Background:
Johnny and Jo, a British couple currently residing in Australia, run a successful design company. Motivated by their achievements, they wanted to solidify their financial future through property investment in the UK. Through a recommendation from an existing satisfied client of ours, they approached our property sourcing and investment company for expert guidance.
The Challenge:
Their initial plan was to invest in a luxurious three-storey terraced house in Fulham, priced at a million pounds. While the property was certainly appealing, our thorough analysis identified that as a pure investment, the yield was projected to be suboptimal.
Our Solution:
Having extensive knowledge of property investment in the North East of England, we sat down with Johnny to deliberate on an alternative strategy. Recognising the objective was to maximise returns, we proposed a diversification of that million-pound investment across 10 properties in the North East. This approach promised multiple benefits:
- Increased Rental Yield: By diversifying the investment, Johnny and Jo could potentially see a rental return that was approximately 120% higher than the Fulham property.
- Risk Mitigation: With 10 properties, any rental payment issues from a single tenant would only affect 10% of their income rather than a full 100%, offering them a buffer against potential economic downturns or tenant-related problems.
- Capital Gains Tax (CGT) Efficiency: When the time came for them to sell these properties, by staggering the sales over several years, they could fully utilise the annual CGT allowances. This strategy ensured they didn’t face a hefty tax bill, optimising their investment returns.
The Outcome:
Johnny and Jo, having recognised the value of our tailored approach, decided to diversify their investment as suggested.
Today, they enjoy a robust rental income, a spread risk across multiple properties, and a tax-efficient strategy for future sales.
This case showcases our deep understanding of the property market, especially in the North East of England, and our commitment to crafting bespoke investment strategies for foreign investors and expats.
