So..you want be a Property Investor?

The question you need to ask yourself is WHY?

Is it to become financially free?

Is it to save for your future?

Is it to just give you a little extra income each month?

How you answer these questions can affect both your destination and the route to get there!

So do I become a Landlord or Property Investor?

You may think ‘Well…both of course, because isn’t owning a property investment the same as being a Landlord?’

Well, you can be both if you like, but if you’re not a fan of dealing with tenants, changing taps, chasing people for their rent, etc. then perhaps the life of a Landlord is not one for you. That doesn’t mean you can’t be a property investor though. The only difference is an Investor will leverage the skills and time of others and employ someone to manage their property portfolio for them (either a property manager or estate agent) and a Landlord will look after it themselves.

Being a Landlord is a much more hands on role - you will need to keep yourself up to speed when it comes to regulation, legislation and local laws. Some councils require landlords to be licensed - if you’re not licensed you may end up with a hefty fine! The other thing to take into consideration is that you are on call 24/7 for any problems.

·        Power goes out etc.

·        Tenant gets locked out

·        Boiler breaks

They’re all your responsibility as a landlord. You can’t ignore the calls and hope the problem will go away…it won’t!

So firstly think about what you want…

The next thing to think about if you want to become a property investor is, are you doing it to become financially free? Being financially free means that if you didn’t receive any income elsewhere, all your monthly outgoings would still be covered. This is the biggest single reason why people decide to invest in property over other investment options, due to the passive income and capital growth potential.

So presuming this is your reason, firstly you will need to work out what your Financial Freedom Figure is - this is exactly what you need each month, in order all those outgoings. 

We say there are 3 tiers of financial freedom:

1.     The first phase is having enough money to replace your living costs - this could be your mortgage or rent, bills, car costs, credit cards, food, phone, gym membership etc.

2.     The second phase would be enough money to cover everything in the first tier, plus enough to cover holidays, meals out, trips, gifts and other non-essential living expenses.

3.     The third phase is where you are generating enough money to do everything in tiers one and two, with additional money for further investments, luxury purchases, all bills for you and your entire family each month and year…basically you don’t need to have to worry about money ever again!

Of course, we’d all like to get to tier three quickly, but we need to start at tier one. The reason being it’s a realistic goal, i.e. far less daunting. We’ve all heard the phrase ‘Rome wasn’t built in a day‘ right?

Once you have worked this out, you can put an investment plan in place to it happen.

This involves putting the right structure in place from day one to ensure everything runs smoothly, not heading off down a path that in five years’ time would leave you looking back and wishing you’d done things differently. With a sound investment plan you’re also staying focussed and minimising your investment risk, because the decisions you make are all aligned to the end goal.

Next, you will need to build your team. By this we don’t mean you need to employ lots of people, we mean having your accountant ready, a mortgage broker, solicitor, property manager, property sourcer (particularly if you’re looking to build a portfolio relatively quickly), builders, plumbers, electricians…the list goes on!

Unfortunately it ain’t as simple as logging onto RightMove for 5 minutes, finding the property you like, ringing the bank and signing a bit of paperwork, but you knew that already right?

Then there’s steps 4, 5 and 6, (but don’t worry about these until you're well on your way to completing stage three,) mind you, if the foundations (i.e. steps 1, 2 and 3) aren’t set out properly, then steps 4 and 5 can take you to a place you may not have planned to be!

So as you can see, there is a lot you need to think about (and do) in order to build a successful property empire. But at the same time it doesn’t have to be stressful or daunting.

Let us help you put this plan in place, ensure your investment funds go that little bit further and help you achieve that Financial Freedom Figure much quicker. As a Boutique Property Investment company we don’t work on mass. We work with individuals at all stages of their investment journey and provide the very best service at every level. We Source, Refurb, Manage, Let, Portfolio Build and Educate.

For advice on how to start building your portfolio and future freedom today, get in touch with Tanner Hassan Hicks on 0161 818 2234.