicting a turn in the market at back end of 2009, you need to strike while the iron is hot.
In fashionable areas such as the Hamptons in New York, it is now possible to pick up a beach house for less than $300,000. This same property was almost double the price three years ago!
These types of deals will not last for long. The market is definitely picking up and house starts in the USA increased in February by 22% from January. This brought an end to 18 straight months of decline.
If figures rise again for March, my guess is that investors with access to funds will become quite active and you need to be with these if you want to get the best deals. Do not wait for the masses to enter the market as by then it will be too late!
In fashionable areas such as the Hamptons in New York, it is now possible to pick up a beach house for less than $300,000. This same property was almost double the price three years ago!
These types of deals will not last for long. The market is definitely picking up and house starts in the USA increased in February by 22% from January. This brought an end to 18 straight months of decline.
If figures rise again for March, my guess is that investors with access to funds will become quite active and you need to be with these if you want to get the best deals. Do not wait for the masses to enter the market as by then it will be too late!
Tuesday, March 17, 2009
Below Market Value
All experienced Real Estate Investors focus on true Below Market Value (BMV) properties as a way of ensuring equity from day one. Many inexperienced investors think they may be getting properties at below market value, but when these deals are analyzed they may not be as juicy as they initially appear.
The secret to acquiring BMV properties is to do your due diligence - Resarch Research and Research!!!
Much real estate in the USA is currently for sale at Below a Market Value - but- the question you need to ask - is it below what the current market value of a property of equal standing? It does not matter what value an agent or for that matter what a valuer (even a reputable one!) puts on the property. The value of that property can only be measured against a property on the same street , in the same condition which has recently sold.
This information may not always be available and you will have to do some serious investigative work to acquire it!! However, when you have this information, you have control of the situation. There are many ways to get this information, among them Online Valuations and even word of mouth. Some of the best information comes from developing good communications with local agents and other experienced investors. Experienced investors will often be willing to share their ideas and secrets with you if you are prepared to invest some time and energy - Sweat Equity!
Why reinvent the wheel? Go and seek out a mentor!
Happy St. Patrick's Day!!!!!
The secret to acquiring BMV properties is to do your due diligence - Resarch Research and Research!!!
Much real estate in the USA is currently for sale at Below a Market Value - but- the question you need to ask - is it below what the current market value of a property of equal standing? It does not matter what value an agent or for that matter what a valuer (even a reputable one!) puts on the property. The value of that property can only be measured against a property on the same street , in the same condition which has recently sold.
This information may not always be available and you will have to do some serious investigative work to acquire it!! However, when you have this information, you have control of the situation. There are many ways to get this information, among them Online Valuations and even word of mouth. Some of the best information comes from developing good communications with local agents and other experienced investors. Experienced investors will often be willing to share their ideas and secrets with you if you are prepared to invest some time and energy - Sweat Equity!
Why reinvent the wheel? Go and seek out a mentor!
Happy St. Patrick's Day!!!!!
Sunday, March 15, 2009
Buying in Today's Market
Getting back to my previous post on Lag Time, I now need to tell you waht properties you should be aiming to buy in the next 6-9 months.
There is still an oversupply of new properties and off plan properties available in many property markets. My advice is to avoid any schemes where you are being offered these at discounted prices. Do you really believe that they are giving you a realistic discount. Instead, look for distressed sellers in the same area and go for these. You will find that these properties will be available at true Below Market Value Prices.
There is a huge difference between what developers and agents claim to be discount prices and what you can get at Below Market Value. Certainly in markets such as Spain and the UK you can pick up some great properties at prices which are genuinely up to 30%-40% below True market Value.
There is still an oversupply of new properties and off plan properties available in many property markets. My advice is to avoid any schemes where you are being offered these at discounted prices. Do you really believe that they are giving you a realistic discount. Instead, look for distressed sellers in the same area and go for these. You will find that these properties will be available at true Below Market Value Prices.
There is a huge difference between what developers and agents claim to be discount prices and what you can get at Below Market Value. Certainly in markets such as Spain and the UK you can pick up some great properties at prices which are genuinely up to 30%-40% below True market Value.
Saturday, March 14, 2009
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