Selling properties, especially investment properties and buy to let properties used to be quite easy. Sorry to all the sales people out there, but it did.

Having previously worked for a property investment company, I know that it was plausible to push through 4 – 5 deals a week, very rarely without any lending problems and mortgage approvals tended to be easier than finding a Manchester United fan in London. Those were the glory days of lending and up until a year ago the level of lending was at a record high and the amount of buy-to-let mortgages that were being approved was staggering, also accompanied by some of the best rates investors had ever seen.

Some would say this is the reason we are in the midst of a recession and struggling, but that is another blog, one of which we have covered and will cover elsewhere.

Recently, I brought a couple of stunning BMV deals to the table, as we felt that after a year in which we would not touch property, we now had a couple of deals that really did make sense to the investor. This was due to better discounts, newer and an increased amount of decent mortgage rates and just the general feeling that property had hit its lowest level and was now starting to recover, according to reports from leading lenders and banking institutions.

We sold Penn Lane within a couple of days and currently have offers on the further two properties that we have on our books, but we kept hitting a common discussion with some of our investors – “would love to buy it, I am just too old, I wont get the mortgage”.

As with anything, previous misconceptions had started to creep back in to investors minds. Some of our investors tried to get a mortgage just as things were starting to look really bad and were hit with many reasons why they would not be approved, one of them being age which is in fact in relation to risk. This had then been indented into their investment strategy and they were probably now missing out on deals that they really wanted to get involved with.

We work with one mortgage broker and a quick call to them to inform them of this supposed age issue and we were met with they reply that this indeed was not really the case anymore, and in fact we could offer mortgages to people in their late 50’s and beyond. Chris then went back to the investor, forms went in, and he is now waiting to complete on the deal next week, which is a bonus not only for us, but also for the investor that a year ago was simply not able to go through with these deals any more.

In April last year mortgage lenders got edgy, they were panicking, they knew trouble was ahead and they were refusing mortgages for many reasons. In fact, I can not mention the name, but I knew of one mortgage that would not go through this time last year because the property had decking!!

With mortgage lending now recovering, new criteria are in coming into play and some old reasons to refuse are falling away.

Are you too old for a mortgage on an investment property? Ask us, you might just be surprised.

Today I’m going to take a look at what type of property will be a good play in 2009, with 2 main contenders: existing,completed properties or the recent investor’s darling, the off-plan..

Firstly, as a pre-text, it does depend on strategy.  If you are looking for a holiday home to use in the next few months, you will probably not be considering off-plan…so for the purposes of this piece we will assume it is for investment in 2009.

A comparison – existing, income generating properties are in many ways a lower risk play than off-plan and generally perform better in a downturn.  What is important with existing properties is that you have real-time evidence to base your decisions on: current comparable property prices, rents levels, availability of tenants, mortgage rates and terms, currency (if buying abroad), political situation, etc.  As your property is active as of now, compared to off-plan which is active in the future, you have the benefit of what judging information on what is happening now to manage your risk more appropriately..

With off-plan, it is a more speculative, higher risk type of purchase.  Off-plan is a solid enough investment in a booming market, where increases in equity are sought over rental yield.  You are however taking a leap of faith with off-plan and need to ask that many more questions.  Depending on location, such as an emerging market, there may be nothing built with no idea of valuation other than the developer’s price as a guide.  In the time between “purchasing” and “completing”, a whole set of factors will change, either in your favour or against you.   These factors include, property values, rental yields, mortgage rates and terms, final construction quality, infrastructure changes and exchange rates.  So off-plan is a higher risk play; some projects will be of great success but many others won’t.

With regard to the off-plan boom in the current climate, there is a caveat, and this applies to off-plan units that are soon to complete, or have just completed.  A number of locations round the world have suffered from over-supply of units from developers.  In several countries I have been to, many developers are renting recently completed, previously unsold, off-plan units out to generate some income.  These units are available for a snip of the advertised price when they were off-plan so, depending on your strategy and where you would like to buy, there are no doubt some excellent recently completed, or soon to be completed, “off-plan” deals.

Therefore in today’s market, for investment it is generally a better bet to go for completed existing properties, or soon to complete, “previously off-plan” properties, where the evidence to make your investment decision is real-time rather than 2 years away.