Why did I invest In Property?

There are many types of investment and investment styles to choose from but why did I choose to invest in property?

I could have invested my savings into an ISA or other Savings Account or I could have become the next Gordon Gekko and invested in the Stock Market or even got caught up in the Crypto Currency bubble a few years ago so didn’t I?

The reason I didn’t choose to invest in an ISA or Savings Account is quite frankly the interest rates on offer just didn’t and still don’t excite me and I would have been better just keeping the money under the mattress. In my opinion the stock market seems to be erratic and a higher risk strategy and I haven’t a clue what crypto currency is, how it works and to me it holds no intrinsic value.

So why property?

The reason I choose to invest in property is quite simple in that I can touch and feel what I am investing in and I can see exactly where and how I can add value. I’m more in control.

Furthermore, when you look at the richest people in the UK at least 1 in 6 people owes their wealth to property in some way. Lord Sugar for example originally made his name selling computers but he wouldn’t be the billionaire he is today were it not for his skilful London property deals.     

Here are the 5 core reasons why I chose to invest in property.  

1.    Capital Growth

When I started out I knew this was going to be my pension so therefore I was looking to buy property and hold it for the long term and benefit from capital appreciation. What gave me this confidence? Well over the last 60-70 years history has shown us that property prices have increased and on average they double every decade although there have been a few price corrections and major dips along the way. Since the crash in 2007 property prices particularly where I am based haven’t seen anything like the rapid rise that the previous 10 years had seen however, am I worse off? Far from it. Every one of my investment properties have all benefited from capital appreciation so much so that I have been able to refinance and pull most if not all of my initial investment back out and reinvest in more.

My first purchase was very much a turnkey investment meaning it was already tenanted so from the first day I had the keys I was earning money. I’ve since moved to properties that are either Below Market Value where I benefit from immediate capital growth or properties where I can add value and add the capital appreciation through renovations and refurbs. This has been a great learning curve with my latest project being a Below Market Property which I have completed a thorough refurb and now after refinance I have managed to pull out not only the development costs but almost all of the initial investment giving me a near no money down deal.

The market will always have its ups and downs and no doubt Brexit will have an impact on property prices this year but I know in time with my buy and hold strategy the properties will increase in value again over time.

I’m confident my pension pot is safe as houses.  

2.    Income it Produces

As mentioned my first investment was already tenanted so I had instant monthly cash flow from day one. Not only am I therefore benefiting from capital appreciation but I am also generating a positive monthly cash flow each month from my property portfolio. My criteria has changed over the years. When I started I was looking for properties that could generate at least ￡200 a month positive cash flow after all expenses are taken into consideration (I.e. Mortgage repayments, management fee, and building insurance). I now only buy properties that will generate over ￡300 a month positive cash flow with some producing over ￡400 per month These are all single let units so I could even increase the net cash flow monthly by looking at HMO’s or Serviced Accommodation which are strategies I am also investing in.

The first thing to consider when you’re buying property is what your end goal is and therefore what do you want the property to bring in monthly. I.e. if you are looking to earn ￡2000 a monthly cash flow and each property generates ￡200 a month you are going to need to buy or control 10 houses which can take time. Quality over quantity.

When buying for monthly cash flow it’s essential that you do your research and due diligence and that you are buying in an area of high rental demand as you don’t want your property to be sat empty for months on end as this is only going to eat into your profit. Remember just because your property is worth a lot doesn’t necessarily mean that you are going to earn more in rent. The average UK rental value (excluding London) was ￡763 in December 2018 and the average cost of a home was ￡214,000. This therefore gives you a Gross Yield of 4.2%. By buying lower valued properties in strong rental demand areas I’ve been able to secure single let yields in excess of 14% and an average of 10%

3.    Cash Flow

When I first invested in property I was focused on Capital Appreciation and the Monthly Income it can produce. Over the years and by immersing myself in the industry I have also benefited from the multiple streams of income property can bring. I get income from referrals within my power team and also income from Buy to Flips. I’m now using my experience and knowledge to source properties at a great price and packaging deals for investors for a fee.

4.    Business

As I have said before when I first started in property all I was looking at was the capital appreciation and monthly income I could generate from property. Over the years my goals and aspirations changed and I eventually saw that I could use property as a way of changing my career and move into property full time. I’m now using my knowledge and experience to pass on to professionals that are equally interested in investing in property. My business is helping source properties for cash rich and time poor professionals and invest in property developments whether that’s individually or through Joint Ventures.

5.    Lifestyle

This wasn’t something I considered when I first started to invest in property. However, since I have invested in property I have been able to change careers which has improved my lifestyle as I have gained more freedom and choice and able to spend more time with my dogs (Douglas and Bella).

I am currently re-investing what I earn from the properties back into the business and looking for development opportunities but I will treat myself from time to time with a holiday.

If you’re after more time with your family or better holidays or a better car etc this can all be achieved through investing correctly in property. Think about what your aspirations are and what you hope to achieve and this will help guide you for your first or next investment.

In summary property Investing has enabled me to not only benefit financially but has also allowed me to turn my passion and genuine interest into a business that’s allowing me to pass my learning’s on to others to help them succeed.

My focus is on serving those who wish to invest and assist in getting you started, or by helping you build a property portfolio by removing the learning curve and doing the hard and time consuming work on your behalf.

If you have managed to get this far and you are interested in investing in property and want to work with me then please get in touch and let’s see if we can put you on the road to success.   

Thank you for reading