What’s Stopping you from buying investment property?
- Are you financially nice and comfortable right now?
- Do you have a nicely paid job and you enjoy your work?
- Does it seem like investing in property is a good idea, only you will do it later?
- Have you been waiting for interest rates to get better so that mortgages will be cheaper? Maybe you feel you could make more money when this happen?
- Are you worried about how the laws are changing for landlords and tenants?
- Have you heard that all landlords are money grabbers, and they don’t care about the tenants?
- Do you think putting your hard earned money or savings into property is risky?
- Does property investing seem like hard work?, Work that you really don’t have the time to spare.
- Maybe you don’t want to have to learn all the ins and outs of how to invest in property as your life is just too busy?
- Is it too scary given all that happened in 2008 with the property market, where investors lost money and the properties they invested in? Some guys even went bankrupt!
- Aren’t we due another crash soon?
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All of these I have heard many times over the last 20 years I have been investing in Poperty.
They are all statements that come from the fear or lack of knowledge in how it all works.
Please let me answer each one with the knowledge and experience I have gained during my property investment years.
If you are financially nice and comfortable right now it may seem like there is no reason for you to start investing in property to create your income and wealth.
The only thing is that nothing is certain anymore. Look at what happened during covid.
People with fabulous jobs that you would never consider at risk of losing were not getting paid or being laid off. Pilots were grounded, most pilots get a basic wage which is boasted hugely by flying pay. When you fly the plane you get paid the big bonuses.
Some pilots lost their jobs because of the company they worked for not having enough reserves to keep them on. If you had said that having a job as a pilot was risky 10 years ago you would have been laughed out of the house!
Having a income from investments to fall back on and keep you going was something a lot of my mentees were so relieved they had. It got them through the tough time of covid without having too much worry or stress. They knew they could survive as long as it was needed from the income from their properties.
Waiting for interest rates to get better is something you just cannot predict. The government suggest that as inflation and employment figures get better the Bank Of England will reduce the base rate. This is the rate banks use to buy and sell money between them. And yes as it comes down mortgage lenders do tend to offer more attractive rates for the Buy To Let (BTL) mortgage ranges which make it cheaper for you to invest. However, waiting for this isn’t a great idea as you could be hanging about for a long time for them to come down to a rate you think is right for you.
It’s better to structure your deal/purchase in a way that can earn you money even If the rates are higher than you like. This also has the great side effect that when rates come down you will earn even more net cash flow!!
Having a great mortgage broker in your team is crucial. My broker is getting me great rates even though the Bank Of England rate is higher than it has been for many years.
Laws are changing for landlords and tenants.
Yes the laws seem to have changed quite a lot In the last 10 years or so.
When I 1st started buying BTL properties there was no extra stamp duty , whereas now there is 3%, 4% and 6% depending where you buy in the UK.
You could also offset all the interest payments you made on you mortgage against the income from the BTL’s you owned if the property is in your own name. That benefit has gone and in fact they have changed the way it’s calculated so you might pay a higher rate of tax as the take the whole amount f rent as income instead of just the net income.
For about 3 or 4 years they changed the Electrical distribution box material construction to meet the new electrical safety regulation. So you had different regulations to meet each year.
There have been lots of amendments with what and how you can offset costs and expenses against income for BTL’s.
All sounds a bit rough, doesn’t It?
Well, it is If you get stuck in the mindset of “that’s not fair” and “We have always done it like that”.
The best thing to do is look at how you structure a deal/purchase factoring in these changes,
Then your deal works and you still have great income.
Tenant’s rights changes are something that seems to be used as a politician’s football .
Bouncing from one decision to another to try and win votes.
There is a myth, fueled by politicians and news broadcasters, that the tenants have no rights and landlords can do whatever they like.
In fact just the other week I had the BBC on early one Saturday morning before taking the dog out for a walk and there was a headline video that said “Tenant kicked out with just 2 weeks’ notice” … wow I thought that’s something new, has the law changed !! ??
When I watched further it turned out the tenant was given over 6 months to leave and find somewhere else. She hadn’t or didn’t bother to look for somewhere else, so the landlord applied to court and when court possession was granted she was give the final 2 week notice … so she actually had 6 months and 2 weeks’ notice !!! She wanted to be the victim and blame the landlord for her lack of action looking for somewhere else!
I like to look at these things with a “ What if it was me “ attitude.
If I was a tenant and told I had to leave in 2 months (which is the current possibility on
England) then I would be a little panicked which would drive me in to action. I would get on it quickly, viewing and finding a new place and yes I would be quite upset that I had too only I would still do everything I could to find somewhere else for me and my family… The English government is currently looking to remove this 2 months’ notice period from English tenancy law, I think that’s actually ok. In Wales, it’s 6 months.
The rules are still there to evict a tenant if they stop paying rent and abuse the house, neighbors etc etc,
Property is risky or Property investment is Scarey.
This is a very common statement .. Yes property is risky if you do not know what you are doing. Any investment is. What about bitcoin, is that safer if I do it without gaining knowledge and education from real people that are doing it? What about Fine Wine or paintings/Art. I see these investments advertised in the papers regularly …
Will I invest in them? Only when I learn about them, get some education or a mentor/coach, and see how it’s done. Then I will yes !!
This is the same for property investing, it is risky if you don’t learn how to do it properly.
I spent 12 months learning and applying what I learnt at the beginning of my property journey. I had a mentor and coach to help guide me and check I wasn’t making big expensive mistakes with what I was doing. It took me 2 years to buy enough property that generated income to replace my day job.. That was my goal to replace the day job income. I personally don’t think I could have got there with out learning from the guys doing it and having the support and help from my coach and mentor.
I have friends who have also invested in property with out doing it this way and when we compare notes they have taken 10 years to get where I was in 2 along with a lot of costly mistakes along the way.
It is possible to do it on your own and I totally understand that some people prefer that way.
I knew I had to learn all about it and be supported all the way to make sure I did it right.
Once I achieved my goal in property investing, I was asked to coach and mentor for the organization that trained and supported me. That was 8 years that I loved. Then covid hit and I decided to carry on teaching, coaching, and mentoring only for my own company.
Knowing I have been part of someone’s property journey to success andbeing there to support and help them, is what makes me buzz with happiness.
I hope this has been a useful article ?
If you have any questions or want to talk more about property investing then please book in a call with me , I would love to chat with you.
You can book at https://cleverpropertyinvesting.co.uk/contact-us/