Oak Harbor Real Estate

Oak Harbor

Use this site to explore Island County communities and find the neighborhood that fits your likes and priorities. This site has extensive community information, consumer links, school information, free reports, real estate answers, and more. Here you will also find useful information on how to go about selecting a home, making an offer, negotiating, financing, moving, and all the steps in between. Continue reading “Oak Harbor Real Estate”

Property valuation: student accommodation a special case

There are types of property which are run on the commercial model (such as student accommodation) which ARE worked out on a net yield because they can incur some additional running expenses. Let’s look at how the commercial property model works, using student accommodation as an example. Currently, BMB Real Estate is offering a bespoke, off-plan student development to our investors. Being off-plan and therefore considered a ‘higher risk’ than an already-performing property asset, the yield is high and the purchase price is low.

Off-plan purchase price: £85,000
Gross rental income: £9,435 (an 11.1% gross yield)
Net rental income (after management fee and sinking fund): £7,685 (a 9% net yield)
We can see how this investment brings in a good, passive income from your performing property asset, but what are your exit strategies and how do you add value through capital growth?

This is the clever part!
Let’s say the development is up and running as a performing property asset, rather than being off-plan as you bought it. The risk is now lower, so your secondary market (presumably another investor who wishes to purchase the unit)will not expect a 9% net yield as you did when purchasing off-plan. Rather, the desirable net yield for a secondary market will be a healthy 6% – 6.5%, but as the rental income stays the same, this means the value gets pushed up!

So, the net rental income is still £7,685. In order to get the new value, we divide this by the 6.5% = £118,230. Your commercial property has increased in value by £33,230 (39%) just on the secondary market resale. Additionally, because this is a commercial investment with funds from each room ‘pooled’ and then divided between all investors, you don’t even need to worry about your individual room being let!

For commercial property, you might argue about the yield that is being used for the calculation, but it’s a starting point. For most investment property the yields are widely agreed. As you might expect there are some regional variations and other variations based on size, age, condition and so on. If you perform your own due diligence you will note there are benchmark expectations of commercial performance.

But the bottom line is that commercial property is valued on the basis of a realistic future income stream, whereas residential property is valued on the basis of what the marketplace will pay. A very different approach!
It’s precisely this model which is on offer at our London Student Accommodation in Greenwich and which underlines the attractiveness of it.

Buying Unfinished Homes

Unfinished homes present a great way to save a lot of money and get yourself a new home in the process.  If you buy an unfinished home, you can keep your monthly mortgage payment low and also lower your initial investment.  You may also be able to buy a larger foundation size as well, which you can easily add on to and save money in the process. Continue reading “Buying Unfinished Homes”

Common Risks Faced by Property Flippers

Property Flippers

The first thing that should be noted is that flipping houses is a great way to bring home a rather large profit in a relatively short amount of time when doing so in a seller’s market so to speak. The problem is that we currently seem to be experiencing what is known as a buyer’s market from one end of the United States to another. Foreclosures are at an all time high, which means that the market has suddenly been saturated with properties for sale. Continue reading “Common Risks Faced by Property Flippers”

Buying property in Hanoi

Buying property in Hanoi

The estimated capital injection into the Vietnamese property market reached US$5bn, mainly foreign direct investment (FDI). The British Virgin Islands for example invested almost $2.7 billion in Vietnam, while Singapore pledged $2.2 billion. The increasing interest in the city meant property prices in Hanoi tripled. New apartments in Hanoi were being snapped up for $80,000 but by the summer this rocketed to $240,000. Continue reading “Buying property in Hanoi”

Government Encouragement Sought For Landlord Entrepreneurs

The Association of Residential Landlords (ARLA) says the forthcoming budget is an “open goal” for the Chancellor to encourage investment in the UK’s private rented sector (PRS) and support growth in the economy. In ARLA’s budget submission, the body has urged the government to support this growth by removing prohibitive barriers to further investment. This article shows how the government and other bodies recognise and support the private rented sector; and how the continuing growth and high demand underpins investor security in the PRS market.

Tax system can be used to incentivise PRS investment

Continue reading “Government Encouragement Sought For Landlord Entrepreneurs”