Where can you pick up a property investment in London for under a £100,000? The answer: Residential Ground Rents.
In the past developers have seen little return from the sale of ground rents (reversionary investments) but they are now reaping the reward from the current low yield environment. According to Daniel Lachs it is not uncommon to see over 25 times the total annual ground rent income being paid for these types of investment.
Residential Ground Rents are the regular annual payments paid by apartment leaseholders to their landlords (in many cases known as the Freeholder) . This payment should not be confused with service charge payments.
Ground rent investments appeal to investors for many reasons. They can provide a low entry level into property investment. The individual rents are often low and therefore more easily collectable. There are usually provisions for the ground rents to increase over time and provide an excellent hedge against inflation. Fundamentally ground rents are linked to the land and buildings which is recognized as a property asset unlike stocks and shares which are linked to the performance of a company.
For many years grounds rents have been overlooked by investors, but as the search continues for a secure haven and better yield returns. Ground rent investments are now taking the spotlight.
Hurford Salvi Carr have many years’ experience and are specialists in the sale of residential ground rent investments. They have watched this investor sector grow with momentum.