The property market may have taken a knock with interest rate rises and inflation, but there are still people willing to buy property as an investment – and your clients may be among them. Property is a tangible asset that can appreciate in value over time while the rent provides a steady stream of income. <\/p>\n\n\n\n
The majority of property professionals utilise long-term debt to support property purchases when they are growing their portfolio. The main reason for this is to increase their budget and buying power. For example, a landlord who has $250k to invest in property may decide that rather than purchase one property outright, it might be a better long-term investment to put down deposits of $62,500 on four properties and use a mortgage to cover the rest of the cost.\u00a0<\/p>\n\n\n\n
Not only does this spread the property investor\u2019s risk around things such as rental voids, it also means they benefit from capital appreciation across four properties, rather than one. <\/p>\n\n\n\n
Whilst there are several lenders who specialise in the single asset buy-to-let space, most of these lenders operate by essentially selling \u2018off the shelf\u2019 products. With the huge variation in the life circumstances of property professionals and the properties on the market, this \u2018one size fits all\u2019 approach is not always the right one. In addition, many of these lenders have strict criteria based on the number of properties a customer owns or the geographic location they lend to. If the buyer reaches their property limit or finds their dream property in the wrong town, financial support could be abruptly switched off.<\/p>\n\n\n\n
The good news is that there are other options. At Swoop we utilise more \u2018commercial\u2019 lenders to provide portfolio loans for Professional Landlords and Investors. This can involve as few as three properties, whereby a lender provides one loan facility secured against multiple assets, as long as the properties are owned in the same legal entity. But what if properties are owned by different legal entities? Here\u2019s where the flexibility comes in, as more commercial lenders are prepared to work with Swoop to find a suitable structure and positive outcome for all parties.
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Broadly speaking, LTVs (Loan to Values) are a maximum of between 70% and 75%. Minimum loan amounts start at $500k, with the maximum being $25m. Interest rates vary depending on each specific lender\u2019s funding lines, but we are starting to see rates reduce substantially in this space to as low as 5.5%. Arrangement fees vary hugely in this space from between 1% and 5%.<\/p>\n\n\n\n
Swoop\u2019s is able to work with you and your clients to present options, so your client can select the perfect funding partner with the deal that presents the best route to their business goals.\u00a0<\/p>\n\n\n\n
If you work with clients who are – or aspire to be – property professionals, here\u2019s another area where Swoop can support you in delivering an outstanding service. Contact us here<\/a> to get started.<\/p>\n\n\n\n