FAQ2021-04-30T08:43:58+01:00

What You Need to Know About Buying Brand New apartments or homes ‘Off – Plan’!

Some companies often ask for a large deposit of 40%, 60% and even 80%, what is your view and is that necessary?2021-04-16T11:03:58+01:00

This is totally unnecessary and leaving the risk with the buyer and that is simply not good enough. A strong and successful developer will have funding and that is why a deposit of 20-25% should suffice and be accompanied with a letter prior to your deposit being handed over. Again, a big subject covered well within the podcasts.

What should I be looking out for before I consider buying off plan?2021-04-16T11:03:58+01:00

The most important thing you need do is thorough due diligence!
Find out all you can about not only the developer, but also the location, ask yourself questions that ensure you keep to your priority list – is the development close to transport, shops, schools, near water for lifestyle? Also, check out the ‘real rental return’ (listen to podcast 2 for more on this).

Research the demographic moving into the area (who will rent my property or who will be my neighbour). Understand the after sales care – what has the developer completed and how well run are the buildings completed?

Then there are the other big questions:

  1. What has the developer built previously, did they build on time and deliver all they said they would?
  2. Is the developer fully funded?
  3. What is the deposit requirement? 20% is the normal – any more than 25% should be questioned.
  4. Has the developer got their new build 10-year structural warranties in place – ask for a copy.
How do I make money on my investment?2021-04-16T11:03:58+01:00

This is one for the podcast as it is somewhat detailed. In essence, it’s about ensuring you borrow within your limits, you establish loans that suit the plan you adopt. For example perhaps an interest only loan fixed for several years to give you time to acquire the next deposit for your next purchase and balancing the net return you get against the capital gain and having both work for you is appropriate.

So, would you say ‘buying off plan’ is the new normal? Are many people buying property before they are constructed?2021-04-16T11:03:58+01:00

Most certainly. At a time when safe secure investments are flavour of the year, demand is high and far outstrips supply. In fact, to give you some idea of supply vs demand: Liverpool NW England requires 25,000 to 30,000 homes built over the next 15 years – that’s a tall order to fill! The gap could not be filled if we stop construction and as a consequence of under-supply, property prices would soar. Therefore, buying off plan is very much the new normal!

What are the benefits of buying off plan?2021-04-16T11:03:58+01:00

To name a few benefits includes: your choice of location, your choice of buying an apartment within the development you best prefer, brand new products, furnishing and all with new goods warranties, minimal costs to maintain post completion and full 10 year new-build structural warranties.

The important factor to bear in mind when doing this type of purchase, is that the investor does their due diligence on the developer, and the area before buying. We hope the podcasts we create give the guidance, and the confidence to understand what that DD entails.

What exactly is buying off plan?2021-04-16T11:03:58+01:00

It is buying a property or home off the architectural plans prior to the construction of the apartment or home.

Your real rate of return and why after sales care is so important to understand before you buy!

Please explain the reason people can feel excited about investing in residential real estate. A lot of people feel it burdensome and costly, can you shed some light on this for the listeners? You have had so much passion for the industry for so long.2021-04-23T07:13:36+01:00

It is a stigma attached to purchasing property for many. It doesn’t have to cost once you have saved the deposit (the hardest part). In a way, that stigma creates a fear of making a plan and following that plan… a simple plan that can guarantee wealth creation. And who doesn’t want security for themselves and their families?

Buying residential real estate is one of the most exciting entrepreneurial businesses you can undertake if you know what to ask, where to buy, what to pay and how to protect your funds. Listen to the podcasts and find out more. Nothing builds wealth and security in general terms than the safe, secure and conservative return acquired on bricks and mortar.

What are your honest insights into investing in residential property in this current climate? And what is the ‘real rate of return’ I can expect?2021-04-23T07:14:19+01:00

Again, a big subject so please refer to the podcast for a more in-depth response. However, in short, there has not been a better time than now. Post Covid, enthusiasm, demand is greater than supply, a rising market and low interest rates. This demand does not look like it will slow anytime soon. So choose wisely, do your DD and invest if you have sufficient deposit to invest now.

The real rate of return is the return you get on the amount you put into the purchase. For example, if you purchase a 1-bedroom apartment for say £150,000, pay a £30,000 deposit and mortgage £120,000, we will show you ways to let the mortgage on a buy to rent pay all your costs and still leave money in your pocket. So, the real rate of return is the net return you get on what you put into the investment. Return on what it actually costs you! In this case £30,000. When listening to the podcast you will hear how £30,000 invested will return you around £3,090 net after mortgage and all costs are paid. That would show a REAL RATE OF RETURN OF JUST OVER 10%.

So, who would you say is looking to invest in the North West? Is it the local market, is it outside the local market, or is it people from overseas?2021-04-23T07:14:19+01:00

With the worlds volatility as we have experienced over the past year or so, we have observed positive investments from a variety of demographics from people seeking life style changes to securing lucrative pension plans, but I’d say the three primary sources outside the local demographic are:

  1. Londoner’s divesting funds from a low rate to a higher rate in the North West.
  2. An ageing population building secure pension or retirement plans through greater returns residential income offers on buy to rent.
  3. An international market that regards the UK as a safe, secure and regulated economy unlike many other economies throughout the world.
What sort of ‘net return’ can I expect on the purchase of a brand-new apartment?2021-04-23T07:14:19+01:00

As this is a more detailed question, please head over and listen to my podcast which answers this in more depth. However, in brief, in the NW of England you could typically expect a return of between 5.5 to 6% within 3 kilometres (just under 2 miles) to the city centre, or 4.5% in the city centre and by the waters edge.

What is considered to be a fair and reasonable ‘block management service fee’ prior to purchasing a brand-new residential property?2021-04-23T07:14:19+01:00

Prior to purchasing, make sure you find out what the service fee budget will be and what will that service include. Generally, in NW England the service fee budget should be between £2.65 and £3.00 per square foot, so converting that to a new build would equate to £1200 for a 1-bedroom apartment, £1800 for a 2-bedroom apartment and £2,250 for a 3-bedroom apartment.

How important is it to ask about ‘after-sales-care’ prior to my purchase?2021-04-23T07:14:19+01:00

I think it is one of the most important questions you can ask.

Understanding how your asset will be maintained after you complete will determine many things, such as: the ease of rental, how enjoyable it will be to live within the community of the building, what rental return you will get as compared to other buildings within close proximity. In fact, I believe this question tells you more about the developer and how you can protect your asset and funds than any other question. So, find out all you can by asking questions like; who is managing my property? What have they built and how are those buildings being run? What fees will I be paying and what service are included?

Secret Savings – Wealth creation; It’s time to build a truly remarkable 2nd business for you.

Why do you say ‘time’ works for investors – why is time a friend?2021-04-30T08:51:20+01:00

In England, properties double every 8 to 10 years which means the residential investment should increase in value 10% every year – bear in mind however, some years it may seem to fall or even do so, then at a particular point you will see a significant increase in property prices. All in all, averaged out of 10 years, a residential property will double in value, as it has done for the past 220 years on average.

How does capital gain work best?2021-04-30T08:50:50+01:00

Time! Time and high quality after care service – so make sure you know what you are buying, where you are buying and who from, and let time and your clever planning, build your wealth!!

What is secret savings?2021-04-30T08:50:14+01:00

It is the true potency of capital gain and knowing how it will work for you, an essential mind set you need, in order to grip the importance of buying, acquiring and holding residential real estate.

What sort of deposit do I need?2021-04-30T08:47:40+01:00

As we have always said, a deposit in the 20% to 25% maximum bracket is sufficient because it is up to the developer to borrow the money, take any risks and deliver what they promise – not up to you! But do your due diligence and ensure the developer is funded before you release any deposit.

What type of loan should I go for?2021-04-30T08:46:17+01:00

When building a property portfolio, I would suggest researching into interest only loans so that you don’t have the worry about principal payments. Those principal payments you aren’t paying can then be saved for your next property portfolio purchase and so on. It is important, that when you endeavour to build a property portfolio that you demonstrate to your bank, you are a steady and strong saver as bank funding is vital – this will allow you to borrow more over time and have secret savings snowball and work harder for you.

What is the real rate of return2021-04-30T08:43:45+01:00

How do I start? It is important that you do your due diligence before you buy – find out about the developer, look into what after the sales care they are offering, how are the developers funded and of course what percentage of deposit do they expect? These are not hard things to find out and of course do your due diligence on the location and the demographic to ensure you will attract the right tenant to your property and achieve the highest rental return. Please refer to podcast 2 for more in-depth information on this.

All these questions and more have been answered in our podcast. Interested? see below:

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