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E2Wealthier – An introduction to property investment

E2Wealthier – An introduction to property investment

Katie.Dix / 30 Sep 2020

E2Wealthier – An introduction to property investment

In last week’s coffee break, our speakers were Alison Edwards and Natalie Beswick from The Insight Group, a property investment company.

It was a fascinating presentation of two halves, starting with the basics of building a property portfolio. Our speakers explained the role of borrowing (known as ‘leverage’) to increase potential returns, the importance of finding ‘discounted’ properties and how the regular use of equity release can generate tax-free cash. This can then be reinvested into further property purchases or used as a source of passive income when the property portfolio has reached the required size.

They also highlighted the costs involved in the process – from their sourcing charge to the usual taxes and fees involved in any property purchase (such as stamp duty, conveyancing and so on) – and explained what’s involved in the monthly cash flow after costs.

They then moved on to the key issue for any property investor right now – the pandemic. At the moment, it is a seller’s market, which is making it difficult for them to find the discounts they normally look for. However, they believe more opportunities may be available soon, though this is for a sad reason, as the ending of the furlough scheme could force many people into a position where they need to sell.

From a management point of view, the ban on evictions has been a challenge, particularly with tenants who were already failing to make payments before the problems started, as they now can’t be moved on. It has also made maintenance harder, as everything around the house was being used more in lockdown, but contractors weren’t available for anything except emergencies. Now they’re back at work, there are lots of demands on their time and limited materials available. It’s likely it will take a while for them to catch up.

Interestingly, lockdown has increased the demand for property investments, perhaps because people are sat at home are wondering what to do with their money, and demand for rentals has also risen. This has been a double-edged sword, though, as it means there’s lots of scope to fill vacant properties, but at the same time, more tenants are handing in their notice. Fortunately, virtual viewings have been better received than expected.

The coffee break closed with an extensive selection of questions getting into the detail of how property investing works.

To watch the full video on catch-up, please click here. And if you’d like to be kept informed about the coffee breaks that we have coming up, subscribe to our weeky news letter at the bottom of our home page.

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