Property as a pension – a case study of a couple stung before

Having the courage and conviction to invest in property again when you have previously invested and found things haven’t gone to plan is a big step.

That is exactly the situation with one Alton Property Partner investor who had previously bought two properties in the North of England with his wife, off plan, and at the height of the market. The subsequent fall in the housing market had left them like many other investors with a property in negative equity, and having to personally subsidise the mortgages each month.    It would have been very easy to say ‘once bitten twice shy’ but my investors understood the benefits that property would bring to their pension portfolio, understanding that property as a pension is the best option. They had money in their bank earning them nothing, so they were determined this time to ‘get it right’.

Understandably they was extremely cautious and working full time, with 2 children it was difficult for them to find the time to carry out the necessary due diligence to ensure they avoided making the same mistakes.  So the guidance and support provided by the Handsfree property investment solution of Alton Property Partners matched their requirements exactly.

Having sat down together we gained a full understanding of their requirements, with their preference on this occasion to purchase a property which would attract private tenants.  Of course cash flow and equity in the property was also of key importance.

As these are the two key focus areas of investment with Alton Property Partners we knew we had a robust solution for them.  We never purchase brand new houses, or off plan, so do not gamble on the marketplace and all the financial calculations are based on ‘today’s market value’. Put simply we assess properties and purchase them based on the facts that are on the table today!

Taking our investors’ requirements into consideration the sourcing team in Nottingham quickly identified a property. A 3 bedroom semi-detached property with a driveway, located in a predominantly private rental area of Nottingham. Ironically, the property was in fact a repossessed new build, having been built at the height of the market in 2007 / 2008, where unfortunately the owner had been unable to hang on in. The price it was bought for in Jan 2008 was £159,995, the purchase price now was 40% lower at only £95,000.

Please find below the full purchase details under which the property was secured for our investor. The 14% below market value (BMV) represents the BMV figure at the time of purchase and after the £2,600 spend on refurbishment.  Therefore this is a true and accurate indication of the equity in the property at the time of purchase.

During the sale process our investors were constantly kept up to date with progress and on Completion of the Sale the refurbishment went into the house. The refurbishment work was completed within a week and the private tenants moved into the property the following weekend.

Purchase price: £95,000
Refurbishment work: £2,638
% Below Market Value (after Refurbishment work complete): 14%
Instant Equity in Property: £15,362
Ongoing Net Return: 7.25%
Cashflow after Mortgage, Letting Agent and Insurance: £229
Cashflow after all costs accounted for*: £159

* Includes allowance for Mortgage, Letting Fees, Insurance, Voids, Maintenance, Safety Testing

If you would like to find out more about property as a pension, and the best way to invest based on today’s figures, give us a call at Alton Property Partners.

Gill Alton

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Gill Alton is the founder of Alton Property Partners, which provides a comprehensive and personal Property Portfolio Building Service for investors in the UK.

Alton Property Partners manage the entire investment process, from sourcing property at a discounted value, co-ordinating the Mortgage, arranging the refurbishment, right through to ensuring it is ready for the rental market.

The service is specifically aimed to support those who recognise the value of a UK investment portfolio, but lack the time, or knowledge to be able to invest for themselves because they are full time employees or Business Owners. With full consultation and comprehensive financial analysis, clients can be assured that their portfolio of strong yielding properties will be built to exacting standards and they will be kept up to date every step of the way.

Having been involved in property for 16 years Gill has built a personal portfolio for her family, and in addition to Alton Property Partners, runs a Property Mentoring Business, Venus Property Mentoring which focuses on supporting new investors onto the investing ladder. Having originally left the Corporate world to be a Qualified Mortgage Broker, Gill’s husband now focuses on their family Mortgage Brokerage in Maidenhead – Alton Mortgages.

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Alton Property Partners
6 Bramble Drive, Maidenhead BerkshireUKSL6 3NX United Kindom 
Gill@altonpropertypartners.co.uk •0845-095-5060

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