Property Investment Talk
I’m conscious we are well into New Year and I’ve not engaged in any property investment talk. Landlords across the UK are no doubt head down and knee deep in their landlord tax return paper work. I’ve not started mine yet as always it gets done but no doubt I will go to the wire as it always does and I will inevitably mean submitting from a pub whilst downing a pint of excellent British Craft Beer. So here is a little bit property investment talk to wet your property investing appetite for the coming year.
Property investment lessons
I’ve just returned from a fabulous 2 week holiday (my second in 2 years) in the little known country of Cape Verde. For those not that familiar with the geography of Africa, it’s off the coat of Gambia and Senegal in the Atlantic. So what connection to international property investment has that got you may ask. Well this is the 2nd time I’ve come back from holiday having brought a property investment in this emerging African country. This country, like many in Europe suffered from the boom and credit fuelled property bubble that hit the rest of the world in 2008 but just as in the UK property investment market is now slowly recovering. The young youthful African economy offers some interesting opportunities for the property investor and also some salient lessons for all property investors on where and how to buy property. There were a lot of 1st time property investors that got burned by buying over inflated packaged property investments off plan who are still nursing massive investment losses. It also proves my point that there is much more money to be made by finding a buy-to-let (BTL) property bargain and in real property investment i.e. putting your money where your mouth is than talking about it. What do i mean?
Property Investment Talk
Over the last 10 years of Property Hawk we have seen the way the internet is reshaping many aspects of property investment and running a property rental business. I rejoice in such things as the abundance of cheap and free information from the land registry which now means that the property market in the UK in terms of property prices is more transparent than ever. The property data out there on sites such as Rightmove and Zoopla is fantastic although data on rental yields can be a little more patchy. We have recently seen the rise of prop tech where companies promise that they are going to develop ways of doing property more simply and take the hassle out of property investment. Cock! If I had a pound for every email from a new start up prop tech company with some weird acronym like rumba or choopa or something similar which promising to make property investment hassle free and seamless through their unique proprietary technology I be a much richer man. The reality is property investment is fiddly, messy and involves a little bit of hassle from time to time. But rather than complaining potential landlords and property investors should celebrate this. Why…
Because it means that the internet with it’s power of creating huge all providing digital platforms which can deploy vast financial resources become bigger than the people and the markets they seek to serve will never be able to take over and undermine the small property investor. Providing idiot politicians like Jeremy Corbyn and his brand of new old Labour is it that old new Labour keeps their meddling mits away from the property investment market it still offers opportunities for hard working individual to carve out a decent living and provide for their retirement in a way that many of us without a golden pension pot will never have.
I made £7500 by going on holiday
Property investment talk is cheap as I said. The Prop Tech businesses that have emerged over the last few years such as Rentify, Upad have all burned a huge amount of investor cash. I know the people involved. One of the few profitable Prop Tech businesses is Letting A Property and I certainly know from owning and running Property Hawk that there is very little money out there for talking about property. Wonderfully for landlords there is so much free information out there so why pay for it? Take a look at Property Hawk’s own Landlords Bible to a 200 page free book and resource about property investment.
I am aware of various property investment meetings, groups and seminars but I’m also sceptical about landlords and property investment groups and seminars inhabited by sharks, conmen and exploited individuals on the make. To my mind if you on to such as good thing why go and tell the rest of the world about it. Just do it yourself and not talk about it. If you also look at the credentials of many of these so called property gurus then they are dubious to say the least.
This brings me back to my bold statement about making £7500 by going on holiday. My latest experience of property investment highlights one important principle of property investment. I once read one bold statement on buying below market value (bmv) property that you make your profit when you buy not when you sell. In my case I’ve just brought a 2 bedroom holiday apartment in a prime spot on the island of Sal for £45,000. Looking at properties in the area it is probably at least £15,000 under what it’s worth and with a little bit of TLC much more. So on a 2 week holiday in glorious sunshine away from the snow and the ice I’ve made more money than running Property Hawk for a year. An illustration again that whilst property investment talk is cheap a well executed property investment can make a great deal of money instantly and with relatively little effort. So are there any common property investment principles and tips on finding investment property that apply what ever and wherever you invest in property. I think there are.
Property investment principles
On holiday in between picking up a property investment bargain I also had lots of time to a little bit of reading on investment in general. I have been reading an excellent publication called Harriman’s New Book of Investing Rules which brings together a whole series of experienced investors and their tips on investing. What is apparent is that there is no one way of investing successfully. Often these investors put forward contradictory approaches. However, I do think there are some useful read across from these investors in financial products to successful property investing. There are many many different approaches and no one way. What is key is developing a strategy and approach that works for you. Over the years a have heard about a whole range of investment styles and here are just a few:
Property investors flipping investments so buying off plan and then selling immediately hopefully for a profit. Property investors looking at buying in a very local area, other investors looking at buying across a city or even around the country, property investors buying new apartments to let out, whilst others buying rocks at auction to do up and then rent out. What is key for all these property investment styles is that the individual investor gets to understand the market in which they operate by extensive research. You get out what you put in.
- Property investing is not a zero sum game. I refer to the BMV example of my current holliday property investment. If you as an investor have brought cheap and obtained a bargain then the seller will have sold cheap and lost out. That I”m afraid is the law of the property investment jungle and there is no escaping it but always treat people with respect
- Successful property investing is about the long-term. You can make money fast as in the stock market but to secure the best returns you will need to be invested in the property market for a considerable period of time. I would say a reasonable time horizon would be 20 years plus. During that time you will have seen a boom, a crash, a recovery and should generally be showing a reasonable profit on your property investment.
- Don’t expect too much. Don’t expect to become rich overnight.
- Avoid expensive fees and charges. I have written before about leaseholder charges which outstrip increase in rent and can seriously deplete your long-term investment returns. Studies of the stockmarket have revealed that when it comes to maximising your investment returns it is all about your dividend income and reinvesting this back into your investment pot. Similarly, with property investment it would be a case of maximising your net rent and then being able to use this to reduce your mortgage debt which then intern increases further your net rent and increases your cashflow.
- Don’t believe professionals. That is not to say that you should disregard and take on professional advice but very few experts have a crystal ball so don’t take what professional investment advisers say as gospel. They can’t predict the future like anybody else and quite often know no more than the well informed and well read amateur.
- Enjoy your property investment experience. Like anything in life if you view your property investment experience as a game to be enjoyed it will be easier, far more fun and ultimately rewarding.