THE IMPORTANCE OF PROPERTY ASSETS

NET WORTH

Do you own property? Do you feel it is an important part of your assets? Many of you will answer yes to these questions. Growing numbers of people own the properties they live in, benefiting from security and ongoing stability. However, this asset is not an investment that can be encashed in full or in part without a great deal of upheaval to your personally.

A number of expats have further investments in property beyond their own residences. Ownership can take several forms and be an integral part of your investment portfolio. You can own units in property funds or bonds. Specialised fractional investments allow you to own part of a physical property, whether it is residential or commercial.

Many people like property because it is an asset they can touch and feel. Acquisitions can be a little tedious but if planned correctly these investments are actually easy to make and can produce good solid returns over an extended period.

If you would like to diversify into your own property, where will you begin? Having a physical asset does not mean that you have to specifically visit and choose it. This is an investment and as such you ought to be looking at returns and commercial sense rather than the emotions of whether you like the kitchen layout. If you purchase shares in a multinational corporation, would you insist on visiting its head office first?

This opens up many possibilities because you can select from the relative comfort of your local home in Thailand. Buying "off plan" is easy and there is a lot of information available to help you make a decision. There are also expat companies in Thailand that can help you through this process.

Wait a minute. How are we going to finance this project? There is help available to secure mortgages for the purchase of such properties. The expat company can take you through this procedure with relative ease.

Having established that you can buy a property and arrange the financing almost without having to leave your living room, the next question is where to purchase? As this is an investment it would be wise to look at this question commercially. There is a country where there are no restrictions on property ownership and where current conditions are very favourable. This is the United Kingdom.

London is just beginning to experience Olympic fever. Property prices are expected to spike in the runup to the games in 2012. This could mark the beginning of the recovery in London-based property from the lows of the past two years.

But on a more level footing, look at these long-term advantages:

- The UK is an established market.

- There is no restriction on ownership.

- Property values have consistently doubled every 10 years for the past 100 years.

- Rental demand consistently outstrips supply.

- There is a well-regulated legal system.

- A controlled valuation systems ensures consistency in mortgage valuations.

- There is a constant demand for resale homes.

- Mortgages are available for most buyers.

Once you have established a mortgage facility and made your purchase, your property will be available for letting to tenants and will effectively become self-financing through rental income offsetting mortgage payments. There are also often cash income surpluses available. If you arrange the right international currency mortgage with an investment repayment vehicle you will be able to repay the mortgage earlier than estimated.

The combination of utilising a multi-currency mortgage and changing currencies at the right time will enable you to reduce mortgage outgoings and simultaneously decrease the principal from time to time. This will ensure that you enjoy enhanced benefits from the long-term investment. With capital growth your property will accumulate handsome gains over the medium to long term.

There are currently some attractive offers available for London property investments. If you don't have the cash for a deposit today or you don't want to tie your cash up with a developer while the property is under construction you can secure your initial 10% deposit with the purchase of a "deposit guarantee bond" underwritten by a substantial bank. This requires a 1% outlay of the purchase price today.

Buying off-plan property using the deposit guarantee bond removes the necessity to tie up substantial resources for long periods. Your cash can be invested elsewhere earning returns up to possession of the property.

Next week we will delve further into the world of international currency mortgages and how you can make this diversification into a property investment.

Questions to the author can be directed to Barclay Spencer International on 02-653-1971 or e-mail to info@barclayspencer.com