Property Investment FAQ
Welcome to the Property Investment FAQ page. Here I will answer frequently asked questions from investors. You can also Submit Your Own Question!
Here are some of the questions I have received…
Who are RJM Properties?
RJM Properties are a property sourcing and investment company, based near Stranraer in South west Scotland. RJM Properties is a partnership solely owned by RJ & RJ Matthews
What does RJM Properties do?
We are firstly a property sourcing company dealing with re-sale properties. We offer a full consultancy service, sourcing property with good solid fundamentals, managing the entire process (mortgages, Solicitors, refurbishments) through to completion and getting its first tenant. We also offer a letting service on an ongoing basis and regular portfolio reviews and support.
What areas do we target?
We source our properties from the North of England and Scotland, although we do look at areas, and look closely at rental demand, as investors ourselves our primary concern is the rental yield, discount to market value, and total capital investment in the deal.
How do RJM Properties earn their fees?
We do not charge membership fees, joining fees or require you to invest large amounts of capital upfront before you get a property. You remain in control of your capital.
We earn our fees each time you buy a property from us. Generally they are £1500 + VAT per property. These fees are payable within 7 days of reservation.
What types of properties do RJM Properties source?
Our prime focus is on re-sale property in the UK. This should always be the foundation of a good portfolio (building in your local market before going overseas). We will only invest in markets we have a personal knowledge of, including having invested there ourselves.
Why should I use RJM Properties rather than going direct to estate agents?
An estate agent works on behalf of the vendor not you; their job is to get the highest price. They cannot offer as many effective structures to purchase the property with gifted deposits like a specialised consultancy like ourselves.
Why in some cases do I not have to pay a deposit?
In some cases you can use what’s called a “gifted deposit”. This is where the vendor effectively pays part or all of the deposit for you.
What happens to fees/deposits if I pay them and decide not to go ahead?
Reservation fees are always non refundable as these are paid to the vendor and they are unlikely to refund these. They are normally between £350 and £1000.
As a rule, Finders Fees are non-refundable once paid. Deposits and other costs for the property you are buying are always paid directly to the solicitor.
How will I be notified of opportunities?
You’ll receive notification to your nominated email address. We would ask that if you are serious about building a property portfolio, that you contact us to register your interest and specific requirements. This will mean we can call you directly when properties that match your criteria are available.
Can I get a mortgage?
Yes, we have in most cases mortgages already in place and subject to status and can offer up to 75% mortgages. We can also offer 70% non status mortgages on selected buy to let investments. Many of the products we market will also have other incentives attached such as significant cash back agreements from vendors upon completion.
There seems to be a panic in the Lending Markets - do the lenders know what they are doing, and how do you see it panning out?
Very good question, and I think almost all investors in the UK will have been affected. Any investor in the UK will have been hard pushed to have seen such a rapid change before in financing options available to them. We feel lenders will remain cautious for the first quarter of 2009, and this will offer the best buying opportunity for investors, due to lack of available lending. When lenders relax, and first time buyers return to the market we will see a period of rapid inflation and house price rises.
Is 2009 a good time to invest in property?
Traditionally property has proven to be the most reliable form of investment. In the current economical climate investors should be more careful where they invest but for investors who make educated investment decisions it is possible to generate high returns with much lower risk exposure than in usual market conditions. RJM Properties has worked hard to create strong strategic partnerships and provide members with innovative investment strategies that leverage the current liquidity crisis offering high returns with a low risk ratio.
There are so many choices out there and so called excellent investment opportunities – how do I decide where and what to buy?
Excellent question, and with so many offerings how do you decide?
Whenever I am looking to buy, I look at rental yield, and total capital required to complete the deal.
For example if I am offered a 2 bedroom terraced house in Burnley, Lancashire for £25,000 that needs a £5,000 refurbishment and will rent for £390 per month then it is a ’no brainer’.
This is because:
* I know the house will be worth £50,000 post refurbishment.
* I will be able to raise in excess of £35,000 against the property almost immediately, giving me £5,000 cash back after all costs.
* The property will give me a £240 per month profit after mortgage interest payments.
Similarly any property that costs me less than £5,000 to acquire, and makes me £100 profit/month is a suitable addition to my portfolio.
How do I know it will be rented out?
Every property we offer is fully vetted and is only approved if the location of the property has a high level of tenant demand. We also take a great deal of care with choosing the right management agents to ensure the property is rented quickly and to a quality tenant.
Send your own question in now, and we will reply to you personally within 24 hours.
