Creating Wealth and Pensions with property

The concept programme this grew from, was looking specifically the different ways people could provide for a pension,  retirement is a major part of life and with people living longer has become a major section in time of the ere overall life span. Some may be in business or have a role that they say they will never retire from but in reality everyone does retire its just at different points and to different degrees. We all have to pass on responsibility to the next generation, to encourage and empower them to continue from the point we have worked to, perhaps as partners, perhaps slowly over time moving into the driving seat, and perhaps calling back over time our own direct involvement.

Some may have the chance to retire from their career, and then in the early years of retirement to take on directorships or partnerships in joint ventures that allow them to utilize their life experience and to participate in new challenges but on a part time basis, others may develop new hobbies or new interests. Perhaps one of the most wasteful parts of modern society is the little use we make of the experience and ability of our ender citizens. 

Retirement should be more than the waiting room for the end of life, it should be the opportunity to take on new challenges, perhaps in part to do the things that we always would like to have done and in some cases to make our mark on the world by helping some project that will live on as our beacon when we are no longer here.

Opportunities now through the New Atlantis family are about far more than just accumulating a pot of gold for digging into in later life, its about opportunity empowerment, consortiums where experience can be shared and projects where people cam make a real difference.  This page however is all about property and pensions, so perhaps we should concentrate on this aspect.

While money does not make people happy, removing the worry about the shortages of it does allow them to enjoy life more.

Creating wealth is not all that difficult using property and even if you get it wrong you usually just make less than you could have.

Profit can come from:-

Buy to let 

You buy a property on a mortgage, rent it out at a rate that more than cover the mortgage. Property prices rise, and you re-mortgage releasing equity as cash to buy more property. This works so well as usually the amount of your own cash you have invested is a small percentage, say 15%, so when the property goes up by 30%, not difficult to achieve, by clever buying, your stake has become three times what you invested. By doing this a number of times and allowing each property to go on appreciating, people get to own very large numbers of houses, in some cases even more than 100.  Tax is not payable on the increased values, unless you sell the property which you never need to do. You can combine this with the other options below to make it happen faster.

 Self build or build to let

Property that you build, is available to you at around a 40% saving over market prices for property. You can live in it while you build the next, moving from one to the next and releasing these sizable profits as cash, grading up to a larger mortgage free home, all tax free, or you can rent some out.

The secrets of achieving this at maximum profit is in finding plots, negotiating and in project management, defining your requirements well can save a lot as can avoiding too many changes mid build. Plots that are ideal and at a good price can be difficult to find by the individual, but working with a club and matching with others, so as to use larger sites, and compete with developers rather than none self builders, who often pay well over the odds, makes this viable and very profitable. 

There is very little difference in time on average for an investor to become involved in a new build compared to messing about in buying chains, and time spend in legal work etc. Stamp duty is also only payable on the plot, as opposed to the full house rice as in a purchase.

Using this for Build to let is particularly attractive as you can fund the whole exercise with very little capital and end up with all of your cash back and a profit, all without the property in the area going up at all. This all means that you can grow your build to let empire faster, with less initial cash and no risk.

Property renovation or repairs

Property that is below par often is obtainable and repairable at less than the cost of a comparable house done up. The secret is in understanding the full costs and good buying, seeing potential and good projects management. There is a far greater risk than with new builds, as there is likely to be more unknown costs or problems and the margin can be far smaller or disappear. Older renovated property will be more expensive to maintain than new builds. However you don't need the same degree of help, and maybe able to spot a bargain. It has become more difficult to achieve good margins in reasonable time now that so many programmers on TV have focused on this and even houses sold at auction needing a lot of work have more than doubled in cost. The biggest problem is that it looks easier than it is, as opposed to new builds that look harder then it is.

Land buying/plot development

For new homes to be built by self builders, plots are required.  A plot is a piece of land with planning consent, but more valuable if it has access, services, and similar in place. This is really only of great interest in Britain where plots are in short supply and prices very high. A piece of farm land changes from being worth around £3,000 an acre to over a million pounds an acre as plots. In between these extremes there is scope for a variety of deals, and often enhancing the value by putting in roads and services.

Planning approval is only for a period, and therefore it is unwise to just price stupidly high and wait for prices to go up to that level. As the time untill it running out gets shorter you are in more desperate need to sell and generally the value drops, as there is no longer as much time for a buyer to get modifications to planning etc. 

Buying internationally

Property in other areas of your country or other countries can look very cheap on occasions, but this is because you are looking and comparing it with your area and not the local area it is within. Money can be made by good timing, understanding when prices are about to move, and by using property differently, for example renovating and letting it out to people in your country for vacations. In this way you buy cheap and let it out at a price comparable to your area, not the area it is in. You need to avoid areas that everyone else has saturated or you may just find it difficulty to rent it out at all. Good buying is the key, and understanding areas that could be suitable, looking for multiple seasons ie sun and snow. Avoid Spain completely (land grab laws) and don't renovate in Italy (planning nightmare). You need to learn the language well before setting out on this route or stick to English speaking countries.

You can retire to some countries, taking pensions etc with you, therefore selling your expensive property and buying a better cheaper one.

Help available

As you might expect by now we have a range of help available through clubs and projects.

Property Pension Club  can help with Buy to let, overseas purchases, and far more. the web site contains a lot of information www.property-pension-club.co.uk

Self Build Homes Club assists in understanding new builds, deciding what you want to do and help you find a plot. It also has a club trade card to get you trade prices on purchases. main international website at www.selfbuildhomesclub.com with links to local country sites. The UK web site is very large with loads of information and at www.self-build-homes-club.co.uk  and a smaller media response site is at www.self-build.org.uk 

Affordable Homes Project a projects that coordinates the provision of affordable homes, land deals at lower prices and ranges of information. Also coordinates or works with joint venture projects with developers, self builders, clubs and others. www.affordable-homes-project.co.uk 

Property Club International (PCI) looks at getting people together to work on cooperate projects, joint venture consortiums offer people the chance to become involved in running the clubs and organizations to do the above and other areas, but they also have specific consortiums concentrating on property projects, buy to let, and plans to promote consortiums to get involved in commercial property and even consortium's to own and run hotels. take a look at what is available now and revisited their site regularly to see what has come up, as some projects may come and be taken up very quickly. www.property-club.org  PCI does not produce these packages, these are done by others and is often a long job, for example a consortium to develop an international property letting business with wide property ownership, took several years to research, 2 properties were bought about 18 months ago, and some work done on websites etc and its still not ready to offer as we write this.

For land plot developments. We do have arrangement to help on this area, but the best starting point is to talk to the Self Build Homes Club who will be able to work with you as a member and help you put together deals to both acquire land and sell plots or as a joint venture partner to help you market the plots you do have as it does other developers. 

For overseas investments see the property pension club site as this covers this topic directly and the self build homes club, where we have different countries sites and overseas property also shown on some such as the UK site. Coming 2005/2006 Holiday Property Club company set up, web sites written waiting to go live when resources are available. See any of the sites above for links to this when it becomes live.

If property prices fall. They don't in the longer term, its just what those who want to sell risky share and stock based saving schemes try to tell us.  But if they should, then buy to let investors can sit tight until prices recover, they still have the rental income. Self builders have such large margin hat they are guaranteed to make a profit anyway. The only real risk is in renovation, where you might be forced to sell at a loss, if you could not afford to rent for a period.

More countries coming on line for Self Build Homes Club. Property Club International is putting in a franchise scheme to allow far faster word wide growth.

Holiday Property Club company set up, web sites written waiting to go live when resources are available

Property project in developing countries.

Plot projects, a hotel project and a number o buy to let syndicates are all being worked on

Sheltered housing for the elderly is being investigated to give them independence but also help nearby.

More still to identify and get involved in.

UK House prices subscript

In the media we always get predictions of a house price crash, even suggestion that it has happened or is happening. 

In practice what we have is stabilization, property prices ran away, partly fuelled by the growth in buy to let, and partly by the failure of other investment means to be reliable, added top this some other funds have become more involved in property and new forms of unit type investments have come about that concentrate on property investment.

There is still far more money looking to invest in property in the UK than property available, but most of these very large funds are principally interested in commercial property where fewer investments need to be made and value is mostly based on the rental revenue it produces. In the future some of these funds will have to look at projects involving larger volume housing property management.

The Property Pension Club predicted some time ago a stabilization in 2005, partly due to the extreme rises before but also due to a rule in the tax, where it became beneficial if you had buy to let property for more than so many years to sell and replace it, and these arrangements came into effect at this time and all property before we certain point would could be considered to worth recycling through the books in this year. This bubble will pass of course.

So what is happening to property prices, el in bull and bear times, the price a property sells for is usually an accepted offer rather than the asking price, and maybe the sellers had predicted continuing growth over period of stabilization so perhaps the asking prices are being inflated. There is very little evidence of lower cost for those buying homes, in concept if prices were to fall then more people would be able to afford to buy and these extra sales would push the price up again. 

So what about the statistics. Well they are not as helpful s some may think. part of the reason for this is that the change of the mix of homes that sell changes depending upon the perceived condition of the housing market, security and other factors. I am not talking about the size of homes but the price bands of homes that are entering the market and being bought. Basically those who are better off and have nice homes are less inclined to move when things are less certain, this does not mean their homes are worth less its just that if they are not confident they tend to stay put. As the number of lower cost homes is no effected to the same degree, the average price of homes can appear to be falling when the majority of people looking for a home are finding no cheaper homes at all and some still going up  quite fast. The other factor is that often prices are compared with the same month or quarter a year ago, and this again can be quite misleading, as a year ago you could have had a sudden burst of activity, so now the volume of sales is said to be falling when it is still above the average over a number of years. I am not suggesting we should disregard statistics that we don't like, but that we need to look more closely at what they are actually telling us. This same warning should apply when prices appear to be increasing, are they overall or it just that those who were a little nervous and had large homes are now starting to move again.