There are hundreds of different ways of investing in property but which ones make the most sense over the long-term? Today Rory O'Mara from Closed Bridging Finance looks at the investment strategies that he feels have the best returns including buy-refurbish-sell (or hold), self-contained units, office-to-resi conversions.
Property Expert Series: Rory O'Mara from Closed Bridging Finance
- Part 1: Introducing Rory O'Mara from Closed Bridging Finance
- Part 2: What is Bridging Finance?
- Part 3: What is Development Finance?
- Part 4: Is Bridging Finance Only Suitable for Expert Investors?
- Part 5: Debt Finance Vs. Equity Finance - Which is Better for Property?
- Part 6: What Kind of Property Can Be Bought With a Bridging Loan?
- Part 7: Debt Financing - The Cost of Using a Bridging Loan
- Part 8: What Does the Future Hold for Bridging Finance?
- Part 9: How to Use Bridging Finance to Grow a Property Portfolio Quickly
- Part 10: What Problems do Property Investors Face in 2018?
- Part 11: Which Property Strategies Offer the Best Long-Term Potential?
- Part 12: How Can a High Net Worth Individual Invest in Short-Term Finance?
- Part 13: What is an SPV and Why are They Used by Property Developers?
- Part 14: The Highs and Lows of Working in Bridging Finance
Amy: What property strategies do you see having the most long-term potential?
Rory: There are probably 101 key strategies. So, how do we cut that down to something nice and simple to manage, for most investors?
So, good, old-fashioned... Ideally, you want to be buying below market value, where there is demand, there always has to be demand.
Buy-Refubish-Refinance and Buy-Refurbish-Keep
Rory: So, buy, refurbished and flip for cash. So, that's a way of generating chunks of money and that would be, I guess, traditional houses or flats.
Or, actually, same again, you buy, you refurbish and you refinance, so you can hold. And the goal would be to leave the least amount of money as possible in the project when you have refinanced.
And then we come back to the figure that we talked about earlier. What's your return-on-cash? Can you get, in my world, hopefully, a 10% return on your money? You may be happy with 5%.
Rory: The area where I see growth... We also talked about the risks with HMOs and possible council tax banding. So, the workaround there would be to create posh bedsits, self-contained units.
So, actually, the landlord is not liable for any of the utilities and they are not liable for Council Tax.
You may not make as much if you have the best... And when I say 'bedsit', it's a self-contained unit. It's a studio. It's a micro-apartment.
I know there's been a lot of success. There's a chap, called Martin Skinner, in London, who's done this really, really successfully in Croydon. I'm sure the same in North East, the North West and the Midlands. So, I see that as being a really, big growth area.
Office To Resi Conversions
Rory: Office-to-resi conversions. Still, I know a lot of investors. One of the questions I raise there is..? Actually, if we convert where we are today. There are carparks have been turned into residential homes. What happens in 5 to 10 years from now when all of these flats have occupants, who need jobs, needing more office space?
So, I would be looking 5 or 10 years ahead thinking, is there an opportunity for office space? So, I'm not saying next year but you asked me about the long-term.
Rory: The other one would be looking at niche markets. So, it might be kids who are in care, can you help and go through that transition period? I experienced that myself when I was younger. So, you are 17, 18 years of age, you've been in some form of institution or with a foster family and now you have got to go live in the big, bad world. And are there ways of being able to create accommodation that suits those needs.
So, I've always been a big fan of being a niche player.
So, those are some of the ones that I would be focussing on.
Amy: Thank you.
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