There is one clear reason why people invest money and that is to make a good return. MWM Property Northwest invest in properties in the private rental market and generate returns of 8% for investors with minimal risk, making us the intelligent choice for investors.
MWM Property Northwest have an ever-growing and diverse property portfolio. The journey began with smaller buy-to-let houses and has gradually grown in scale and complexity with the addition of larger multi-unit/apartment buildings and houses of multiple occupancy (HMOs).
Why invest in property?
The private rental market continues to grow with 21% of UK households in privately rented accommodation – in 2006, this figure was just 12%. With the UK in growing housing crisis and reduction in social provisions coupled with the stable, high returns mean the private rented sector is a sound long-term investment option.
How do we do work?
We purchase properties in states of extreme disrepair according to a strict set of criteria to ensure profitability of the project. In order to be viable, the project must be forecasted to deliver:
- Minimum 25% return on capital invested (to include all refurbishment costs)
- Minimum gross yield of 8%
- Set minimum monthly profit
The properties are also stress-tested against future mortgage increases and other environmental risk factors.
At MWM Property Northwest, we like to reassure our investors their money is safe. In fact, all private loan agreement terms are drawn up including a personal guarantee. This secures all loans on the entire portfolio (which continues to grow) as well as our private properties which sit outside of the business. There is an option to secure a first charge on a property for larger loans – this can be discussed on a case by case basis.
About our Return on Investment
The return on investment (ROI) is a calculation of how much money is ‘left in’ the project upon completion after refinancing, and how long will it take the rental income profit to pay this money back.
If the money left in pays itself back in 1 year, ROI = 100%
If it takes 2 years, ROI = 50%
If it takes 3 years, ROI = 33%
If it takes 4 years, ROI = 25%
If it takes 5 years, ROI = 20%
MWM Property Northwest always maintains a minimum of 25% equity in every property, so if it is sold, every project would make a profit. However, the investment strategy is to retain ownership with as little cash tied up in the project as possible.
Property purchase price = £50,000
Refurbishment & other costs = £33,000
Total cost of whole project = £83,000
End mortgage valuation = £100,000
Mortgage lender return from refinancing = £75,000 (based on standard 75% loan to value (LTV) buy-to-let mortgage)
£75,000 (the money back) minus £83,000 (costs) = £,8000 left in the deal OR £17,000 profit left in due to the 25% equity owned by MWM Property Northwest
Monthly rental profit after all expenses = £250 x 12 months = £3,000
Return on investment calculation = £3,000 (yearly profit) / £8,000 (money left in) x 100 = 37.5%
This means it will take just less than three years to repay all the money left in.
MWM Property Northwest still holds 25% of the equity
All future income is a never-ending profitable income stream
What is gross yield?
This is a calculation of the following:
Gross monthly rent x 12 (yearly gross rent) / end value (what the mortgage lender has valued it at after refurbishment) = yield %
MWM Property Northwest have yields of 8-15% depending on the property in question
What does the future hold for MWM Property Northwest?
Our robust criteria for property selection and the security of each investment ensures our returns are high and consistent making MWM Property Northwest a sound choice for your money to work for you in the future.
We have a vision for growth in the future. Our long-term strategy will include:
- Conversion of commercial buildings into multi-unit apartment blocks
- Mixed use commercial and residential buildings’ projects
- Flips – buy a property, refurbish and sell on for profit
- Planning gain flips – buy larger buildings, design the conversion, gain planning consent, then sell to another developer for a profit
- Provision of suitable housing for vulnerable or disabled client groups – this will combine the company owner’s previous career in occupational therapy and her passion for property and helping people in need.