Welcome back!
Now may be just the right time to invest in property, either by home buying as Cash House Buyers or by investing in a home buying or analogous property company that has a watertight survival plan to take it through the Economic Situation
It’s ironic that falling property prices have at least partly led to the present Economic Situation. This is in turn creating a crisis in confidence amongst Bank Shareholders, because they know that if they hang on to those shares too long when others flee, the share value will inevitably dip below the critical value which renders the bank’s capital inadequate for loans and deposits on its books.
At this time a rescue solution has to be put in place, and that means either nationalisation or takeover by a competitor. At this point the unfortunate shareholders have lost all bargaining rights. The rescue has to go forward, and the government or the purchasing Bank can’t pay more than the then current distress value of the shares.
So, where can you securely place your hard earned money to work for you in these troubled times?
Well providing you make sure you have more than enough ready cash to get you through anything the next two years can throw at you; why not use some of the remainder in becoming or investing in home buying either as Cash House Buyers or by investing in a home buying or analogous property company that has a positive survival plan to take it through the Economic Situation
If this sounds like insanity, think about this; in the UK, just to keep the Market stable over the next 10 years; three million new homes will be required. At the present rate of building, we’re unlikely to see more than a third of those put up. This shows that the medium and long term prospects are excellent for investing in property, because it’s much more probable that demand will outstrip supply than the reverse happening.
Cash House Buyers and Home Buying Companies typically buy houses at 80% of market value, because the sellers are more than happy merely to find somebody to “sell my house”. This ensures that they have a reasonable margin to pay for all their own costs, insulate them from the market falling a few more percent in the short time they own the property, and allowing a discount to make the sale happen quickly.
If you don’t fancy the Cash House Buyers role for yourself; you’ll see lots of good opportunities appearing to invest in Home Buying Companies. Many Home Buying Companies have used loans to allow them to maximise their property portfolio, and so hugely improve their Return On Capital Employed. Now they need to reduce borrowings, and they require an injection of cash to do that and to ensure they can service their remaining debts until the market stabilises and begins to grow again.
If you’re thinking about such a move for your money; do all the due diligence, and especially make sure that your investment will be enough to ensure the company’s survival, and will give you enough of a voice to make sure that it does just that.