Guest Article from Sarah Walker: The Opportunity of a Lifetime to Profit from Property Investment?

publication date: Apr 14, 2009
author/source: Guest article by Sarah Walker, Platinum Property Partners

Franchises are the businesses that continue to blossom in times of recession, and Platinum Property Partners is an example of one property investment franchise which is not only strengthening, but also enabling its growing number of franchisees how to capitalise on probably the best opportunity they’ll see in their lifetime to acquire property.

Business growth, high cashflow and an appreciating asset base is what most business owners strive for, and for the 12 years or so from the mid-90s, it was fairly easy to achieve that through property, thanks to a rapidly rising market and no shortage of companies promising that with no money, no experience and no effort, the novice investor could get rich.  Some did make money - primarily by getting out while the market was still rising - but far too many people have been left with portfolios they have to subsidise, huge negative equity and many have been forced into bankruptcy.

The resulting negative publicity in the media over the last nine months has made most people believe property should be avoided at all costs in the current market but, provided you know what you’re doing, quite the reverse is true.  PPP is sending the message to all their Franchise Partners (franchisees) and passive investors that 2009 is going to be the year for making record profits.

A property franchise differs from most other franchises because property is a constantly shifting market, and the 'best’ business strategy ie. the franchise ‘product’ – has to change along with it.  In addition, every Franchise Partner has slightly different short, medium and long-term financial goals.  The huge benefit of working with such experienced Franchisors, like PPP, is that they are able to predict trends and opportunities, can quickly adapt and roll out updated best practice, and are able to offer their Franchise Partners a variety of investment strategies.

With property prices set to continue falling for the next 12 months or so, there has never been a better time to negotiate significant discounts on property all across the UK.  While the media storm about negative equity and further falls to come is still crashing around, professional portfolio investors are quietly getting on with making hay.  The smart investors realise that the time to buy is while prices are dropping and the headlines are at their most negative, because if homeowners believe the value of their house is still going down and have no idea when it’ll reach the bottom of the downward spiral, those who have to sell will be keen to do so as quickly as possible.  If an investor can offer them a quick way out and bring an end to the stress of worrying about not being able to make mortgage payments, and take away the threat of repossession and bankruptcy, then it’s surprising what a powerful negotiation tool that time pressure can translate into.

It’s certainly not a market for amateurs, and it’s not a case of 'taking advantage’ of vulnerable people – you have to approach potential deals with a considered business plan and the right attitude, which is that the outcome should be win-win, for the investor and the vendor – it’s about integrity. 

While the credit crunch has increased the supply of properties versus demand, forcing prices to fall sharply, in the longer term, the opposite will happen.  Over the last few decades, 1.2 to 1.5 million properties (government data) have typically been sold every year.  In 2008, those figures were halved.  When prices start to rise, people who don't have to move will be keen to hang on to their homes for a few years while they reclaim some of their lost equity. New housing stock has dropped from 240,000 homes built in 2007 to a predicted fewer than 90,000 in 2009, starving the market of properties for sale, so from 2010 we can expect to start to enter a period of severe excess demand versus supply, forcing rental and purchase prices up again.

The investors who not only survive the next 18 months, but make sound business investments that will set them up with financial security for the future, will be those who are exceptionally diligent and work with the very best experts in the business.

Guest article submitted by Sarah Walker, Platinum Property Partners
0845 293 2877

Please Note:-
The views expressed in this article are of Platinum Property Partners and not necessarily agreed with or supported by Designs on Property Ltd.


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