Category Archives for "Off Plan Property"

Off Plan Property

Using Second Hand Model Analysis to Analyse Off-Plan Projects

The below is quite detailed so forgive me if you are not one for detail….. I’m assuming you are no stranger to detail if you read this to its entirety.

A client of mine who went to property educational seminars previously was shown how to analyse deals……

He has since become a new client of ours and the big change for him is he realised that what he was taught at the seminar was related to second-hand properties (Which isn’t practical for most people’s Lifestyle, current situation and goals). 

There is a big difference in how to analyse a second-hand property deal compared to analysing an off-plan or new build property opportunity.

Analysing an off-plan project in the same way as the second-hand project is comparing apples with oranges, it’s like trying to make an orange juice using apples ……

It just doesn’t work and always leads to people passing on awesome projects that would make money for them, then they look back 2-5 years down the line and say oh I wish I bought in that project way back when.

Having that clarity meant he could see the real opportunity with off-plan projects without any distortions.

Below are some of the differences:

Second-Hand Property Strategy

  1. Find a good Street (in a good area).
  2. Find the worse property in that street and do it up to bring it in line with others in the street.
  3. Make a margin by adding value to the property.
  4. Continue getting normal market growth.

Usually time intensive or suitable for someone looking to be hands on.

Not scalable people doing this usually are not able to change areas as the market changes so they just know 1 or 2 areas which can restrict returns or

  1. Find a good area.
  2. Find a motivated/distressed seller that needs to sell.
  3. Negotiate a below market value deal.
  4. Get normal market growth.

Usually time intensive or suitable for someone looking to be hands on.

Not scalable people doing this usually are not able to change areas as the market changes so they just know 1 or 2 areas which can restrict returns.

From the above, the equation is GOOD Area/Street + DISTRESSED Property/Person + Get a great deal (BMV Numbers from NOW) because it’s a distressed property or individual (Motivated seller).

Second hand model looks at things from perspective on what the NUMBERS look now and based on this get the best deal based on the NOW (BMV) as you can usually only expect normal market growth….unless you are adding some sort of value which requires time, effort, skill, team and also needs to be reflected as part of purchase costs e.t.c

The money is made from when you buy + normal capital growth.

The rental yield based only on today’s numbers.

Because of this equation, information on property sites like Rightmove, Zoopla and on the market are very important in working out the current market price and negotiating the price down from the market.

Off-plan Strategy

  1. Find a regeneration area (Fundamentals strong and fundamentals improving – more money being pumped into the area, population growth e.t.c).
  2. Get in with Cash-rich developers in that area (They are not distressed sellers…..you want cash-rich developers because they are market makers meaning they can out market others to attract people to their projects and people will buy and pay more for their brand, it’s the way it is and it’s the way it will always will be……Collective market makers with huge marketing budgets move markets in an area).
  3. Negotiate preferential price and or terms.
  4. Benefit from the developer’s price increase strategy.

(From the above you get above normal market returns right up to completion).

  1. Continue to get normal market returns.

Scalable and not restricted to one locality.

Less hassle associated with holding on to new properties.

This is where the Offplan model flips the second-hand model on its head…..(to the benefit of hands-off investors).

The equation looks like this: Distressed Area (Regeneration Area) + Cash Rich Developer (Not motivated but Market Maker) + Numbers based on now, however, the real buying decision is based on where you see the developer taking prices to.

The small money is made from when you buy, the big money is from developer’s price increase before completion + normal market growth (Giving you above normal market growth before completion) + normal capital growth after completion.

Rental yield is from today (however comes completion yields are higher).

Off-plan mainly requires you being able to get in on the ground floor of regeneration of an area, with a cash-rich developer. 

The money is not necessarily made from buying but from the developer’s price increase strategy (Yes we get some discount on purchase) but the mindset is mainly about leveraging of a developer’s price increase strategy so you get above normal market returns before even completion plus higher rents from today.

You have to be able to see a Vision as to where prices will go to in order to move forward as the Big Brand developers are moving their price points upwards through their marketing efforts.

Because the Big Brand developers are always thinking more in terms of price and their marketing efforts – the information on Rightmove, Zoopla and Onthemarket (even though an individual can use them as a guide) however the reality is they are pretty much irrelevant

The big brand developers are not looking on Rightmove, Zoopla or Onthemarket to make their prices, (as Rightmove, Zoopla, Onthemarket can only show you information on Now and the Past)……they look beyond this and look to push their pricing up based on their own marketing efforts in the UK and internationally.

So sometimes we’ll get a project on by a big brand developer and when compared to others on Rightmove you think that’s ridiculous, then 3-5 years further down the line you look at the price for the same development and you look back and think I can’t believe where they have been able to take prices to.

These big brand developers are creating a global demand for the project which helps us, the projects I recommend are part of a bigger regeneration plan which helps support growth and rental demand for investors…….hence the value of a strong brand. 

The way my client put it to me, is the way he now sees it, is that the cash-rich developers are investing huge amounts of money on their businesses on marketing their brand to get people to pay more to buy their properties and by nature, they naturally would want to make the most for themselves. 

So by getting in early with these guys, I get to align myself with their business model and basically allow them to do all the work and I get to keep 100% of the returns.

It’s just the way the system works, you get to choose what system works best for you. Feel free to contact the team at Gladfish today.

Cheers,

Manny Esezobor

Southall

10 best things to do for families in Southall

Indoor and outdoor activities for children of all ages in Southall

If there is one thing that families need, it’s something to keep the kids amused. Parents in Southall never need to ask what to do with kids at the weekend. In and around Southall, there is plenty of family entertainment. You could visit a different attraction or park every weekend for a year, and still not have seen half of what this area of London has to offer to families.

In no particular order, here is our pick of the 10 best things to do for families within 30 minutes of Southall.

1.    Hanwell Zoo

This is a great day out for children from toddlers to twelve years old.

A day packed with wildlife fun, animal ‘meet and greets’, and plenty of educational programmes to help the kids learn about rare species, conservation, and more.

Marmosets, meerkats, and mara are just a few of the creatures that kids will marvel at. Children can run around freely at the zoo’s playground facilities. At Hanwell, youngsters arrive as kids and leave as mini zookeepers!

Where: Hanwell, only 16 minutes from Southall

2.    Airport Bowl

A firm favourite with Southall families on wet weekends, Airport Bowl in Harlington is home to an incredible 36 lanes of 10-pin bowls. There are also eight pool tables, a video arcade and a food court.

It’s a big winner with children for birthday parties, with medals for all, food, unlimited squash, photos and balloon modelling all available to add extra sparkle to the party fun.

Where: Harlington, only 22 minutes from Southall

3.    Dinosaur Escape

A mini golf adventure. Instead of windmills, near life-size moving dinosaurs try to stop you making a hole-in-one. This is crazy golf taken to another level, with 18 holes meandering through a Jurassic jungle. It’s like taking a step back in time, with the air filled with the noise of the prehistoric past. You’ll be wondering what lurks around the next corner.

It’s not all about hitting a ball with a club, though. There is plenty of dinosaur history and information to collect as you make your way around the course, ensuring that you and your children leave a little more enlightened. Another venue that is great for birthday parties, and exceptional fun for children of all ages – right up to 99!

Where: Northolt, only 10 minutes from Southall

4.    Ceramics Café

The Ceramics Café is the place to visit for a fun activity that will build great memories as the children create wonderful keepsakes. Simply select the piece you wish to paint, choose you colours, and paint your design on the item chosen. Return in a few days, and pick up your keepsake. They make perfect gifts for grandparents!

You aren’t left alone to hope your work comes out the way you planned. Experienced staff are on hand to offer all the help needed. A fun activity with a beautiful end result.

Where: Ealing, only 17 minutes from Southall

5.    Northala Fields Park

The award-winning Northala Fields Park has something for everyone, and for children of all ages.

With six fishing lakes, three wildlife ponds, a model boating lake, and two well-equipped playgrounds, it’s a fantastic place to spend many hours. Take the family for a ramble through the woods, and see if the kids can find the mosaic in the middle of the park.

Bring the bikes to make exploring a little easier, or, better still, a kite for a bit of flying on the fields – a very popular pastime here.

A visitor centre includes a café, toilets, a fishing office and classrooms.

Where: Northolt, only eight minutes from Southall

6.    Jungle Versatile Indoor Play

A fantastic indoor play centre for children up to the age of 12, with rope swings, crawl tunnels, ball pits and more. Fully air-conditioned, it’s the perfect place to bring children when you want them to have the kind of fun that ensures they are worn out by bedtime.

A five-star café sells a range of hot and cold food and drinks, but you don’t need to sit out the fun – parents can join in during the interactive parent and child sessions.

Birthday parties can also be booked here, and there is also a range of seasonal events throughout the year.

Where: Hounslow, only 21 minutes from Southall

7.    Oxygen Freejumping Acton

A trampoline park with 150 wall-to-wall trampolines that will get your kids bouncing. There’s a giant obstacle course to tackle, games of dodgeball to win, and basketball hoops to slam dunk from a bouncing start. As if this were not enough, there are fancy dress sessions with prizes for under-fives, and if your bounce isn’t quite up to the mark you can take trampoline lessons with a British gymnastics qualified instructor.

Where: Acton, only 22 minutes from Southall

8.    Brentford Leisure Centre

Brentford Leisure Centre is all you would expect it to be, and then some.

A multi-purpose centre, it includes a gym with more than 100 fitness stations, swimming pools for serious swimmers and waves and flumes for the funster, a children’s soft play area, squash courts, and a sports hall for racket sports and five-a-side football.

Activities here include swimming lessons, holiday activities and birthday parties. If you don’t fancy a high-energy afternoon, enjoy a drink and a bite to eat at the centre’s café while the children are learning to swim or with their team on the five-a-side pitch.

Where: Brentford, only 19 minutes from Southall

9.    Hounslow Urban Farm

Hounslow Urban Farm is a city jewel, and a fantastic day out for children who wouldn’t normally see farm animals. It is one of London’s largest urban farms, covering a huge 29 acres.

There is a farm café for lunch or tea, a bouncy castle and a souvenir shop. But, of course, these aren’t the main attractions.

The kids will love the animal encounters, which give them interactive time with the animals through the day. Parent the pigs, greet the goats, shake hands with the sheep. Wonder at the majesty of the owl. The fun doesn’t stop. The farm has a small group of Shetland ponies that give a fantastic introduction to pony riding.

Where: Hounslow, only 23 minutes from Southall

10. The Secret Railway

The Secret Railway – or, to give it the correct name, Hampton & Kempton Waterworks Railway – is the only operational narrow-gauge railway inside the M25. Once used to supply London with drinking water, it is now a visitor attraction that holds events throughout the year. These events include:

  • Superheroes Day
  • Dinosaur Day
  • Ghost Train
  • Santa Specials
  • And more

There are special museum days that include model railway exhibitions, stationary engines and model boats, classic car and bike shows, and a Christmas Fair.

Wow! So much to do here, and this is before you have even taken a ride on the little steam train.

Where: Hounslow, only 29 minutes from Southall

Southall – a great place for families to live

Southall is a great location for families. There is plenty to do here, so the kids should never get bored. The Taxi of Mum and Dad may get a little exhausted, though, with the weekends the perfect time for kids to let off steam from a hard week at school.

Now we’ve mentioned education, it’s worth noting that 13 of the 18 primary schools in Southall are rated as good by Ofsted. At the secondary school level, the most highly-rated schools are Dormers Wells High School, Villiers High School, and the outstanding-rated Featherstone High School.

Southall is a great place for families to live, and it’s getting even better. Berkeley Group is developing Southall Waterside. This development is ideal for families. Parks, trees, water and gardens. Shops, restaurants, cafés, art and entertainment. With Crossrail on its way here, Southall Waterside will be only 17 minutes from Bond Street. And, of course, within a few minutes of some of the best family entertainment and activities in London.

With the population here forecast to grow by 13% by 2030, the potential for profitable property investment is huge. For more information about Southall Waterside property, contact the team at Gladfish today.

Live with passion

Brett Alegre-Wood

Property Investment UK

Why property investment in the UK is so attractive

Where else could you achieve these huge benefits?

Property investment in the UK is still attractive, despite the headwinds of higher stamp duties on investment properties, a tougher borrowing environment, and changes to the tax relief on buy-to-let mortgages and wear and tear costs. Here are a few of the major reasons to invest in UK property.

Demand for property outweighs supply

The law of supply and demand has impacted the UK property market for centuries. A continuously growing population fuels demand for new homes. This boosts the price of homes and is great news for property investment in the UK.

According to the Office for National Statistics (ONS), the UK population is forecast to grow to:

  • 2 million in 2026
  • 70 million in 2029
  • 9 million in 2041

This is population growth of more than 11%. To put this in some perspective, the UK would need six cities the size of Birmingham to house it – or 13 Manchester, or 12 Liverpool. That’s a huge demand for extra housing.

UK property investment has continually proved itself as a solid investment

The average UK house price has doubled every eight to 10 years during the last 100 years. Even during financial crises, property investment in the UK has proved more resilient than other assets. When the stock market almost halved in 2008/9 because of the Global Financial Crisis, the average UK house price fell by just 14%.

Stock markets tend to have crashes every 10 years or so. The Oil Crisis was blamed for the slide in the mid-1970s. Then there was Black Monday in October 1987. The dotcom bubble burst in 2000. Throughout such stock market volatility, UK investment property has remained remarkably resilient and astoundingly stable. As ‘safe as houses’, as they say.

(Read our article “If you’re a long-term investor in stocks, you’re a long-term loser” to discover the truth your financial advisor would rather you not know.)

Inflation-proofed income – great for retirement

When you invest in buy-to-let property in the UK for the long term, you benefit from the rental income that you control.

Generally, rental prices increase in line with inflation. Sometimes they rise slower, and sometimes faster.

If you are investing for retirement, the inflation-proofing quality of buy-to-let investment property in the UK will be very attractive to you – especially when measured against the cost of an annuity designed to protect your income against inflation.

You make money on other people’s money

In the UK, you can borrow to invest in property. This means you have the potential to make money on other people’s money, thus boosting your comparable return.

As an example, let’s consider an investment of £200,000, using £50,000 of your own money as a deposit and a £150,000 buy-to-let mortgage to fund your investment. Let’s say that the mortgage interest rate is 4.5%, and you achieve a gross rental yield of 7%.

You will make a gross income of 2.5% on the £150,000 you borrowed, after allowing for the interest payment. Put another way, your gross rental income is £7,250 (7% x £50,000 + 2.5% x £150,000), or 14.5% of the capital you invested.

It gets even better. Should the property value increase by, say, 30%, it would now be worth £260,000. Before costs and tax, this is a profit of £60,000. That’s 110% on your original £50,000 investment.

Such incredible potential returns are all thanks to the benefits of leveraging in property investment.

Perfect passive income

Finally, here is the one that will really make a difference in your life. Who wants to work for their money, when you could be sitting at home (or on a beach) enjoying the fruits of someone else’s labour? Hire an investment property manager to manage your property, and benefit from the perfect passive income that could give you the lifestyle you deserve.

Summing up

For its potential to produce incredible passive income and capital growth over the long term, property investment in the UK is a highly attractive option. Projected population growth should help it to produce the kind of returns it has historically, as you benefit from using other people’s money to maximise the return on your own investment capital.

For more information about investing in UK property, contact the team Gladfish today, at  +44 207 923 6100.

Live with passion

Brett Alegre-Wood

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What type of residential property is best for retirement income?

Village, high-yield, or inner city?

A new client, Scott, spoke to me a week or so ago and asked about property as a retirement income generator. He’d been told by his financial advisor that an annuity would provide the best and safest income in retirement. A friend of his had said that he’d be better off putting his money into buy-to-let property. Being an intelligent kind of guy, he wanted to investigate further before making a decision. Read More
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Why off-plan property investors don’t care about recessions

Off Plan Property - market collapses present opportunities, not problems

Inexperienced property investors are terrified by the thought of a recession decimating their property portfolios. Until you have invested through a recession, it’s natural to be worried. After all, during recessions people lose their jobs, wages are cut, and doom and gloom stop people spending what money they do have. During a recession, stock markets will probably fall, and lower interest rates will reduce the income you receive on your savings accounts. For most investors, a recession spells losses. In this post, you’ll find out why you don’t need to be scared of a recession as a property investor. You’ll also meet Dan, whose lifestyle was catapulted skyward through a recession because of his property investments. Read More
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What does a mortgage broker do when you buy off-plan property?

  1. Off-plan property mortgages need kid gloves
As we saw in our last investment blog post, off-plan property contracts are complex documents.  An experienced and competent solicitor is a must-have. So too is a good mortgage broker. The right off-plan property mortgage could be the difference between positive and negative cash flow. It could be the difference between relying on capital growth and making a net profit from your rental income. In this post, you’ll learn what a mortgage broker does in the weeks between you putting down a reservation fee and exchanging contracts. I’ll also explain what a mortgage broker can do to iron out certain financing difficulties when you buy off-plan property. Read More
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