Sunday, 16 March 2008

Nice Investments

I checked out a buy to let website - Nice Investments - today. I picked up a few quotes.

"New turn key service means high returns no longer demand huge resources."

"Multi-Let Residential: "This solution is uncompromisingly the best in the market for gaining the highest rental yields and equity growth."

"Example: Canada Water 4-bedroom property; Purchase price is £400K; Re-developed to provide 6 bedrooms: Monthly interest mortgage payment c£2K: Rental income c£4K: Property re-valued at £600K, freeing up cash to buy the next property."

Example: 1 Bedroom Flat in SE1: Market Value 205K: Negotiated purchase price 155K: Full re-furbishment and high rental fit out for 15k: Pre development rental £650 pm: Post development rental £1,050 pm: Revaluation after development £210k: Equity gain after 6 weeks of development £47K. Surplus cash funding next portfolio purchase.

Our unique approach enables us to double standard market rental yields.

So if any project in which you participate fails to return a profit by the end of the stated period, nice investment will return your original sum plus a return of 10% per year for the duration of your investment (not compounded).

Single-Let: The focus here is to achieve payback for an investor within months of purchase.

The promises here are extraordinary; high returns without "resources" (presumably this means investments without any down payments); the highest rental yields, equity growth, and a guarantee of a 10 percent return plus original investment.

However, I failed to find a single warning on this website that said that the value of an investment can go down; that leveraging multiplies the risk of loss, and that there is some risk with property speculation. Check the website out, and see if you can do better than me.


Anonymous said...

So it is fair to assume that you will not be investing with Nice Investments.


ps what a daft name for a BTL pusher.

Anonymous said...

The 4k rental yield estimate on the 6 bed seems like quite a lot to me, thats £670 each. Who would pay that sort of money pcm to share with 5 others? I think £400 is more realistic which only delivers a yield of £2400 which barely covers the interest on the mortgage IF its fully let.

The guarantee sounds all very well but who in their right mind would trust their money with these sorts of people at this time? No investor worth their salt I would hope!


traderboy said...

look i think if a major company/bank/estate agent was offering this service, then it might warrant comment, but don't go writing about some garbage website obviously promoting rubbish.

sorry to be harsh, but there are better things out there to write about, like:

Lenders pull out of mortgage deals
"Brokers had as little as 10 minutes’ notice on Thursday when Scottish Widows removed the bulk of its mortgage range."


Countrywide in a state over distressed debt
"Apollo Management, the American private equity group, could be forced to pump millions of pounds of cash into Countrywide, Britain's biggest chain of estate agents"

"There are also concerns in the market over the performance of Foxtons"

music to my ears!

Alice Cook said...

Trader boy

That was harsh. Personally, I haven't looked much at the BTL sales pitches, and I was rather shocked at what I saw today.

However, I did discuss the reduction in mortgage volumes the previous day. Rather an talk about what lenders are saying, I looked at the data. I think it is the breakdown of the interbank market that has prompted this tightening of credit.


Alice Cook said...


Thanks for the comments. Even the harsh ones are welcome.


traderboy said...

yeah from that FT article i linked:

"Three-month Libor – the rate at which banks lend to each other – yesterday climbed to 5.93 per cent, its highest level since the start of the year."

amazingly, just glancing at moneysupermarket, there are still plenty mortgages to be had for under 5.50% for up to 90% LTV. No idea how the banks can make money from this.