Nottingham, United Kingdom (PressExposure) April 22, 2008 -- The Aurora Sky Hotel Apartments are easily one of the best property investment opportunities on the market, because apart from their being amidst some of the world's most beautiful mountains, and scenic landscapes; beautiful when they're covered in snow for 6 months of the year and beautiful when they aren't, and apart from having excellent all year round rental potential from the wide range of summer and winter activities, on top of the world class ski slopes, that guarantee six months of excellent skiing conditions; apart from all that, the apartments pay their own loans off.
Yes, the Aurora Sky apartments have the potential to be almost completely self financing -- you could even get your initial 20% down-payment back -- and then some.
Here's how: Take apartment PS411 for example: PS411 is the last remaining 3 bedroom penthouse:
The apartment is priced at 422,143 Euros. The capital required is the 20% deposit, in this case, 84,428 Euros. Then the 337,714 Euros 80% is to be paid on completion October 2009.
Now as an investment it is advisable to invest your capital while the property is being built, with, in this case 22 months of off plan capital appreciation to increase your financing potential. Off plan property in Levi has risen by 30-40% per year for the past 4 years. So, for more reserved estimations, if we say that the property will increases in value by 15% per annum, then the above property will be worth approximately 600,000 Euros when it is completed.
So you take out the highest loan to value mortgage you can find. David Stanley Redfern Ltd, are currently in negotiations with Nordea Bank and OSUS Bank for 80% loan to value mortgages at around 5% interest only. It is too early to get exact interest rates but this is what we are basing our calculations on.
An 80% loan to value mortgage, on a property valued at 600,000 Euros gives you 480,000 Euros. Meaning that after you pay the developer the 80% balance of 337,714 Euros, legal fees and other buying costs of around 17,000 Euros, you are still left with 125,000 Euros -- over 40,000 Euros more than the initial capital you laid down.
The apartment pays its own loan off.
Then you would have to pay the mortgage of 480,000 Euros, which at 5% interest is 24,000 Euros per year. Add to that the monthly running costs of 3 Euros per square meter, which on a 66m2 apartments is 198 Euros per month, and the total yearly cost of the apartment, including mortgage repayments comes to 26,376 Euros.
Your 6% guaranteed rental income gives you 25,328 Euros per year, so you would need to put in a thousand Euros or so. This would mean you have a property that is pretty much self financing, of course if you took the commission based rental management and it achieved its full potential, the apartment could be paying off its own mortgage and leaving you with a profit.
Either way you have your initial capital back out with 40,000 Euros to spare. You can then put your capital back where you got it from or increase your property portfolio by investing in another project -- the choice is yours.
Find out more about the Aurora Sky Development, and other Finland investment properties at: http://www.davidstanleyredfern.com/investment-property/finland/