A Guide to Property Investment

Produced by Assetz for Vistage

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As a Vistage member, I appreciate that time is slim and, indeed, precious for company directors. Although property investing is often viewed as more time consuming than investing in other asset classes, the benefits can by far outweigh the time and effort required. Property investment can be both highly rewarding and an efficient use of resources and assets, as long as a thought-through, well-directed strategy is adopted from the outset. By investing time in the beginning to design a plan to meet your specific goals, a lot of time can be saved throughout the course of investing. For example, the time spent considering potential property purchases is reduced as no time is wasted considering property types that have already been ruled out during the plan design phase. You should always treat property as a long-term investment in order to reduce risk and maximise potential gains. In addition, make sure you buy property with your head and not just your heart, make sure the investment is cash flow positive where possible and make sure there is plenty of upside in the capital value in years to come - in essence, start with the end in mind. I built my personal property portfolio up over the years to be a family pension. That means that I am interested in how much income a given investment will generate in the future once the mortgages are paid off and how that income compares to the capital investment requirement at the beginning. Thinking this way, and diversifying my investments across buy-to-let, student accommodation, commercial property and overseas property, has helped me grow a multi-million pound portfolio from modest beginnings that will quickly repay its debt and provide strong rental income to enjoy in the future. When we founded Assetz more than ten years ago, it was to create a single source for all the property investment advice, research and property needed by todays property investor. We cater for all requirements, whether you are seeking a single residential or commercial property, a portfolio of buy-to-let properties or a holiday home with investment potential. We deliver you truly independent property investment analysis and utilise this to help select the best properties and locations available in the current market. Many of our clients also utilise our unique portfolio planning services and software, MyPortfolio, as a proven and robust financial planning system for property. I have invested personally, and successfully, in many of the properties that we have sourced, producing a resilient and cash flow positive portfolio that weathered the recent credit crunch superbly - a greater endorsement of our analysis and due diligence will be hard to find. I wish you every success in your investing and hope that you will avail yourselves of the wide range of expertise and experience that our team at the Assetz group of companies has on offer. I also look forward to meeting you at one of our future events. Stuart Law, Assetz CEO

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Our experience over the last decade has shown us that successful property investment neednt be complicated, provided that you follow a few guidelines. Indeed, it has been shown that by keeping to a cautious, income-centric, long-term and realistic strategy, investors can make the most of property investments in both good and bad years. It is easy for investors to be tempted away from these strategies in good years as greed can fuel a disregard for risk and sensible planning. Hindsight is a wonderful thing. Most people who invest in property see it as a way of securing their financial freedom for the future but many have been less than clear on how this financial freedom will be achieved. Lets take a quick look at competing strategies that investors could, and have, used and where we feel their weaknesses lie. "#$%&'(#)!*+,!-,+.'/! Many invested in the property market for growth with the intent of one day selling their property portfolio to create the capital they needed to live off for a comfortable retirement. However, in reality you actually need very large growth and/or a very long timescale to create enough real capital growth for this to be achievable. With high growth often also comes high risk. In addition, with life expectancy ever increasing, it is risky in its own right to live off capital as it is difficult to estimate how much cash is required to keep a comfortable lifestyle going indefinitely. Purchasing an annuity with the capital created from a property portfolio is, of course, another method of financing retirement. However, by way of example, a 65-year-old male client would currently need a 1m pot of capital to buy an annuity that would provide an RPI-linked income of 42,000 pa. He would need more again if his wife wanted an annuity for a separate income. Given that business people may well require a greater income upon retirement, it will take a significant time-frame to produce such an equity stake and may well require significant starting capital or significant risks, and luck, to achieve such growth. 0/%!123('24!5%4%2&%!0/%+,6! Many people in the boom years, lulled into a false sense of security by ever-increasing property prices, planned to retire on the cash generated by repeatedly releasing capital through remortgaging their property portfolio. But what happens if property prices didnt rise for a significant period, if the loan-to-value levels available from lenders fell, or if the costs of remortgage rose? We dont need to dwell on the weakness of this approach highlighted over the last few years. 7+8%!9:;('6!5%4%2&%!5+;'%! Another approach that many people have taken is to use their home as an asset to live off in retirement. Large numbers of the UK population found themselves owning a far higher value home than they would have ever thought possible when they bought it originally. This led to the misconception that their home was an asset. In reality, we believe that the family home is actually a liability until sold, with there being council tax, utility bills and upkeep costs that create negative cash flow during the period of ownership. Even upon retirement and with the value of the home being high, most retirement equity release products only allow the borrower to release around 35% of the value, which is unlikely to be sufficient given the annuity returns highlighted above a 3m house could create an income of just 42,000 pa for a 65 year old male for example.

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Following the turmoil over the last 3 years for the UK and overseas property and financial markets, an increasing number of investors see merit in finding and using long-term, income generating strategies using more modest debt, rather than being tempted to use get-rich-quick techniques and excessive gearing.

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This paper aims to outline the simple principles we recommend to our clients that we feel should be followed to maximise returns and manage risk. These principles apply to all types of investors from first-timers through to seasoned buy-to-let investors with an existing portfolio. In fact, we have noted that our client base is becoming increasingly varied, with people from all backgrounds and with varying levels of experience. Todays economic climate is a large driver behind this trend, as people increasingly see property as providing a more stable income and less capital value volatility than those offered by other investments. Unlike many other investment products, most people considering investment in property will already own one. When buying property as an investment however, there are a few more things you need to consider. What are they?

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Before investing in property, you should consider your long-term goals. This allows you to plan your investments and property portfolio accordingly. Many people have a general feel about wanting a good deal without a definite end goal in mind. Although a quick buck can be gained from speculative property investments on occasions, this often proves to be an extremely highrisk strategy. Generally speaking, property should be seen as a long-term venture to minimise risk and to align and capitalise upon the latent strengths of property investment. Many people who invest in property do so with the aim of achieving a debt-free, secure income in retirement. With careful planning, a property investor can retire in a reasonable number of years with a reliable, rental inflation-indexed income. Each individuals needs, in terms of the timescale and the income level, are different and therefore each plan is different. Using a plan that is designed with an end goal in mind, rather than trying to make a quick buck in the short term, helps investors weigh up which investments perform best for their particular objective. Each property purchase can be evaluated for what value it brings to the plan and for its level of risk. Whether you can meet your objectives will also rely on how much capital you have available to invest initially. The plan must be realistic dependent upon the likely levels of income the portfolio generates in order to fuel the portfolio. We recommend all investors initially start with a relatively modest level of income in mind that may not finance luxury cruises or a new car every year but will instead provide a safe level of income for them for them in retirement. We recommend that investors also start with a realistic date of retirement, rather than their perhaps preferred date of early retirement. By keeping the targets low initially, no undue risk is taken in the early days of building their portfolio. Once investors feel comfortable that their initial plan is working they can then consider improving their timescale and their income targets. Investors can also modify their plans as they go along in line with any windfalls, company sales, inheritances, bonuses and other injections of cash that they could make to the portfolio. The next step is to decide what type of property you wish to purchase.

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To aid the construction of a balanced portfolio, we generally classify property into two categories: Property primarily purchased to generate long-term reliable income or yield (that we call Generators). If the rental income is based upon robust tenant demand then it can be highly predictable and can be classed as a true income-producing investment. Property primarily purchased for capital growth to potentially accelerate a retirement date (that we call Accelerators). As growth cannot be guaranteed, particularly in the shortterm, these are essentially speculative purchases unless also underpinned by strong rental income.

With prices set back over recent years it is quite possible, at present, to purchase a property that can satisfy both criteria. The differences between these two types of property investments are almost self-explanatory but well look at them in more detail to help you apply your own decisionmaking criteria. #'/'+4()+1!<3;,=/2&%>!*+,!(#=+8%?! The capital value of income-generating property is often directly related to the rental income itself - if the rental income goes up then the value goes up and the ratio of the two is known as the yield percentage. Traditional offices and shops are valued in this way but some semi-commercial property, such as student accommodation, can also be valued based upon yield. Income Generators tend to be bought to provide a secure, hassle-free retirement income so a reliable net yield with minimal hands-on involvement are two of the key reasons for buying this kind of product. Resale can be a less important factor because strong income Generators tend to be purchased for the long-term and inflating income delivered. Income Generators can include commercial and industrial units, purpose-built student accommodation, hotels etc. Some of these can be purchased on a unitised basis (for example you could own a single room in a hotel or a three-bedroom student flat within a purpose-built private hall of residence). The key to income Generators is that they must generate strong enough net yield to service a mortgage, pay other costs and tax as well as repay the debt on the property over a reasonable period of time (normally no more than 20 years). "BB'6'+4()+1!<3;,=/2&%>!*+,!),+.'/?!! Historically, UK residential properties have had higher capital growth rates but lower yields than commercial property. Residential properties in popular locations have produced an excellent return on capital invested over the long-term but, at times of higher interest rates or after a period of strong capital growth, can struggle to cover costs when borrowing is used. With today's reduced prices and booming rents, higher rental yields can be achieved but the potential for capital growth over the medium to long-term remains given the recent huge setback to house building capacity in the UK. Most people purchase traditional residential property as an investment in order to potentially make long-term capital gains whilst the rental income covers mortgage payments and on-going management and maintenance costs. The exit route here is familiar to most people as we have all used estate agents to sell properties to owner-occupiers. Emerging markets also offer investors the potential for higher than average capital growth but, as with any speculative investment, it is critical to judge correctly whether pricing is supported by genuine rental and occupation demand (the UK residential market for example) or is just a speculative bubble (Dubai perhaps).

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It is important to have a balanced portfolio that reflects your risk profile and investment timescale. Younger investors can take more risk through a bias of investment in carefully selected Accelerators but those with less time and the need for more certainty should bias their investments towards the acquisition of good quality income Generators. Our recommended strategy for property investment is to carefully blend together appropriate Accelerators and Generators into a single portfolio that can perform very strongly in growth years but still produces good investment returns and a safe income level in periods of capital growth stagnation or falls. The key to reliable, index-linked income for retirement is to build a core portfolio of hands-off, high income and relatively inflation-proof rental Generators. The Accelerators that provide potential capital growth would be intended to be sold in the future in order to provide enough capital to repay early the remaining debt on the Generators that are going to be held for long-term income. Any excess capital produced would represent an additional lump sum. In this way the investor is left with a completely debt-free, income generating portfolio as well as the lump sum.

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The recent period of property value volatility makes it very easy to understand the potential risks in different types of portfolio. An over-reliance on capital growth and too many Accelerators can produce little return and indeed losses in periods where property prices stagnate or fall. If this were to happen over a significant period of time, which is entirely possible, the effects on a portfolio's performance could be disastrous. On the other hand, a portfolio biased towards income generating properties that will be held for life, rather than sold for capital growth, can sail through periods of property price weakness. Owners of this type of property who secured long-term fixed rates of debt that they gradually repaid out of net income need not concern themselves with day-to-day property prices as they have no intention to sell the assets producing them their retirement income. Even if property prices never went up again, these investors would see debt-free income provided in a reasonable time-frame. Mixing together some Accelerators and Generators can produce optimal results as a 15-year time-frame, for example, will almost certainly produce some capital growth within the Accelerators allowing them to be sold to repay the Generator debt early. Periods of inflation can also significantly help property investors by deflating the real value of mortgage debt, inflating rental income and inflating the value of the assets owned. Real estate is known as one of the best traditional hedges against inflation. The unique and free MyPortfolio software, designed by Assetz for its financial planning clients, makes investors lives easier by calculating the numbers for them. For any investor using this above strategy, this software will calculate when the optimum time is to sell the Accelerator properties in order to pay off the debt on the Generator properties. It will calculate whether there is an adequate number of Accelerator or Generator properties in the plan to reach the objectives and will permit stress testing for alternative scenarios of interest rates, inflation and voids, etc. Levels of obtainable finance can also be important in choosing a particular property type provided that the rental income is strong enough to support such debt. Borrowing on the property is probably the highest risk a property investor exposes themselves to, so it is best to manage interest rate risk with judicial use of fixed rates or swaps.
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An important consideration in deciding which properties you wish to purchase is how much involvement you want with your portfolio on a day-to-day basis. Fully-managed, purpose-built student hall accommodation (which has been the best performing property sub-class for the last 20 years) tends to be very hands-off and hassle-free. Without a good agent in place, however, traditional residential property can take more time to manage and some people purposefully cut out management charges by managing a buy-to-let portfolio directly. This can effectively turn a property investment into a property business and, whilst returning a better yield net of costs, can be onerous. If you are busy enough already, it is very important that fully-managed property forms a significant part of your portfolio. Allow us at this stage to refute the old adage location, location, location! and replace it with a deal, a deal, a deal!. When choosing the right property to suit your individual requirements all aspects need to be considered (including location) but cost of acquisition, cost of ownership and probable exit strategy are certainly of prime importance.

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Let us look at the range of residential property types, as depicted in the image below. Essentially, the more desirable a property is to an owner-occupier, the easier it will be to resell. It does not always mean you will get a higher price, just that it will move more quickly. Similarly, the more desirable a property is to a tenant, the easier it will be to re-let with minimal void periods. Properties desirable to owner-occupiers and in areas of low supply versus demand tend to produce higher capital values and lower yields - something typical of the London market, for example, but also evident in other attractive areas to live around the country. Generally speaking, property types which give the highest yields, such as terraced houses or studio apartments, are less likely to resell as quickly as more desirable properties which offer lower yields such as detached houses or penthouse apartments, although unusual economic conditions can affect this general principle.

Properties with extra selling points are likely to be more desirable and easier to sell but will not necessarily provide a higher yield. A garden, en suite bathroom, terrace, balcony or garage will increase the desirability of the property, as will the availability of parking, particularly in built-up urban areas. These selling points will increase the appeal of the property to both owner-occupiers

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and tenants but, due to the additional value of the property, may have a detrimental effect on the achievable rental yield. Take the example of a typical apartment block in a major city centre. A typical 2-bedroom, 700 sq. ft. apartment will cost about 150,000 in Manchester. The most desirable apartments in this block, when new, would probably have sold at close to the developers asking price, while the developer would probably have sold a portion of the scheme at a discount, either off plan or at the end of the scheme. The resale price of these two apartments might vary slightly but not by as much as when they were bought. Frequently, new-build apartments would increase in price by thousands of pounds per floor and over 20 storeys this is a huge amount. The more desirable apartments, whilst giving a lower rental yield, are likely to sell much more quickly however. Many people insist they will only invest in houses but buying well is much more difficult. Developers make much more profit per apartment so they are able to give much bigger price reductions. The present market conditions however, make the acquisition of houses for investment purposes a little easier. When looking at houses, generally you should expect less opportunity to achieve discounts to asking price and also to achieve lower yields than apartments, although many people perceive houses to be safer investments. Again, there is the spectrum/hierarchy of houses ranging from rows of terraced properties in poor areas where gross yields are usually in excess of 10% over to prime central London properties with gross yields of around 4%. Dont expect too much in the way of capital growth in the lower-quality cases with your exit probably being to another investor rather than an owner-occupier. If well managed by a specialist agent, these can be a reliable source of income. At the other end of the scale, the right area means your long-term growth will be safer (providing you dont buy at the top of the market) but yields are generally very low. @%.!A;(4>!B%,&;&!5%&24%!C,+3%,'6! This isnt as straightforward as it sounds, so lets look at some of the factors. Resale properties are considered a safer bet by lenders as so much optimistically priced new-build property was being sold three or four years ago. Resale properties have more stable comparables nearby for valuation and probably have a proven track record for lettings. On the other hand, new build will generally have a ten-year warranty so there is less need for a structural survey or potential costly modernisation. You will generally get a 2-year guarantee on white goods and flooring, too. In certain areas (generally poorer ones) new-build apartments are considered much more prestigious than older houses so have a greater local demand. Properties at this end of the market are cheap to buy and ideal to resell to a first-time buyer when you eventually want to realise your capital. Institutional and overseas investors tend to prefer new build due to the ability to purchase blocks and control the management and maintenance costs better. 5%3+&&%&&(+#&! Repossessions are always considered a bargain but those sold at auction are sometimes sold at higher prices than could have been achieved privately. They are usually sold as seen and it can be difficult to ascertain repairs required in the time you have to purchase such a property. Estate agents are not supposed to indicate which properties on their books are repossessions but other hints usually exist; look out for yellow tape over the toilet or on the oven in the photographs,

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indicating that the utility supply has been disconnected! Nonetheless, asking which of their available properties are currently empty and very cheap might be a clue.

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A recent example was for 2-bedroom apartments in an area where owner-occupiers were buying at around 80,000 via the governments homebuy direct supported deposit scheme. This came to an end in October last year and led to the developer trying to continue their sales pace by making apartments available to investors for 63,000. These properties will achieve a monthly rental income of 475. In the coming years, mortgages will become more readily available and you should be able to resell the apartment for at least 80,000. In the meantime, you have been making a gross yield of over 9% (approximately a 5.9% net yield after costs and voids and excluding future potential capital growth). The recession has turned a traditional capital growth Accelerator investment into a good-quality income Generator as well. Bringing gearing into the equation, the following summary outlines typical returns that can be expected from this type of investment. Property price: 63,000 Deposit (40% of the purchase price): 25,200 Loan: 37,800 Mortgage repayments: 1,508 pa approximately (126 per month!) Rent: 5,700 (475 per month) Costs*: 2,000 (approximate including service charges, rental voids, letting and management agency costs) Net income before mortgage payments: 3,700 Assumed property price growth in the year: 5%

Cash Purchaser - Capital employed: 63,000, net rental income: 3,700 cash-on-cash return for a cash purchaser of 5.9% plus 5% capital growth producing a total return of 10.9% on cash invested. Mortgage Purchaser - Capital employed: 25,200, net rental income: 3,700 cash-on-cash return for a cash purchaser of 14.6% plus capital growth (5% of 63,000 or 3,150 and a further 13.6% return on cash invested) making a total return of 28.2% on cash invested. Even with modest and relatively safe borrowings it can be seen that the investment returns are very significantly improved by the use of debt. A property price fall of 5% would have taken total returns for the year to approximately 0% in both cases. (*Residential buy-to-let costs are typically around 35% of gross rental income when including lettings fees, maintenance, ground rent, service charge and voids)

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The main challenge when buying investment property is how to buy well, at a good price under a realistic market value. There are many ways to attain exceptional pricing. You can negotiate a good deal from somebody who has a lot of properties to sell for example. The three main sources of these are developers, banks (development funders and mortgage providers) and landlords with large portfolios to dispose of (this can include investment funds). When dealing with resale properties, this can limit the number of sources, as an owner-occupier will generally only have one property to sell. This leaves banks and investors with portfolios of which they wish to dispose. As ammunition for negotiation, be armed with your proof of funding and a solicitor who can move quickly. This will greatly improve the strength of your position and help maximise your achievable discounts, giving you the best deal possible. One of the key tools for the seasoned negotiator is knowing what is valuable to the other side while keeping your own vulnerabilities hidden. In virtually all bulk property deals, the critical factor for the vendor is certainty of completion. They need to know you are able to proceed and when they will get the money. This can be exploited in different ways depending on who the vendor is. For large house builders (ideally a PLC with results to report!) you need to time your offers and negotiations to their year-end and equivalent financial quarters. If they are behind sales target then you are in a good position to push them on price. These targets are often based on numbers of units rather than profit! In return, you need to be able to complete within the specified time and they will probably expect a swift exchange of contracts. If you fail to complete by the specified time, they will probably keep your deposit and put the price back up as the urgency has gone. Developers also have remaining units that are unsold on sites they wish to close down and these are sometimes available at a bargain price. Running a marketing suite on site is a significant overhead and they may have already made their profit on the bulk of the units sold. Combined with a fast approaching year-end, this is a strong position from which to strike a deal. If there is a significant debt against a development, then selling one plot makes little difference to the overall debt, especially if it is still accruing interest. If the developer is in administration there is usually a time limit for this so, if you know when this date is, you can use this in the same way as a developers financial year. Landlords with large portfolios to dispose of: this depends purely on the personalities involved but individual landlords who have carefully built a portfolio over time are usually averse to letting things go too cheaply. Dont forget, in this instance, you are part of their exit strategy! There is no standard ammunition in the case of dealing with another landlord as their key objective is the same as yours - to maximise their financial position - i.e. price. One thing to watch out for is if they break up their portfolio into smaller chunks you may find some desirable properties lumped in with poorly performing ones. Make sure your due diligence gives you sight of individual rents for each property rather than total rent for a group of properties and be attuned to the possibility that they are a forced seller as a result of possibly over borrowing on their portfolio.

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So you have found a potential investment opportunity but how do you know it is actually a good deal? This question can be answered by investigating three key areas; comparables, sold prices and rental demand. 1+832,2D4%&! You need to find out whether you can buy a similar type of property for a similar price in the local area. For example, you have found a 2-bed apartment for 100,000. The first step is to search on the internet for other 2-bed apartments within, say, half a mile. Hopefully you will also be able to see some internal pictures so that you can find some suitable comparables. If similar apartments are on the open market for say 95,000 105,000 then the price you are being quoted is hardly an investor price. In other words, you are basically paying an open market price. If however, similar quality 2 bed apartments within the area are generally 115,000 upwards, then you are clearly getting a good price and are therefore more likely to see capital growth quicker. (Recommended websites; Rightmove, Local Estate Agencies) ! E+4>!C,(=%&! You should find out what prices have been paid either in the same development, on the same road or in the local area for similar properties. In addition, you may want to find out what the property sold for last time. For example, you have found a 2-bed apartment with an asking price of 100,000. The first step is to go on the internet to one of the Land Registry house price databases and type in the exact postcode or road name and house number to see what results come up. If other apartments in the same development have recently been sold for, say, 120,000 upwards then you are clearly paying well below recent pricing. If no results come up for the exact same postcode then you might have to shorten the postcode to bring up results in the local area. If you are able to see that other apartments of a similar type in the local area have also been sold for 120,000 upwards, then this helps to show that you are paying a good price. If there is a lack of specific information on sold prices then the best plan is to search the general area to get a feel for the prices that are being paid for property over the last few years and to compare your quoted price accordingly. (Recommended websites; Rightmove, Land Registry House Prices, Zoopla) 5%#'24!F%82#>! You should also find out how well your investment will let out. Rental demand underpins property values. Your potential investment might have a beautiful fit out with a huge garden and a garage but how much will it let out for and, more importantly, is there a rental demand for this type of property in the area? Another example is the difference between, say, a city centre apartment and a residential suburban apartment. In theory, the city centre apartment would be a more attractive investment because it is desirable to affluent, young professionals and close to all the best amenities. However, it is conceivable that the suburb apartment has a greater rental demand because families and elderly couples would also consider living there. The best way of answering these questions is by calling local letting agents to discuss the health and drivers of the local letting market. Letting agents are a fantastic source of useful knowledge who can provide valuable information. Useful questions to ask are; How much can you let it for? How quickly can you let it? What type of tenants will I get? Once you have pulled all the information together, you are in a position to make an educated decision on the rental demand. (Recommended websites; Rightmove, Findaproperty, Zoopla, Local Letting Agents)

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Sourcing excellent investment property can be both an art as well as a science and we have been doing this for many years on behalf of clients. Buying sound investment properties over a reasonable period of time to build a balanced portfolio that will produce hassle-free income for the rest of your life can be a very strong component of an overall balanced retirement plan. For the business owner, extracting business profits each year to invest into the portfolio can provide a very useful Plan-B against the unknown value of a potential business sale in the future some would say perhaps it should be the Plan-A.

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As previously mentioned, purpose-built student property has been the best performing property class for the last 20 years and is a perfect Generator for any property portfolio. These types of property are usually fully managed by an on-site management company who take care of maintenance, changeovers, cleaning, finding a tenant, etc. In short, they do the legwork so you dont have to. With extremely strong rental demand and a shortage of supply of new developments, purpose-built student property is the ultimate hands-off, hassle-free investment and can provide a reliable, long-term income for investors. Here, well look at why we rate purpose-built student property so highly. Student accommodation has always been one of Assetz' primary recommendations to any investor, whether you're looking to add to your existing property portfolio or this is your first ever property investment. Our reasoning for this is quite simple: it's a low risk, high-yielding and totally hands-off investment and our clients have profited hugely over the last five years from following our recommendations in this sector. It is also a sector where Stuart Law, the founder of Assetz, has made significant investments in his own portfolio. With UCAS reporting a 23% rise in applications for 2010-2011** student places and a huge national shortage of student accommodation, this is still a perfect time to take advantage of current investment conditions. It appears that the impact of the recession has been to increase the number of applications for places (King Sturge UK Student Accommodation Report 2010). With high rental yields (typically between 6-10% gross yields depending upon the property type) and totally hands-off, hassle-free ownership, student accommodation ticks all the boxes. A%#%*('&!+*!"#$%&'(#)!(#!'/%!E';>%#'!C,+3%,'6!E%='+,!
Highly cash-positive, long-term investment typical rents are significantly higher for student properties than a comparable BTL property in the same city. As a result, mortgages can often be paid off in 20 years or less from the net rents received. More people attending universities, creating a solid and sustainable demand. Student numbers are set to continue to rise in coming years especially in London which has the most students of any city in Europe and the most international students of any city in the world**. Other cities with large student populations include Manchester, Leeds and Sheffield. Minimal voids tenanted for almost all of the year and you typically know seven months in advance that your property is tenanted for the next academic year due to pre-lettings. Hassle-free investment private halls are managed by on-site management teams who will handle all bills and ground rent, meaning you only have two outgoings: mortgage and management fee. Rental income has increased by 5% each year for the past six years in the student accommodation property sector. In 2009, many schemes actually achieved 10% gross rental increases. Student property has continued to be one of the most resilient investment sectors in the UK during the economic downturn, with most rental incomes and property values remaining stable or increasing. New-build properties available - houses and/or flats, as well as refurbished houses. Exit strategies although we recommend student accommodation as long-term income investment, long-term provable high income on a property makes a property much more saleable. Standard apartments near to university campuses can be sold for traditional residential purposes. All of this helps to reduce the risk to the investor!

**Source: King Sturge UK Student Accommodation Report 2010

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F(&=+;#'%>!@%.GA;(4>!H32,'8%#'&! As discussed earlier in this paper, UK residential property in popular locations has historically been a good source of Accelerator properties, producing excellent returns on capital invested. With todays reduced prices and booming rents, high rental yields can also be achieved from this type of investment and yet the potential for capital growth over the medium to long term remains due to the recent setback to house-building capacity in the UK. Long-term capital gains can be achieved while the rental income covers mortgage costs and on-going management and maintenance costs. A great example of discounted property we have sourced for our clients this year is a new-build development in a popular suburb of East London. To meet their quarterly targets, the developers agreed to release a selection of the apartments at a discounted rate, which we sold to our clients on an individual basis. This method is often preferred by developers, as selling to a bulk purchaser effectively puts all their eggs in one basket. If the sale falls through, they are back to square one. By selling to individuals (in this case our investors), the potential damage caused by a lost sale is reduced. We marketed the properties discretely to our investors, meaning prices for the development as a whole were not undermined as the discounts given were strictly off market. Actual selling prices for one-bedroom apartments at the time were 147,000 and above, with white goods and flooring included. We were able to sell the same units for 125,000 (therefore avoiding the stamp duty threshold), giving our investors discounts of over 22,000. We knew that this was a good deal after researching the local market. Similar properties in the area were on the market for between 145,000 and 175,000 and previous sold prices backed up these valuations. As the development is of high quality, in a much sought-after location, rental demand is very strong, meaning the apartments gave gross yields of over 8.1% and net yields of over 7.2% superb for high-quality new-build property in London. Based on financing at 65% loan to value, these properties were cash positive by over 5,000 per annum after mortgage costs, service charge and ground rent. High rental demand meant all the units we sold were let within 5 days of completion. Our investors on this development now own high-yielding property with excellent potential for future capital growth. This type of property is set to produce large rewards for investors over the coming years as access to affordable finance becomes more readily available and, in turn, demand rises.

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Assetz is a group of well-known and very successful property investment advisers offering selected UK and overseas investment property. In the UK, we offer specialist services for the private property investor marketplace by sourcing and negotiating prices on the best buy-to-let and commercial property. Overseas, we specialise in sourcing superb holiday-homes and investment property in a number of countries, carefully chosen for their location and their potential rental income and capital growth, and to facilitate the purchase, we offer smart financial solutions and ongoing care. With the expertise of Assetz, your purchase and investment will be secure whether you are seeking a property investment, a holiday-home, or both. Assetz for Investors is the leading supplier of UK high yield investment property for private investors and is also one of the top property investment advisers in the UK, delivering selected buy-to-let and student investment property to both small and high net worth private investors. We also offer property-friendly SIPP investments and help investors design balanced TM portfolios using the award-winning MyPortfolio software. Assetz International is a leading international property agent offering the best overseas investment property, specialising in France (including leaseback property as well as holiday homes), USA, Cape Verde, Turkey and Ski property amongst others. Our dedicated, multilingual teams provide quality property selection and a superb after-sales service, whether you are an investor or a holiday-home buyer. Assetz Finance provides UK buy-to-let funding, bridging finance, commercial property mortgages, residential mortgages, secured loans and overseas mortgages in France, Spain and Portugal at the most competitive rates. We also offer equity-release loans to draw equity out of your UK property for the purchase of further UK or overseas property. Our development finance division sources and provides mezzanine and equity finance for property development projects. Assetz Wealth Whether you need to invest for income or for growth or both, we develop a personalised investment plan to suit your needs. We help you prepare for a wide range of situations: retirement, the sale of your business and succession. We develop a plan that protects your assets, your business income and your property portfolio income. Assetz Homes helps homebuyers, and first-time buyers in particular, to find properties and raise the necessary finance to buy. Using its existing contacts and strong reputation in the world of property, Assetz is able to negotiate price discounts and incentives on behalf of their customers. Users registered with Assetz Homes can also receive advance notice of properties coming up for sale in their preferred areas, and attend regular free workshops to learn about mortgage finance, interest rates, insurance and shared ownership/equity.

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Summary
Unique property portfolio planning system designed by and exclusive to Assetz that helps investors achieve a significant income from property, in a time-frame that suits their plans Nethouseprices free service provides you with the latest sold property prices recorded at the Land Registry Property listings site perfect for finding price and rental comparisons Property listings site perfect for finding price and rental comparisons Property listings site perfect for finding price and rental comparisons UK investment property, advice, market updates and education

www.nethouseprices.com

www.rightmove.co.uk www.findaproperty.com www.zoopla.co.uk

Assetz for Investors http://investors.assetz.co.uk/

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Assetz Finance http://finance.assetz.co.uk/

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