Dear Investor

Another week of airports and aeroplanes, culminating in an extended visit to Cyprus and a slower more sedate few weeks in the sun. I had a long meeting with my architect, civil engineer and other stakeholders yesterday to take my new development scheme to the next stage which is to take the permissions.

Very exciting times with my new project set to raise the bar here in Cyprus to a level which will have an impact on the market as a whole as the scope, quality and uniqueness of this development is understood by buyers and developers alike.

We have also been busy looking at land which as we approach joining the Eurozone in January 2008 and with the imposition of VAT next year also, is becoming a very scarce commodity, and as such prices are rising fast which will have a clear impact on property prices. I think we may have found a few plots which we will decide on tomorrow.

Jet to Let Magazine

Thank you for the very positive feedback on the latest edition of Jet to Let Magazine. We appreciate the time and effort you take to let us know your thoughts. The Magazine is going from strength to strength and we have a few ideas on how we can improve it further.

Jet to Let Magazine Conference - 2nd June London

We have had a terrific response for the Jet to Let Magazine conference in London. Unfortunately, I am no longer available on that day due to a completely unforeseen set of circumstances. We will re-arrange the date and announce this shortly. Please contact Gina in the Liverpool office to arrange a refund - 0151 244 5444 or to rollover to the new date.

UK Interest Rates

We had a widely expected rise in UK interest rates last week which will have a further cooling effect on the wider property market and increasing insolvency and repossessions. These rate rises will add further financial pressure to investors who invested off-plan in UK city centres where a massive oversupply of expensive (relative to earnings) property will continue to compete prices and rents downwards. This overhang will take years to resolve itself. I would bet on at least one more rate rise.

Return on Investment (ROI)

I received a property promotion through the post the other day which left me speechless, which some of you know is a very rare occurence!

I wrote in the latest edition of the magazine that you had to be weary and sceptical of some claims made by some agents selling you property. Return on Investment is either a term not understood by some or it is a deliberate policy of the company to hype investment returns.

ROI is exactly what is says on the tin - the "profit" from an initial investment, normally expressed in terms of a percentage. So if an off-plan property is £100,000 and rises by, say, 20% in one year, the profit (before costs) is £20,000. If my initial outlay was £20,000, then my before costs ROI is 100%. This is the figure that some companies hype. It's a meaningless investment tool - it means zip in the real world.

Now let's takeaway some costs, such as:

Finders' Fees - 5%
Legal Fees - 1%
Transfer taxes or VAT - 5%
Selling fees (if selling) 4%

£20,000 minus £15,800 = £4200 or a ROI of 21%

That is a massive difference to the fantasyland figure of 100%, but less marketable when trying to show new clients how clever you are as a company.

Developer Prices and ROI

Further if the capital appreciation figure used is down to developers and speculators competing to raise prices and not that found in the re-sale market, then the error is further compounded leaving the investor not having any real world idea of the market value which is very different from the price.

Beware!

The property industry in the UK is not regulated which is why some companies can promote misleading and unhelpful investment returns which do not stand up to any form of scrutiny. Fantasyland figures belong in fanatasyland and those investors who rely on such figures need to book their trip today.

Latest Property Investment News

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FREE Jet-to-Let investment seminar focusing on Cyprus Monday 4th June - London Saturday 9th June - Dublin Dominic Farrell will discuss investing overseas in general and investing in Cyprus specifically at this FREE 2 hour seminar in London and Dublin. He will look at the wider influences which investors should consider and examine some up-and-coming investment opportunities. These events are always full and entry is by ticket only. We operate a first-come-first-served system and tickets are limited to two per applicant. To apply, please call us free on 08000 277 336 or fill in the form at http://www.jet-to-let-magazine.com/events.html