Highest return?

[Mobster raks]

Trying to find something that would give me the largest return on my equity.

Got a 5% net account in the mean time, but looking for something circa 10% (possible?), with absolute minimal potential loss, if any?

Any ideas people?

Any help appreciated

[ATG]

by "minimal potential loss" do you mean you don't want to risk losing any of the original capital, but you are prepared to risk earning no return? If so, there are investment "bonds" offered by banks/building socs that guarantee to pay back your original capital while giving you a return that'll be something like "90% of the return of the stock market over the next 2 years, capped at 10% per annum". They do this by taking your money, and putting it on deposit (they receive the interest, not you). That earns them a guaranteed return of, say, 4% per annum. They then do some stock market index option trades to give them exposure to the stock markets (something like buying an at-the-money call and writing an "index * 120%" call ... this will require some cash upfront which they'll finace with the interest payments they're receiving from your cash on deposit). Any funnily enough they'll take an up-front profit out of this for themselves. So the package they're selling you does meet your investment objective of not putting your capital at risk, but does it offer good value for money? The option trades and the profit for the bank all come out before you earn a cent, so it is a fairly expensive way to invest. Might be better value to accept a bit more capital risk in order to get a fairer slice of the reward.

[Mobster raks]

good explanation of the processes - thanks!

yes, was looking at minimal to no exposed risk to inital equity, but room for movement in return.
still looking for that magic 10% though!
Property is yielding 6-7% right?

[srebbe64]

My commercial property investmenta are giving me 8% roi in rent, plus they are going up in value (I hope) so it's a good return with minimal risk.

[billsnemesis]

There are some good property deals to be had but it can be hard to get 8% immediately. Transaction costs are quite high, not least being the 4% you get clobbered on stamp duty land tax if you buy anything over £500,000.

Add on the legal fees and any fees if you pay an agent to find a property and you could see 0% return in the first year.

The main risk is the tenant going bust which can happen to anyone but if you can find a good deal and hang on for a few years and get past a rent review you can find that your return bounces up markedly. It is certainly possible to get double figure returns but if it were easy everyone would be doing it.

Residential in London is giving about 5-5.5% income but if the figures are to be believed there could be some capital growth this year.

There are a lot of drivers affecting the amount of return on commercial property including levels of gearing, interest charges and length of lease but if you are interested then email off line and I can go through the concepts.

[Mobster raks]

Ta very much for that... I'm going to do some background research.

Have a couple of other ideas mooching along aswell, so we'll see how it all turns out

[Rich25]

I deal in property investment and please do not feel that it is risk free, even commercial property: no tenant = no money + mortgage payments! If you are interested in investing then I email me privately and I will run through a lot of the +ve and -ve factors as I have a lot of experience in this field.

I currently have access to a great deal in Portugal, which requires just 2.5% deposit (about £15k), and should be a comfortable 300% ROCE over 14 mths. This is not particularly speculative either. It simply revolves around the correct financing set-up on the deal. This is a good example of how you can minimiseyour investment through gearing.

[aceparts_com]

Rich25 said:

I deal in property investment and please do not feel that it is risk free, even commercial property: no tenant = no money + mortgage payments! If you are interested in investing then I email me privately and I will run through a lot of the +ve and -ve factors as I have a lot of experience in this field. I currently have access to a great deal in Portugal, which requires just 2.5% deposit (about £15k), and should be a comfortable 300% ROCE over 14 mths. This is not particularly speculative either. It simply revolves around the correct financing set-up on the deal. This is a good example of how you can minimiseyour investment through gearing.

Please don't flame me for being pedantic (never used that word before so not sure if it's spelt right) but....

By minimising your investment through gearing you're actually maximising the risk (by the same gearing factor).
I'll go back to my led's now.

[Rich25]

Gearing is a matter of perspective and maybe mine is slightly biassed! Yes, the incumbent debt is bigger, but the worst case scenario is an unrentable property. The money saved on the intial deposit would be enough to cover the downside in payments.

Plus any reputable developer (and this probably does not include 90% of the ones joe [public has ever heard of!) will work in conjunction with a local management agent to offer realsitic returns. For example the rental yield on the Portugal job I mentioned before are 15-20% and this is based on a pessimistic 45% occupancy rate.

At the end of the day, risk is proportionte to return in the vast majority of asset classes. I find the element of control offered by property, selected with proper due diligence and not as a tail-end-of-the-market bandwagon-jumper, tilts these odds in my favour.

I do hope that didnt come across as a flame or a !

[thepeoplespal]

If you have any sort of mortgage then investigate a "bank account" mortgage for the highest levels of no risk, instant access high return with absolutely no tax to pay to the government. Especially suitable for those who are higher rate tax payers. Take the interest or take a few years of paying off your mortgage, the choice is yours.