First of all I would like to congratulate you in taking the first step in your property and investment business, property investing is a very personal issue and many people will tell you now is not the time to purchase, I would say the opposite is the truth. We at Property Investment Tips appreciate that different strategies will meet different people’s criteria and their own personal risk analysis. Our approach to the subject is one where we will carry out due diligence and analyse the financials thoroughly regardless of what third parties may or may not say.
One of the first issues that we would address would be to create, that means actually putting pen to paper (according to experts, the actual act of writing something down has far more power than thinking/dreaming it, it makes it real) a specific list of your goals. We feel that in life many people will just stumble along with no aims or specific goals, we can demonstrate this by using the following analogy: ‘a ship without a rudder’. I think this is a fabulous way to explain goal-setting.
If you look at successful people, these may be in business, athletics, acting, musicians etc and you will more than likely find that early on in their lives they dreamed had this vision and finally decided that they were going to be a professional footballer, professor, accountant or whatever it was that they aspired to achieve. The purpose of goal-setting will stimulate and focus your long-term vision. Basically it is like a map identifying certain achievements you have to make to ensure you meet your final goal, this will be beneficial in organising time and your resources to ensure that they are working to their optimum at all times.
Another benefit of setting goals will be to help you decide and choose where you want to get in life, this will enable you to carry out specific actions precisely to enable you to achieve those goals and be unable to concentrate your efforts on one hundred percent. If you attend any workshop on self-motivation they will quite often ask the students what, where and who with they wish to be in 10 years. This is a great question and we can all get a great deal of pleasure of saying whatever our goal/dream may be. The difficult question that generally follows is okay how are you going to achieve that? This, then will make you focus on what you have to specifically do within the next five, two years and even as close as 12 months. To give an example: if you were to offer advice to your children on a career that they choose to follow, let’s say something like a police officer, it is reasonable to assume that if you wish to get accepted as a police officer then part of the criteria that you would have to meet would be achieving a certain level of fitness together with achieving the necessary grades at your examinations. Therefore to apply this as an example of goal setting this would dictate how we would actually achieve meet the criteria, this would be a combination of studying hard to achieve the necessary grades required and achieving a level of fitness to ensure that we pass any medicals. Simple!
Therefore to apply this strategy to Property and Investment from our perspective was a simple form of goal-setting. We decided to take control of our own pension fund. We are all too far aware that the government/insurance/pension providers will tell is all a different story, or they fail to discloses that their figures are only based upon statistics and no guarantees are made-apart from of course they will take their fees come what may, let’s make no mistake about this we have all experienced it the only losers in this game is you the customer!
As part of our goal-setting we decided that we wanted to take our pension contributions and invest in bricks and mortar, it was our long-term plan that we would develop a portfolio which would incorporate a broad range of properties from buy to let apartments, terraced houses and commercial offices which we could let out on a managed basis. That was easy, all we had to do now was to apply a time limit. That’s when the goal-setting becomes more difficult to attain and achieve but, you have to be realistic, organised and professional in all of your duties to ensure you can meet these. One important factor to consider with the setting goals is that because you the opportunity to regularly assess the progress or indeed lack of progress. Don’t beat yourself up over it because there will be many occasions where issues will occur that will prevent or delay actions being completed, what is important is that you assess and adjust accordingly.
The key to successful goal-setting is to set out targets which are achievable, whilst a lot of people will tell you that they would like to have a portfolio of property which will create an investment of hundreds of thousands of pounds per annum what they actually need to do is look at it and say okay, how about we can achieve a portfolio that will achieve an annual income of say £10,000. Let’s then build upon that, in our experience it is far easier to set targets which can be met which in turn will give you the confidence to build a business which will be successful for years to come.
Whilst a lot of property investors may feel that the market is not the place to be investing in during this current economic climate, it could be argued that the opposite is true.
The UK property market is still ideal for investors looking for opportunities which have the potential for long-term capital growth. What we have to realise and accept is that you will not achieve capital growth overnight.
Whilst the banks have sharpened up there are still over 3000 mortgage products available for investors, however what the lenders are looking for is a far more strict criteria of loan to values to protect their interests.
It is a popular belief that the banks are being pressurised into ‘opening up for business’ as the latest government figures expect the households in England to increase by 223,000 per annum without any adjustment for immigration. Current estimates vary but as a ballpark figure we can expect 200,000 units per year being actually built, therefore that is our market all we have to do is to meet their demands.
Again due diligence is the key to all of our business investments, location cannot be undervalued nor can the type of property for our specific target market.
I believe that this next six months will see a huge upturn in properties going to auction and consequently bargains are there for the taking.
Specifically we are looking at the domestic market but all we have to do is drive around industrial units and look at all the empty warehouses/office blocks-opportunities are everywhere you look. As an idea how about breaking up a warehouse in smaller manageable units? There are deals to be done and we believe that all you have to do is ask the question, ask it often enough and sooner or later and you’ll get a yes.
Till the next one and good luck with all your investments.
Recently whilst surfing the web I came across a website ‘Your Property Club’ which looks interesting. And no doubt, like most of us you I too flit from page to page looking for something which grabs my attention.
The site layout is very professional and there’s lots of useful content and advice for anyone looking to buy investment property. What they have achieved is a very credible website; it is in actual fact a membership site which ultimately is looking to source properties for its members and therefore creates income.
This is not a criticism as there are plenty of armchair investors out there who either hasn’t got the skills, time or inclination to source their own buy to let properties and for this privilege they’ll pay a fee which is fine.
In this particular case what got my attention was the prospect to download their software ‘Ezytrac’.
What the site is offering is a property spreadsheet which will collate all your property and financial data, to assist with buying investment property; this is what I’ve been looking for-awesome!
I had previously created my own basic spreadsheet, which I often update, tweak as the mood takes me. But as a professional investor I am constantly looking for better systems to manage the most important aspect of my business-the finances.
As with most membership sites you enter your e-mail address and create your very own login details, which will then enable you to go and have a look at the software. Unfortunately I was disappointed because you cannot download the software to your own PC as it is hosted by ‘Your Property Club’.
While this may not be an issue for other property investors, I would not be comfortable uploading all my personal data and trusting it onto someone else’s server.
One of my major concerns being that this is confidential and private information for my business, which all of a sudden they would have access to. No doubt this is also used as a marketing tool to try and sell more properties therefore creating a site owners income.
On a positive note Ezytrac is quite easy to follow and comes with a host of video tutorials to take you by the hand to explain its functions.
In conclusion I don’t think that I shall use this particular function but I shall certainly monitor the site and glean from it any information which I can which will be beneficial to my business.
In this ever-changing world we are constantly looking for innovative ways to purchase properties. Whereas our parents traditionally would have saved up a relatively small deposit and then approach the high-street lender for a capital repayment mortgage. In today’s market it is somewhat different and obviously the price has increased significantly.
If you apply the same principle to today’s first-time buyers, they would more than likely need to save up in excess of £30,000. For some this could be achievable, but for perhaps the majority of potential homeowners this could be too large a mountain to climb forcing them to remain in the rental market.
We have a strategy whereby you can enter into a contract whereby you can Lease to own homes.
However, if we are creative and apply a simple strategy we can make their dreams come true. Let’s face it, how many people save up then go on to buy their car? We would suggest most people sign up to some form of finance arrangement.
So why don’t we apply the same strategy to buying houses? The basic principle being, offer someone the opportunity to take an option to purchase at a later date. You could look upon it as a simple lease with the option to buy homes i.e. pay a market rent with an option to purchase at a later date. This could be marketed as’ lease to own homes, rent to own homes, lease purchase homes, renttoown, rent 2 own’ or whatever suits.
You can structure whatever deal works for you and your potential purchaser, this could be an enhanced rent with part of the rent being put towards a deposit. The term again is whatever works for you and your tenant, typically you can offer a term of 3-5 years. Again if at the end of that term they don’t wish to exercise the option they are under no obligation to and they hand the keys back, in simple terms rent 2 own.
This strategy is we believe the way forward, the alternative being mum and dad give there children thousands of pounds to fund their deposits.
In summary a contract available with an option to purchase at a later date has got to be a better strategy than those of us that wish to purchase property, what we need to consider is, a lease purchase homes is not dissimilar to the purchase of a car.
Professional property investors are enjoying the current financial climate. What? You probably think I’m mad making that statement. On the contrary, what we are experiencing at the moment is a market that is panicking and amateur investors are panicking l. What this does for the professional property investor is gives us the opportunity to buy properties which will meet our strict criteria.
6. We are all too well aware that far too many people jumped on the bandwagon and purchased buy to let properties without applying simple basic criteria. Let’s face it, with a rising market anyone can make money no matter how bad a deal it was. Clearly this is a lesson to us all and reinforces that we need to have a strategy, clear-cut and stick to it when we buy investment property.
7. Number crunching: if you are to succeed in buying investment property in the current market, you need to do your calculations. As we have all discovered the lending criteria has changed and now lenders are looking for 25%-30% deposit. You need to be able to demonstrate to your prospective lender that you have built-in contingencies to cover void periods, general maintenance and insurance.
8. Letting agents: we are fortunate in the UK buy to let market that we have several options for letting agents. We have in our experience had the good, the bad and the ugly-this is a specialist area and you would do well to invest the time and effort to interview and test them thoroughly. Let’s be honest we are buying investment property for the long-term and need to ensure that we have the best team around us. Once you have agreed terms you are relying on the letting agent to ensure you have full occupancy of your buy to let properties. Therefore do not skimp on this important factor of your business.
9. Quite often you will be targeted with off -plan properties with fabulous (unqualified) ROI figures. The professional property investor will disregard these figures and carry out their own research to draw a realistic conclusion. Far too many companies advertise properties indiscriminately promising huge returns which unfortunately are totally unrealistic. One important question to ask yourself is why buy properties that developers are marketing in this fashion? If it looks too good to be true, more than likely it will be.
10. Location, where do you buy investment property? Some will say ‘it’s far too expensive where I live’ and go on to purchase in some remote area of which they know nothing about. This is all good and well as long as you carry out your thorough research and you can manage it one way or another. We would suggest in the first instance you concentrate in the UK buy to let market ie: your own backyard there are deals to be found if you look hard enough-let’s face it no one said it was easy.
5No Buy To Let Property Tips
Whilst most people today would walk away from potential buy to let properties due to the fear of unemployment, bank interest rates and a falling market. We are here to tell you that this is an ideal time to buy, a falling market means bargains are there to be had.
1. One of the most important things you need to complete is research, this is where most people generally fail, when we say research, this means research your ideal/potential tenants. Once you have identified the ideal tenant that will dictate the type of buy to let property you need to purchase. After all no matter how good you are at negotiating, if you can’t ultimately find a tenant for your property you will fail.
2. Location, let us assume you’re looking for a UK buy to let property whilst everyone knows how important the location is very few actually realise how to actually pinpoint the correct location. Apply simple common sense and buy properties with confidence, what you need to do is to open your eyes and ears and look around to see where people are working and studying. There is always a requirement around universities, hospitals and shopping centres for rental properties.
3. Financials: you have to remain focused about your strategy that is to buy investment property. This is the critical area where most amateur property investors fall down on, they will look at the property as though they were going to live there without considering their ideal tenant. Far too often slick sales personnel sell them the dream and they buy properties which are totally unsuitable. The most important factor that any professional property investor should do, are your own calculations. Simply put speak to your local letting agent, if necessary telephone as though you were a potential tenant. This information is key to any successful landlord when buying investment property.
4. Once you have negotiated a price for your buy to let properties, decided on the ideal location and the finances stack up you are ready to go. Or are you? How are you going to source a tenant? Most landlords will forge relationships with their local letting agents, if you are fortunate enough to find a fantastic agent, nurture them, pay them well and they will become an asset to your team.
5. Managing your buy to let properties is yet another obstacle which landlords have to make a commercial decision, either they will look after the property themselves or indeed contract out to a letting agent. This will come down various factors such as time, location to your primary residence, finances and knowledge. Again these factors you will need to consider and perhaps you will need to build this cost integration into your finances to ensure you succeed in your chosen projects.
We have all watched the experts on television who are renovating old houses and making huge amounts of money, so it must be true!
If only life were that simple, we would all be carrying out attic conversions, kitchen extensions and general property renovation. But I’m sure that most of us have the common sense to appreciate that to make money renovating property you need to treat it as a business.
First, you have to apply strict criteria to ensure that you buy at the right price in the right location and you can add value to the property, quite often adding kitchen extensions could make all the difference.
Once you have purchased your property you need to apply a strict timetable to ensure the works are completed as soon as possible.
The financials need to professionally organised and all building extension costs taken into account, we would recommend that you always apply a 10% contingency sum for any unexpected works that become apparent when carrying out property renovation.
Another marketing tool we apply is to fix a sign in the window advertising the property, you never know your potential tenant/buyer may live locally and you could even do a deal prior to completion of the property renovation works.
One of our key recommendations when renovating old houses would be to fit carpets, this we believe is the icing on the cake, when your prospective client walks in it just smells right and is well worth the extra cost due to faster completion.
If you are sufficiently good at this you can make a handsome profit and if you are like-minded you could even make a career out of it. Renovating old houses are still available and believe it or believe it not a lot of people are lazy and are quite happy to pay someone a premium to do the work.
Therefore our recommendation is to get out there and find your next property renovation, attic conversion or whatever it is. We have a fabulous opportunity available due to the current financial climate so we all need to make the most of it whilst we can.
