Podcast Summary
Investing in city center new builds with guaranteed yields: Proceed with caution: Approach city center new builds with guaranteed yields with caution, consider investing with a higher deposit for protection, and maximize leverage with a smaller down payment. Thorough research is crucial.
While investor-only new build properties in city centers with guaranteed yields may seem appealing, it's essential to be cautious. These developments often require higher deposits, and investing with just 10% down can help protect your investment and maximize leverage. The concept of leverage means controlling an asset with only a small portion of the total cost. If this is unfamiliar, consider taking a course on off-plan investment available on their website for further explanation. Overall, it's crucial to approach such investments with careful consideration and thorough research.
Large deposits in property investments: Risks and potential pitfalls: Be cautious when investing large deposits in property, as they don't guarantee deposit protection and may lead to unmortgageable properties, limiting mortgage options.
Investing in property with large deposits, often marketed exclusively to investors, comes with risks. While a larger deposit may increase the chances of deposit protection, it does not guarantee it. Moreover, such investments can mean higher commissions for sellers and help fund the development. However, if the development is overtly marketed to investors, it may become unmortgageable, leaving investors with a large deposit and no mortgage options. It's essential to be skeptical of investments promising guaranteed returns and be aware of the potential risks associated with large deposit investments.
Working with the right broker for property investment: Find a knowledgeable broker for property investment, consider exposure limits, and understand investor-led developments. Also, consider the implications of using a Lifetime ISA for property investment, but seek professional advice before making decisions.
When working with a lender for property investment, it's crucial to find a knowledgeable and experienced broker. Lenders have exposure limits, meaning they can only lend on a certain proportion of units in any one development. Additionally, not all developments are investor-led, and working with a broker who understands these nuances and has experience in city center deals is essential. Another important consideration is the use of a Lifetime ISA (LISA) for first-time buyers. The coronavirus pandemic has temporarily waived the penalty for withdrawing funds, but there's uncertainty about what happens when selling a house bought using a LISA. If the government takes a cut of the growth, as they do with Help to Buy schemes, it might be more financially advantageous to remove the funds and place them in a regular savings account. It's important to note that this information is not definitive, and more clarity is needed from the government regarding the implications of selling a property bought with a LISA. Consulting a financial advisor or tax professional would be wise before making any decisions. In summary, working with an experienced broker and carefully considering the implications of using a Lifetime ISA for property investment are essential for a successful investment.
8 words: Government-backed savings scheme with bonus: The Lifetime ISA is a savings account where the government adds a 25% bonus for every £4,000 saved, which can be used for buying a first home or retirement.
A Lifetime ISA (ISA stands for Individual Savings Account) is a government-backed savings scheme designed to help people save for retirement or their first home. The key feature of this ISA is that for every £4,000 you save, the government adds a 25% bonus, effectively giving you free money. There are no strings attached to this bonus, and it can be used to buy your first home or withdrawn when you reach retirement age. Unlike some other government schemes, such as Help to Buy, any growth in the value of the funds is yours to keep once the home has been purchased. To summarize, the Lifetime ISA is a great way to save for a significant financial goal, and the government's bonus makes it an attractive option for those looking to buy their first home or save for retirement.
