630: Follow Your Passion To Develop Your Property Investing Skills
This Newsletter is focussed on one key topic:
Follow Your Passion To Develop Your Property Investing Skills
What make’s a successful property investor?
Firstly, there are a few key traits that you need to have to be successful:
· Ability to spot a bargain – financially astute
· Ability to buy in the right place at the right time
· Ability to manage properties – letting, administration and taxes
· Ability to spot risks, cover these off and follow regulations-laws-rules
It also helps to have good financial resources – the ability to borrow significant amounts of money at row rates.
One of the key traits thought is to be passionate – to the point of obsessive – about property and investment in property. Lets explain.
Passionate: If you are interested in property investment, you have to ask yourself – are you “passionate” about it, because it really does help if you have passion or obsession with property. You like working on it, always looking to grow, improve and have high standards. You aspire to live in a gigantic house – it helps drive you having this “dream.” If you are only interested in making money from property – you probably won’t be very successful. You really need to put a lot of effort and soul into property investment. It might mean decorating properties in the evening in your spare time, coordinating contractors and doing reams of paperwork and tax returns – the books. If you don’t dread this – in fact if you like it or love it – you will probably do very well in property investing.
Brilliance: In any walk of life – the very brilliant people have a combination of:
· Skill, knowledge and experience
· Passion (or obsession)
· Hard work
Re-enforcing: One thing normally leads to the rest – they are self re-enforcing. For instance, if you have a reasonable artistic skill, and start to paint, your knowledge and skill will develop with passion (obsession) and hard work. You will then through practice get a lot better – and could then become famous. If you have the skills, but don’t work hard and/or are not passionate (or obsessed) then you will never be a famous brilliant artist. The most famous artists like Pablo Picasso, Francis Bacon, Lucian Freud and Rothko were all obsessive and highly prolific hard workers. They painted for multiple decades in an obsession.
The More You Practice the Luckier You Get: This also goes for property investing – if you are passionate and obsessed about property investing – you will research, read, analyse, then with hard work and some reasonable levels of skill-knowledge you will get better and better at property investing then end up making serious money. But if you think you can make serious money by not working hard at it – forget it – it’s not going to happen. We hate to disappoint you, but you might as well stop. Very few property investors made serious money by not putting some focussed effort and/or hard working into their portfolios. As Greg Norman, the world famous golfer once said, the more he practiced, the luckier he got. If you practice through hard work – you will become a better (or “luckier”) property investor. The same is true in the performing arts like rock music, guitar, theatre-musicals and acting.
Marketing: You need to be able to read the market – know what is likely to be in higher demand and popular versus something going out of fashion and unpopular. For instance, one bedroom flats in London are gaining in popularity particularly affordable flats – with neutral colours, natural wooden floors, new kitchens and shower rooms and secure parking. What’s going out of fashion is flats with strong colour schemes, carpets, old bathrooms, old kitchens – with no parking outside. To be able to see a gapm in the market that needs filing – and where demand is projected to be higher than supply in future years is important. For instance, buying a 1 bedroom flat close to the new Acton Main Line Crossrail station is an example of a property in an area that will see its value and rental demand rise sharply when the station opens and for years to come.
Natural Traits: Obviously some people have a knack in business and property investment – they are particularly savvy at unearthing bargains and doing excellent deals, but if you research, practice, focus and try hard yourself, you will probably find you also get good at it – if you follow certain methodologies. It does not matter what gender, race, colour, age, background you are from – if you can work nicely with people, and have a good reputation with banks, then you can make serious money. Don’t hold back whatever you do. Having good business acumen is partly a natural trait and partly a learned skill – if you are naturally talented then learn lots about business then you will make very high returns in the long run if you work hard in a focussed manner.
Low Ball Offers a Must: One example of a “methodology” – is finding the most central flat in a large city with lowest prices – and putting in low ball offers on 5 properties in a rotating time-sequence until someone accepts. Making sure all the properties are structurally sound but need simple renovation and/or repair to make them look good again and add value. And not being “wedded” to one particularly property – as long as the price is right on your chosen “picks” then you should go with it even if it’s not the one you would necessarily want to live in. Being good at negotiating and knowing when to “walk” from a deal are important traits.
Superficial Grottiness of Properties: For instance, properties with heavy smokers, graffiti, awful decorative colours, old bathrooms and kitchens, un-kept gardens – they all go for massively below normal market value. The trick is to keep you eye on such bargains – then see through the superficial eye-sores – and make low-ball offers for such properties – then simply fix them up – by decorating, tidying, cleaning, repairing, cutting the grass. It means some hard work, but you can make tens of thousands of pounds in value added and rapidly by using this simple strategy.
Victorian Property in Central “Leafy” Areas: Remember in large UK cities, professional high earning people and families like to live in leafy areas that are close to the city centre and good schools, where the houses are spacious but older. So its best to try and focus on Victorian or older housing in nice areas, but in need of re-decoration and some simple upgrades. Victorian and Edwardian properties normally sell for a premium versus 1950s or 1970s properties – but we aren’t building any Victorian properties anymore – they are normally central and in more prosperous areas – and people love the terraces as long as they are fairly specious (not back-to-back in the north). The closer they are to high paid professional jobs the better – and longer term – these are the properties that will continue to climb – particularly if the Tories stay in power. This is particularly true in major cities like Leeds, London, Edinburgh, Manchester, Birmingham, Cambridge, Oxford, Bristol and Southampton. Wealthy young professional families also like to be in areas with large prestigious Universities – and you will find money follows education – so properties around top Universities and Schools will see prices rising faster than areas with poor education or no major colleges (like Barrow-on-Furness, Redcar, Morecambe Bay, Bodmin). But if you look at Lincoln, York, Warwick, Falmouth, Exeter, Lancaster, Bath – you will find towns and small cities with good universities that have property prices rising sharply.
If you are not convinced that property investing is for you – that you don’t like hard work and are not passionate enough about it – that’s fine and a good call – you just need to find something whatever it is that you are truly passionate about and see it through.
Follow Your Passion: For instance, If you love taking care of babies, why not start a creche? If you love fashion – then what about being a fashion designer – or making beautiful dresses or suites? If you love sports – then be a sportsperson – teach sports – coach – set up a fitness school – any passion can make money.
Obsession: The good news for readers of propertyinvesting.net articles is – that we he “writers” are passionate to the point of obsession about property investment – and this steers us into making serious money. But you can’t do it without property research and building up your knowledge-skill base – which is why we set up this website to help fellow investors for free.
Enjoy and Make Serious Money: There is nothing more enjoyable than immersing oneself in a passion that also makes serious money – and you can see it in front of your eyes – every time you do an upgrade, improvement and spend not much money to add a lot of value, whatever you do to your properties. This should give you a real buzz. If you have like minded investor friends and can get exciting and discuss ideas and projects that’s also probably good. It could be with a trusted builder – your contractor – working with them to add value at low cost. They should be up for gibing good advice because it should be win-win – you get building done at low cost that adds huge value at know risk, and the builder gets paid for their services and also make a profit, even if this is just a day rate for their time-labour.
Other Traits: A few other key traits to consider:
· You have to be positive but realistic when you property invest.
· You have to identify and retain good service provides – like builders, letting agents, maintenance people – and dump any underperforming people rapidly. You should not accept poor performance, you should have high standards – always pay on time – as quickly as you can to builders and maintenance people then they will always want to work for you as long as you are fair and reasonable.
· You have to stay healthy – not drink lots or take drugs – to be objective, hard-working and respected by your suppliers and customers. Don’t think you can drink lots and make serious money – alcoholism (and also drugs) are about the fastest way to poverty and early death, make no mistake.
Open Minded – No Snobbery: In property investment, one needs to be very open minded about where to invest in. You need to be very objective. For example, if you firmly believe from your research that the rich will keep getting richer, and the poor will tread water – then you should focus on investing in the wealthy areas like Kensington and Chelsea in London. But if you firmly believe there will be a big re-distribution of wealth to the lower middle classes and working classes – then you might choose to invest in places like Rotherham, Bury, Middlesbrough, Bradford, Swansea and Barrow-in-Furness. Its not good to be either snobby or an inverted snob. You should try and leave your political views out of it – but instead understand what the political parties will do if they are in power.
Labour in Power: Beyond any doubt, if Labour get into power – then property prices will drop across the board – but particularly in the expensive southern areas and London. There would be more public sector spending, more public sector jobs and this would benefit northern and western plus rural areas that are deprived. Inflation would rise, borrowing costs would rise, Sterling would crash and unemployment would eventually rise as the country dipped into stagflation.
Tories in Power: If the Tories keep in power, property prices are likely to keep rising, particularly in the more expensive southern areas and London – where private sector will do fairly well and the public sector will continue to get hammered with jobs losses – as the re-balancing from the high spending days of Labour continues. Inflation would stay more subdued, interest rates would stay lower, unemployment would stay low and Sterling stronger than under Labour.
Draconian Taxes: Now regardless of who you vote for – if you really think Labour are about to get into power – it’s probably best to divest your property portfolio rapidly. Regardless of the political party in power, the building levels will definitely in our view stay very low – particularly with all the Brexit uncertainties and meanwhile the population continues to expanding dramatically. Also the draconian taxes on buy-to-let landlords will almost certainly not be reverses, so a rental crisis will start breaking out shortly – a really big shortage of rental accommodation particularly in London and SE England where businesses are expanding – no building is taking place, property prices and borrowing levels are highest and hence the taxes hit buy to let landlords the most and drive them ot of the market. Just where the most rental accommodation is required, its where there is the biggest tax deterrent for property landlords. Crazy. Anyway, expect rents to rise as inflation keeps rising as oil prices rise and interest rates rise – a massive triple bad whammy for SE buy-to-let landlords many of whom will start to sell up shortly – because of the giant tax bills – leading to an even greater rental crisis.
We hope you have found this Newsletter insightful. If you have any comments or queries, please contact us on firstname.lastname@example.org. All the best for your property investing.