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9th July 2007Buy to let exclusive: What makes a good property investment?
The buy to let market is flooded with a plethora of different property companies offering a multitude of investment opportunities. Nick Hopkinson of Fruitful Property Investment explains what to look out for...
www.Landlordexpert.co.uk the official website for “The Landlord Association” interviewed Nick Hopkinson, Sales Director of Fruitful Property Investment in July 2007.
LandlordExpert:
What are your thoughts about the current property investment industry?
Nick Hopkinson, Fruitful:
The British media and people have an obsession with property that generally has little to do with sound financial decision making, property investment or intelligent money making strategies. You only have to read below the newspaper headlines or calculate the real finances of all those TV amateur “property developers” to know that it is more of a national hobby to talk about property and investing in the same breath than any properly understood business for most people.
Property investment should be viewed as a long term, 10 – 15 year investment. At Fruitful Property, we believe that successful property investing is all about “time in” the market rather than “timing”. If you try to make money by guessing and trading when the peaks and troughs of the market are going to happen you are almost certain to be wrong! But, if you do your research carefully, budget properly and take a long term view you can make significant returns in certain areas of the UK with minimal risk. Fruitful Property focus mainly on key areas of London and the South East market where we believe you will get above average capital growth over the next decade and beyond.
International property investment is viewed as very “sexy” at the moment with fast growth being reported in some markets over the last few years. Investors can easily get sold on the apparent glamour of this option and fail to take an objective view. There are many legal, currency and potential management risks unique to investing abroad that most people really don’t understand or plan for. Also, it is much harder to get efficient gearing (i.e. using a bank loan or someone else’s money) to finance International property.
The real capital growth in property long term is made by combining the following four principles:
- Maximum gearing
- Future “hot spot” sourcing
- Compound capital growth
- Risk mitigation
Now! is always a great time to invest if you take this approach; this is what Fruitful’s landlords are doing.
LandlordExpert:
What are the biggest mistakes investors make when buying from shoddy investment companies?
Nick Hopkinson, Fruitful:
The biggest mistakes that novice investors make include being seduced by clever marketing and what appear to be “free route to riches” type deals, “no money down” or initial “rent guarantee” type offers. Experienced investors know that these deals are rarely going to deliver the best returns in the long term; or often even short term once you’re committed!
Other classic mistakes include failing to budget properly for post-completion costs; any professional agent will go through these with you and help you plan for the whole investment cycle in advance. There is also no excuse for not carrying out your own due-diligence as it’s very easy these days with the internet. Just because the property is in a Northern “re-generation” area and is very cheap does not necessarily make it a good investment. What are the macro and micro-economic trends? What are the housing supply/ demand situation and local population forecast?
Another common mistake is to get emotionally involved in the deal by buying on the basis of your personal tastes and whether you would like to live or holiday in a particular country, area or property in future. Are you making a purchase to show off at dinner parties or to make capital growth for your future? Fruitful is focused on maximum capital growth and leaves ego or lifestyle based investments to others.
LandlordExpert:
How are Fruitful different? What makes Fruitful unique?
Nick Hopkinson, Fruitful:
Fruitful Property’s mission is to be first choice capital growth investment provider to income rich, time poor professionals to supplement their pensions or achieve their financial freedom plans.
Fruitful focus on the off-plan property market mainly within strategic areas of London and the South East, aiming to deliver market beating capital growth with minimal hassle. We offer a full investment service including market research, legals, mortgages, lettings and property management for our busy professional clients. Our clients all earn £50k+ pounds and have £30k+ pounds to invest. We meet all our clients, one to one in our central London offices, before they invest in our properties to develop a tailored strategy to meet their objectives and ensure they fully understand all the risks. As a result, our clients are knowledgeable and very reliable once committed to a property deal. Fruitful Property will be sourcing over £100 million of investment property this fiscal year and aim to generate over £20 million of equity for our clients over this period. These factors combine to give Fruitful Property buying power to negotiate exclusive investments at substantial discounts to market prices within our target area of London and South East England.
LandlordExpert:
Why did you start Fruitful in the first place?
Nick Hopkinson, Fruitful:
The team behind Fruitful Property, led by Jonathan Caplan, MD, Nick Hopkinson, Sales Director and Craig Mclean, Customer Service Director has been working with our 600+ private and corporate clients together since 2002. Initially we recognised a need for busy professionals to supplement their pensions or financial freedom plans with quality investments and service. Using our combined property industry knowledge, financial analytics skills and negotiating expertise we have been delivering 100%+ capital returns immediately and much more for our investors over the longer term.
The company was re-branded Fruitful Property Investment in July 2006 to better reflect our focus on delivering exclusive, market beating capital growth investment property to our income rich, time poor clients. We now secure even better deals by legally underwriting our purchases with developers. We have also added letting and property management services in the last year to enable our busy clients to become Landlords and benefit from capital growth more efficiently. Fruitful (pronounced In-Key-Toe) is Latin for: to excite, spur, inspire, increase, hasten and grow. Our name and blue logo with the green “growth arc” reflect our mission and vision.
LandlordExpert:
What is Fruitful’s 10 year outlook for property investment?
Nick Hopkinson, Fruitful:
At Fruitful Property, we believe that successful property investing is all about “time in” the market rather than “timing”. A 10+ year view is a fundamental part of our client’s strategy. Also, the real capital growth in property long term is made by combining the following four principles:
- Maximum gearing – using negotiated discounts to achieve 80% loans with only 5-10% of your own funds invested.
- Future “hot spot” sourcing – researching the best locations based on long term factors. We focus our sourcing mainly on key areas within London and the South East where demand exceeds supply long term.
- Compound capital growth – getting growth on the whole value of the property, not just your investment funds.
- Risk mitigation – understanding and budgeting for all the legal, financial and future risks.
Fruitful investment Landlords are able to focus on their busy lives with confidence that their money is working hard and they are getting investment returns of 100%+ on day one through their properties and much, much more over the next decade… 1,000%+ returns are realistic, even if the property market only grows by 7% a year!
LandlordExpert:
What makes a good property investment?
Nick Hopkinson, Fruitful:
Fruitful Property recently launched a new investment opportunity in Ebbsfleet, Kent. This deal meets all four of our key principles (outlined above) for an exciting investment opportunity.
The key facts are:
- 2 bed apartments available from £229k with a 15% discount off current market price for investors.
- Only 10% deposit required on exchange.
- Short walk (within half a mile) to high-speed, channel tunnel rail link International station at Ebbsfleet scheduled to open November 2007.
- 15 minutes from Central London on this new high-speed rail link from 2009 – driving strong rent demand and capital growth over the next few years.
For more details about current opportunities contact Fruitful Property Investment on 020 7409 1055 or go to www.fruitfulproperty.com