Probate Problem

Last night was the first of our quarterly in house seminars which was well attended and brought about some interesting discussions on the market and its future. Its main point for the uninitiated was to show what a property yield actually is and how to calculate a property yield. The importance of yield can’t be over emphasized in this current market where cash flow is paramount but in some ways calculating a property yield is only secondary to calculating the return on investment (ROI) which represents the truth behind what you actually make. This point was brought across very well and the feedback from attendees was certainly encouraging. This year we expect to see our best growth in all three of our specialisms showing people how to achieve low cost property purchasing, portfolio building and joint ventures. For all of which we must be able to show a good yield. The event dates are yet another thing that will have to go onto the website which really takes an undue amount of time to update particularly when things in reality move so fast. We generally expect the internet to be ahead in so many ways and yet with investment property it has to play catch up to the value of consultation.

Recently we’ve been consulting on a probate case where the estate and the deceased’s property have been left to two main beneficiaries his friend and his daughter. He left his chattels to his friend, whom we have been trying to help and the property was left half and half. Before our client had even seen the will the daughter had cleared the house and sold of all his chattels, totally against the wishes of the deceased. Then the son rears his head and contests the will saying he was entitled to part of the property. Our client being a long way from the London location has to look after her own interest and when the property is apparently offered for sale and quickly sold for far less than its market value there is a strong smell of a rat. Every time our client visits a solicitor for a letter to be written in support of her arguments she adds another £1,000 or more to a bill which will have to come of whatever proceeds she receives. The more we hear of the case the worse it sounds and our own investigation work soon showed up that somebody is not being fair to our client.

Putting the problems of probate to one side we asked our client exactly what she actually wanted and discovered that the sale of the property and its revenue are not necessarily her highest priorities and quite understandably she wants to see fair distribution of the will of her friend. When we looked more closely at her situation and gave her another alternative to having the lump sum via a joint venture to buy out the daughter at the lower price and for her to get half of a very favourable yield from renting the house she was able to see another way of changing what had been a negative situation full of animosity into a potential gain for her with long term benefits far more worthwhile than an amount of money she would probably fritter away. Explaining to her what a property yield actually is and calculating the yield with her, gave her hope that working with us could change round a set of circumstances that has been causing her an undue amount of stress.

Having a large amount of money and not knowing how to manage it effectively can be as difficult as having no money at all. There are many cases of big winners losing everything within a few short years when they should have been set for life. Many people with money become a target for the unscrupulous and property seems to be one of the areas where the dodgy characters seem to proliferate so make sure you can trust your advisors by speaking with their other clients and finding out as much information about them as possible. Your money is your money so don’t let anyone have it without a full understanding of its future value and return. There are no real guarantees in life but when an investment is backed by property it at least has some tangible value that can be seen and sold on providing you have the right legal framework in ownership. More importantly the yield from a property must cover all the intentions you have for that property not just its own costs.

The capital increases in property of years gone by can’t be relied on now and even if you are in unique areas like London don’t ever be taken in by what somebody says, do your own due diligence so you are confident with what you are buying or investing in and then if things do go wrong at least you’ll only have yourself to blame. Understand what a property yield is and how to calculate it so you will be confident in your property investing. We’re happy to consult with anyone to show them how to calculate a property yield or explain more fully what a property yield is. When a property is in probate expect there to be a lot of hurdles to jump but don’t let others run rings round you.

Always invest in property with yield in mind.

Written by:
Lionel Palatine – He is a regular networker and a speaker at events as well as being a property author and adviser. He joint ventures deals and shows people how to buy property for low cost which are inclusive of all fees and deposits.

You can find him on regular social media Twitter |  Facebook  |    |  YouTube  don’t forget to add him

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