Profiting from an investment property databank
In my career, I’ve built up a pretty big property investment network. It stretches the length and breadth of the UK and across continents. Among this network there are some incredible investors who only ever buy in their local market. Mostly, they make good money; but would they do better to widen their vision and look further afield?
In this post, you’re going to meet Harry and Doreen, two very similar and yet very different property investors. Their stories demonstrate the benefits of thinking nationally and searching locally.
Meet Harry from Hull and his local investment property databank
Harry started property investing in Hull, his local market, in 2006. He’d lived in Hull all his life. He knew the market, knew the people, and was confident he’d make good long-term returns from Hull’s investment property databank.
He’d seen terraced house prices rise from an average of £50,000 in 2004 to around £75,000. The market was strong and, although rental yields had fallen to around 5%, the combination of capital growth and rental income that he expected was irresistible.
He joined a local property investors’ network, and for a couple of years things went well. He had added to his property portfolio, and by 2008 he owned a dozen properties in Hull. The average price had increased to almost £90,000. Then the Global Financial Crisis hit.
Nearly ten years after he started investing, Harry’s property portfolio is barely profitable. The average price of his properties is £84,000. That’s actually a little under what he paid. The economy was hard hit in Hull. Several of Harry’s tenants were unable to pay their rent. A few did a bunk. Harry’s kicking his feet hard just to keep his head above water.
Meet Doreen from Norwich and her national investment property databank
Doreen started investing around the same time as Harry, and her first investment was also in Hull, where she had lived for most of her life before moving to Norfolk for work. Her investment was a property in the same street as Harry’s first purchase. But from there, she did things a little different.
She decided to partner with a property investment company and benefit from a wider property investment network. Through this company, she had access to exceptional property research. She learned about investing in infrastructure and regeneration and decided to profit from the company’s investment property databank.
Instead of concentrating on a single area, Doreen invested in several areas. She also decided to invest in off-plan properties, benefitting from an in-built discount to value.
She bought a property in Birmingham at £113,000 (value now £146,000), one in Manchester at £108,000 (now valued at £132,000), and two properties in Liverpool, one at £92,000 and the second at £89,000 (now valued at an average of £92,000). Her star purchase was the property she bought in Wembley in 2011. Having paid £214,000 for this property, it is now worth £293,000.
Whereas Harry’s portfolio is treading water, Doreen’s is valued at over £149,000 more than she paid. The only tenant problem she’s had is in Hull and has been resolved.
How did Doreen profit from an property investment network?
By hooking up with other investors and hearing about the experiences of others, Doreen realised that it is exactly because of the local nature of property investment that she needed to look on a national basis.
The property market in different locations will be at different stages of the property cycle. Where that cycle is and the strength of an area’s investment property databank depends upon local and national factors: the general economy and local economy, and local infrastructure build and regeneration projects.
The trick is having the ability and the property investment network to search local but act national. Take a wider view, and profit from the entire country’s investment property databank. Pick and choose the best investments at the most opportune times. Then have a national property manager look after your properties for you.
Get in touch with Gladfish today on +44 (0)207 923 6100 and you could also benefit from property networking like Doreen.
Cheers,
David Lines
