Brexit-Proof Your Property Portfolio

What is Brexit proof? In fact, what is Brexit going to deliver? To be honest there is so much confusion around this and the shambles being made of it that people are beginning to switch off. All that aside, there are still serious concerns out there and people are rightly worried, and as such are not sure what they should invest in for their future, right now.

Do I wait? Do I move forward, what do I do? It is our task to help you navigate these difficult times so we will now present our argument why property in the markets we operate in offer both value and security in a market riven with doubt. How to choose the right property investment? The timing of investing? The simple answer to these questions is no one knows, so what you have to decide is, what I am being offered, is it what I have been looking for. If it is then the answer should be why wait? In this study we have selected a property in Liverpool that we consider to be Brexit proof and offers returns that to date we have never been able to match! Introducing, The Block.

What Return Does the Property Offer?​

In short, you should set a figure and use that as a yardstick to measure the investment by. By that I mean set a realistic figure for your returns and if the product you are investing in attains that then that is enough. Obviously, there are other considerations, like how secure is the investment etc. but for the purpose of this let’s just say that we are only picking investments that offer solid returns and are very secure. This will allow us to explore what options are best whilst at the same time comparing like for like in terms of risk. In this case, we are suggesting that returns north of 5% net are very respectable in a market where the interest rate sits 0.75%. In the case of The Block, we are witnessing returns of 10% net! Not only is a return of this magnitude good it is also very secure, as the property is already built and is currently operating under a model delivering these returns.

Is the Price Right?

In this case, the location of the property is ideal, and as we all know location is everything and will be the driver of value. This particular property is located on the waterfront in central Liverpool adjacent to the M&S Arena. Presently it operates as serviced apartments, offering clients the ability to stay in central Liverpool in the comfort of a large 2-bed apartment in a home from home environment. This has proved very popular and has led to a demand that has seen 80% occupancy rates and returns north of 10% Net for the last few years. Is the price right? We believe that property located in that area offering all that they do, with the views that they have and the flexibility they offer then yes the price is right. With the average price of a 2-bed in the property sat at £205,000, in our view the price is right!

Is the Timing Right?​

As mentioned earlier if the figures you are looking to attain are matched then the timing is right. What if I can buy it cheaper if I wait? Well, the answer to this is the property is unique. Location/returns/delivery. The location is second to none, the returns speak for themselves and the delivery is perfect as a hands-off investment with every aspect of the rental catered for by the existing team. So, in terms of timing, the opportunity to buy this property is now, and all you will achieve by waiting is missing out on this opportunity.

What Guarantees Do I Have That This Property Will Continue to Offer Great Returns?

​Like everything in life, there are no guarantees, except perhaps death and taxes. In this case, all we can offer is the reassurance that the location of this property and what it offers clients that use it will not change. To that end, we believe this will continue to deliver market-beating returns for many years to come, even when interest rates do start to move higher. Where can you achieve returns of 10% plus with a risk profile this low?

What Alternatives Are out There That Offer Returns That Match?

To get straight to the point I don’t believe there is anything that comes close. In the property market, the only product that hits big numbers like this are HMO’s, and as you may or may not know HMO’s are not for the faint hearted, they are notoriously tricky and tend to operate in a market sector that many would rather not operate in. Outside of this, there are PBSA type investments that get close, but cannot match, and come with disadvantages that this property does not. In other areas like Bonds, the stock market and other investments, double-digit returns are difficult to achieve at present, and in our view will struggle to get close for many years to come.

What Does the Future Have to Offer?

As already discussed this development will continue to operate as it does presently and we do not envisage any divergence from the present model that offers the returns mentioned. Obviously, there is flexibility as you can live in these properties as an owner-occupier, you can also offer the property out on a standard AST, but it is our belief that most of our clients/buyers will continue to enjoy the benefits that the property presently offers owners and will have no interest in changing what this model delivers in ‘spades,’ market-beating returns!

For more information about The Block or any of our developments, call one of our Senior Brokers on 0207 183 0646 and let us help you today.

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