the banks will lend you money against a property,
which is called leveraging. Such leveraging of an
investment lowers your capital outlay, which will
significantly increase your return on investment and
also presents the opportunity to invest into different
markets, building a strong and diversified portfolio.
Once a property has appreciated, investors can then
look to extract equity from that property which they
can then use to reinvest back into another property,
again on a leveraged basis.
Markets such as London offer very attractive
finance rates and LTVs (loan-to-value) of up to 70%
for overseas investors. Leveraging is very appealing
to our investors from the Africa region, both expats
and locals, especially with the cost of finance in the
UK still at historical low levels.
Yield
Look at investing in assets that offer strong yields.
This means investing in property in locations where
there is a strong tenant pool of people who can afford
IP Global’s Top Offshore Investment Tips
1. Understand the legalities of the market you
are investing in.
2. Do your due diligence.
3. Make sure you have easy access to
affordable mortgage finance.
4. Ensure you have a well diversified property
investment portfolio.
5. Invest in liquid markets where you can
exit easily.
6. Understand tenancy and rental yield.
7. Get a handle on taxation and fees.
8. Look for high quality buildings backed by
quality developers.
9. Invest for the medium to long term.
10. Work with partners you can trust with a
proven track record.
to pay a rental that your property needs to achieve in
order to make the yield real. Investing in a stunning
luxury property may appear to be a good decision,
but if the property is not tenanted, it will just cost
you money, making the acquisition a liability, instead
of an asset.
Buy-to-let ROI
A recently released report from a UK f inance
provider underlines just how strong the returns on
UK property investment have been since buy-tolet mortgages were first made available in 1996.
Across those 18 years, buy-to-let properties have
averaged an annual return of 16.3% – that equates to
a startling GBP13,048 for every GBP1,000 invested
since 1996! This shows just how well property is
performing in comparison to other investment
assets, with shares, bonds and bank savings earning
6.8%, 6.5% and 4% annually over the same period.
IP Global’s capital appreciation figures strongly
support this conclusion. Since 2009, our clients have
invested over half a billion pounds in UK property
through our services. An in-house valuation study
on a number of our London developments using
recent resale prices and valuation data demonstrated
that these investors have achieved average leveraged
annual returns of 36.6% per annum at a 65% LTV.
This means that not only is property investment
outperforming in comparison to other investments
assets, but also that IP Global ’s investors are
outperforming the market average by nearly double.
And this good news for buy-to-let investors is
set to continue, with the same report forecasting
that landlords will continue to see average annual
rental growth of 11% over the next decade, as the
limited supply pipeline across the country comes up
against aggressively rising demand in the wake of the
national economic recovery.
RESOURCES
IP Global Ltd
www.reimag.co.za
Offshore Handbook 2014
7