Am I being impatient?

[Donkey]

I have an investment property in Guernsey (where I live), Channel Islands where the market is rising at approx 6%pa and has been for several years. Market value £350k. Rent yield about 4.4%. The aim is for this property to pay off the majority of the capital outstanding on my own mortgage within about 5 years, assuming that the market continues to rise by 5-6% pa. I can't help but be tempted to sell this property and invest overseas. Given my aim should I just stick it out or should I sell it and take the £150k profit elsewhere?

[newguest]

I think you should either:

1) Stick with what you are doing & keep a close eye on the property market & sell up if it shows signs of a downturn,

2) Change your aim to "pay off all the capital plus a sizeable surplus, but with the risk if things go wrong, of a lot of hastle and possibly lose some or all of the £150k".

[awahee123]

Personally I would sell and invest in 2 to 3 different overseas locations which would bring you good returns within 2 years,certainly a lot more then 6%.
And a very big chance of doubling your money by 5 years.

[The Soup Dragon]

I was in a similar position in 2004. I downsized early the next year to free up equity to invest abroad. If I were to do it again I'd place a greater slice of my money into property development. That's my tip for you. If you aren't bothered about having a holiday home then there are likely to be better alternatives for you. The range of investments out there is incredible, starting from a simple savings account in the UK offering circa 14.5% interest pa* to becoming the money backer for development opportunities in emerging markets (with much higher anticipated returns.)

I've acted as an introducer for friends making the same investments as myself, but I'm not an agent and won't plug anything if you chose to get in touch. Feel free to send me a private message with contact number if you would like to know more as posting about several different types of opportunity could take quite a while.

*I imagine one or two reading this will be curious to find out more. It isn't something I have researched, but I'm happy forwarding the sales blurb so you can find out more. Essentially an account is set up with Yorkshire Bank, or similar, in the developers name. The developer provides you with the Ts & Cs for the account prior to you parting with your money. The Ts & Cs should show that the money can not be taken from the account by the developer, though they can instruct the bank to release funds to you. The developer uses the account to show foriegn finance bodies that they have a healthy cash flow. This enables them to more readily secure lending abroad / secure the lending at a better rate. At end of 3 year term you are paid back your invested amount plus interest. Obviously this is not a normal savings account and you will need to do your usual due diligence. Your money will also be tied up for the 3 year duration. (You can take it out earlier - penalties for doing so are high, but not prohibitive.)

[awahee123]

To be totally honest at this moment in time you would get about 6.5% with it sat in the bank, in property you would and should be looking for at least 9 to 10% really.

[Goldberg Global]

Soup Dragon, that sounds quite interesting, I wonder what the details show on the contract. 14.5% is not bad. I have some paying 30%, but again one needs to weigh up risk and reward.

[awahee123]

Sounds good if you want to tie your money up for a while,or if you have a savings account this would be a good alternative, without any real risk apart from losing some interest.Even with the penalties depending on what they are I shouldn't imagine anyone losing too much if they had to withdraw before the end of the 3 year period.

[The Soup Dragon]

Originally Posted by Goldberg Global

Soup Dragon, that sounds quite interesting, I wonder what the details show on the contract. 14.5% is not bad. I have some paying 30%, but again one needs to weigh up risk and reward.

Hi Goldberg Global. Happy to forward the information if you would like to take a look at it. Would be interested in reading about the 30% pa return you mentioned.

[Goldberg Global]

Hi Soup Dragon, try info at goldbergglobal dot com for more.