Why invest in property?

With rising interest rates and the prospect of a slower market during 2007 we go back to basics and remind ourselves why property is the best investment there is.

There are lots of ways to make money and some people would argue that property investing isn't really that easy. They complain that it takes time to develop the knowledge to understand the property market. It can take months to research areas and find the right investment property. Then when you've found it, you need to negotiate to get it at a favourable price, negotiate a loan, instruct a good solicitor...

Is this all starting to sound too complicated? You are not alone that's the very reason some people ignore property and choose to simply park their money in shares or managed funds. But the simple fact that property millionaires out number any other shows us that property investment really is well worth the effort.

A good investment has two elements:
1. High capital growth, which allows us to grow our net worth quickly, and
2. Secure income, which increases over time.

This is why residential property must be key to your wealth-building program. Let's look at the reasons to invest in property in more detail.....

1. More Millionaires
Quite simply, property millionaires outnumber those of any other investment class. Those that haven't made their money directly from property generally invest in it indirectly. Remember, there's nothing wrong with seeing what successful people do and applying those principles to your own life. If the majority of extraordinarily wealthy people have used property profitably, it stands to reason that there's money to be made in this sector.

2. Anyone Can Do It
Property investment is not just for the wealthy. It doesn't really take large sums of money to get involved in real estate. This is because banks will lend up to 95% and sometimes even 100% against the security of residential property, which means that most people with a steady job and a little capital behind them can afford to buy investment properties.

3. Security
Banks have always recognised property, and especially residential property, as an excellent security. The reason they'll lend you up to 90% of the value of your property is that they know property values have never fallen over the long term.

Another factor contributing to the security of property investment is that of the percentage of owner-occupiers, that is people owning or paying off their own homes. Owner occupiers outweigh investors by a huge amount, which means that residential property is the only investment market not dominated by investors, and this effectively gives investors a built-in safety net. Even if all the investors were to leave the market at once, it would not totally collapse.

4. Income That Grows
The rental income you receive from your investment property allows you to borrow and get the benefit of leverage by helping you pay the interest on your mortgage. Over the years the rental income received from property investments will increase particularly in times of a slower market such as the current market.

5. Consistent Capital Growth
Residential property has an unequaled track record of producing high and consistent capital growth. Generally speaking, the value of UK residential property doubles every 9 years.

Imagine you own a property portfolio with a value of £1million. Usually you will have some equity or your deposit and you borrow the rest. Imagine you had 10% deposit and borrowed the balance (£900,000) from the bank.
After 9 years you would still owe the bank £900,000 (assuming you had an interest-only loan) but your net worth would have increased from £100,000 to £1.1million. Your net worth has increased over 10 times even though the value of the property has only doubled. You would be a millionaire in just 9 years with an initial investment of just £100,000. Now where else could you achieve that?

6. You Can Buy It With Someone Else's Money
The return you get on property if you pay for your purchase using all cash (without getting a loan) isn't much higher than that that you can achieve with other types of investments.
The important difference is that with property you usually don't pay using raw cash; instead you use someone else's money to buy your properties. That is, you put down a small deposit, often 15%, and the bank finances the rest. This is called leverage.

Archimedes said, "Give me a lever and I'll move the earth." The ability to use leverage with property significantly increases the amount of profit you can make and, importantly, it allows you to purchase a significantly larger investment than you would normally be able to.

Because of its history of security, stable income and proven capital growth, residential property is regarded as a prime security or collateral for loans, which means that banks will often lend you 90% of the value of your property or in some circumstances even more.

7. You Are In Control
Property is a great investment because you make all the decisions and have direct control over the returns from your property. If your property is not producing good returns, then you can add value through refurbishment or renovations or adding furniture to make it more desirable to tenants. In other words, you can directly influence your returns by taking an interest in your property and by understanding and then meeting the needs of prospective tenants.

8. You Can Add Value
There are hundreds of ways you can add vale to your property, which will increase your income and your property's capital value. These include little things like giving it a coat of paint or removing the old carpet and polishing the floorboards underneath. Or you could do major renovations or development works.

9. You Don't Need To Sell It
Unlike most other investments, when property goes up in value you don't need to sell in order to capitalise on that increased value. You simply go back to your bank or mortgage broker and get your lender to increase your loan.

10. Most Forgiving
Even if you bought the worst house at the worst possible time, the chances are good that it would still go up in value over the next few years. History has proven that property is possibly the most forgiving investment asset over time. If you are prepared to hold the property over a number of years, it's almost guaranteed to rise in value.

There's really no other asset class quite like property!

Back to top

Buy to let investors barely affected by rate increases

First-time buyers will feel the pinch if interest rates increase again in the coming months but buy-to-let investors will continue to make their mortgage repayments says research conducted by the Royal Institution of Chartered Surveyors (RICS).

With affordability at the worst levels since 1992, first-time buyers will slip behind in their mortgage repayments to a greater extent than buy-to-let investors who are less at risk.

Buy-to-let investors tend to be older - with over half of all investors aged over 45 - and have larger disposable incomes (and possibly greater access to equity release) compared to first-time buyers who have pushed themselves to the limit to get onto the housing market.

Of the £11.65m mortgages in the UK, 0.96% of them are in arrears. But only 6.6% of all mortgages are buy-to-let and only 0.69% of these mortgages are in arrears - a mere 5,318 in total.

RICS expects that buy-to-let investors will have no difficulty finding tenants at suitable rental rates in the coming quarters as rental demand remains strong in a growing economy. Employment conditions remain firm and rising house prices could force would-be-buyers to rent. Data from the RICS Lettings Survey shows that rents are rising at close to the fastest pace in five years, and tenant demand remains buoyant.


Back to top

"If you make the unconditional commitment to reach your most important goals, if the strength of your decision is sufficient, you will find the way and the power to achieve your goals." - Robert Conklin Teacher, Author and Speaker

"The quality of a person's life is in direct proportion to their commitment to excellence, regardless of their chosen field of endeavor." - Vince Lombardi 1913-1970, Hall of Fame Football Coach

Back to top

Creating opportunity by Jim Rohn

An enterprising person is one who comes across a pile of scrap metal and sees the making of a wonderful sculpture. An enterprising person is one who drives through an old decrepit part of town and sees a new housing development. An enterprising person is one who sees opportunity in all areas of life.

To be enterprising is to keep your eyes open and your mind active. It's to be skilled enough, confident enough, creative enough and disciplined enough to seize opportunities that present themselves... regardless of the economy.

A person with an enterprising attitude says, "Find out what you can before action is taken." Do your homework. Do the research. Be prepared. Be resourceful. Do all you can in preparation of what's to come.

Enterprising people always see the future in the present. Enterprising people always find a way to take advantage of a situation, not be burdened by it. And enterprising people aren't lazy. They don't wait for opportunities to come to them, they go after the opportunities. Enterprise means always finding a way to keep yourself actively working toward your ambition.

Enterprise is two things. The first is creativity. You need creativity to see what's out there and to shape it to your advantage. You need creativity to look at the world a little differently. You need creativity to take a different approach, to be different.

What goes hand-in-hand with the creativity of enterprise is the second requirement: the courage to be creative. You need courage to see things differently, courage to go against the crowd, courage to take a different approach, courage to stand alone if you have to, courage to choose activity over inactivity.

And lastly, being enterprising doesn't just relate to the ability to make money. Being enterprising also means feeling good enough about yourself, having enough self worth to want to seek advantages and opportunities that will make a difference in your future. And by doing so you will increase your confidence, your courage, your creativity and your self-worth . your enterprising nature.

Back to top

"Don't be afraid of the space between your dreams and reality. If you can dream it, you can make it so." - Belva Davis Award-Winning Journalist

"Every achiever that I have ever met says, 'My life turned around when I began to believe in me." - Dr. Robert Schuller Minister and Author

Back to top

Introducing Private Label


In order to achieve wealth through property investment it is essential to build a diverse portfolio containing a range of different properties. It is with this in mind that we have introduced Private Label.

Private Label is aimed at those investors wishing to build a wealth building property portfolio quickly and cost effectively. In fact, Private Label is the most cost effective way of purchasing property through Property for Life with savings in the region of 50% on the usual levels of investment.

Private Label is a full service product which means that you can take full advantage of our company's skill, knowledge and influence within the market place to build you a professional investment portfolio with no prior experience or knowledge.

Quite simply you benefit from substantial savings on the costs of building a property portfolio by making an upfront investment to build your portfolio with PFL, but it doesn't end there. Private Label members will also benefit from a host of other fantastic benefits.

• Savings in the region of 50%


• 48 hour priority notice of newly available property


• Access to password protected web area with special one off property offers


• Dedicated portfolio manager


• Personal strategy consultation with Property for Life MD David Austin


• High quality leather bound membership pack complete with branded pen and other items

Whats available?

We currently have the following investment opportunities.

UK property
Mast Quay, Woolwich, London
Evergreen Mews, Higher Broughton, Salford, Manchester
Smallthorne Place, Swadlincote, Derbyshire


Overseas property
If you are looking for quality overseas property you need look no further. Whether you want discounted French property with guaranteed rental returns, land in central Florida or something a little more exotic we can help. Our overseas property department is growing fast and we are currently offering exceptional opportunities in the following locations:

France . Most regions
Spain . Many regions
Cyprus - Paphos
Florida . Central and Northern
Brazil . North coast
Middle East - Dubai

Please go to www.propertyforlife.com/property/ for full details and look out for more great opportunities coming soon!

Back to top

Upcoming events

Over the coming months we will be running a number of property investment academy sessions as part of our ongoing academy programme. If you would like to attend a property academy session please call Laura on 01252 731045 or email laura@propertyforlife.com stating which session you would like to attend and how many places you require.

Academy Dates
24th February 2007 . Coppid Beech Hotel, Bracknell
17th March 2007 . Central London
7th April 2007 . Kegworth Whitehouse Hotel, East Midlands

For full information go to www.propertyforlife.com/whyinvest/education.html

Back to top

Furniture Services

We can supply a wide range of furniture to cover even the most demanding furnishing requirements. Whether you are looking to furnish a studio apartment or a four bedroom house, our range of ready to go furniture packs provide all you will need to give your property that special look.

Our furniture is carefully sourced by our in house furniture specialist and offers a stress free and very cost effective method of furnishing your investment property. Studies have shown that a well furnished property will not only rent more easily but could also carry a rental premium, giving you an even better return on your investment.

Most items are held in stock and available for immediate dispatch. Delivery can be arranged for most regions of the United Kingdom.

For further information visit www.propertyforlife.com/services/furniture.html or email myra@propertyforlife.com.

Back to top

Do you fancy a spending spree at one of the UK's leading department stores?

The new look Property for Life referral programme can offer you just that.

All you need to do is tell an interested friend about Property for Life and you could soon have a minimum of £250 in gift vouchers to spend in any John Lewis or Waitrose store.

Quite simply, for each person introduced by you who then purchases a property through us you will receive a cool £250 in John Lewis gift vouchers. If they purchase more than one property you will receive £250 in gift vouchers for each property they purchase. You could soon be well on your way to that spending spree.

Remember, the more people you introduce the more chance you have of grabbing at least £250. So why not tell your friends and family about Property for Life? Make sure they register on-line at www.propertyforlife.com/register/ and select the recommendation option at the end of the form and include your name in the 'other' box.

Please note that the referral programme is on a per property not a per person basis.

Back to top