Are you ready to invest in property?
Raj Sharma
Print ? Property Investing ? Business Networking ? Property Networking ? Property Training for Business Owners ? Event Speaking ? Property Training and Coaching
As business owners, many people struggle with knowing if they are ready to invest in property. They have the desire and they know the benefits of having another source of income and creating wealth for the future.
But often they think they don't have the time, they don't think they have the money - and they just don't know where to start!
Welcome to the latest edition of The Business Owners' Property News, my weekly newsletter dedicated to helping business owners get started in property investment. Today we are going to look at the questions we ask business owners to see if they are ready to invest...
What is your current work status?
Are you self employed or a working professional? Are you a company director or a partner in a business? Assessing your current status is vital - are you happy in your current role? Is property investing something you want to replace your current work or do you see both growing side by side?
What responsibilities do you have to your current work and perhaps business partners? is your business very new or is an established enterprise? How will property investing impact that?
At the outset, we assess why you want to invest in property by looking at where you are now, what you want to change to where you want to be and will property investing help make the changes you want to see?
Describe yourself (Family, hobbies, where you live?)
Getting a better picture of who you are as a person, your family life and interests is very important to see if you're ready to invest.
What's your attitude to risk?
Do you have young children that need lots of attention and will property investing impact upon that?
Will your current hobbies and interests help your property business?
Do you live near a large town or city or are you more remote?
Exploring more about yourself will give you a great idea if property investing is for you or tell you what changes and sacrifices you may need to make to pursue property investing.
How many hours do you have available to do property?
Property investing is time consuming when you start out. You need to dedicate time to viewing properties, evaluating deals, making offers, education, research, networking and countless other things!
How much time do you have in a week to do all these things?
How much time can you take out from your current business to work on your new property business? How will this impact the current business?
How much capital do you have to invest?
A key question for an industry that requires capital to invest in property!
How much cash do you have to start with? Is there cash in your business that can be used or personal savings? Business profits can be deployed into property investing but you need to make sure current capital needs for your business or personal needs have been satisfied and there is spare cash to invest.
It's important not to stretch yourself just because you have a burning desire to invest in property.
Remember the reasons you want to invest - it's not to get yourself into financial problems!
What other capital do you have access to?
Can you access cash tied up in other assets? Maybe equity in your home or a loan from family? Again, do the sums, do not take risks you or a partner are not happy with.
Finding capital is a continuous requirement for a property investor and you need to have systems and processes to generate capital.
On our 12 month programme, we have a module on raising private funding, but this needs to be done responsibly and with a plan to repay the cash to your investor or funder.
Have you checked your "mortgageability" for investment mortgages?
Last week we talked about key partners in a property business and engaging a good mortgage broker at the outset is crucial to assess if you can get a buy to let mortgage, how much you can borrow and how much you can afford.
A mortgage broker will let you know the property business models you can or can NOT get lending for and this will guide you where to start.
An assessment will highlight any problems and how you can fix them.
In the world of lending, most problems can be overcome - but you need to be honest with the information you provide so issues can be tackled head on.
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Hands on or Hands off? How active or passive do you want to be?
We've already discussed that property takes time and if you have the right skills, you may want to be very hands on at the start of your property venture. This will need more of your time than being completely hands off.
In my opinion, the aim of a property investor should be to have a hands off property business that is delivering you great returns.
The journey there may well be more hands on at the start, but developing a trusted network that can free up your time to work ON the business rather than IN the business will accelerate your growth.
No different from any business!
Identify the areas/locations and types of property you are looking to buy?
We touched on this before. You may want to start off locally - if there are all the fundamental features in your area that makes it a great investment area - transport links, local employers, investment in infrastructure etc
What business model will work in this location - single lets, HMOs or serviced accomodation?
If you live in a remote area, that's not a problem - you may just have to identify the nearest area that is worth investing in and develop your contacts there.
What property contacts do you already have, and what contacts do you need to acquire?
We have said many times that a great network is critical to succeeding in property.
At the outset, you should look at who you already know that can help you - and therefore identify which contacts you need to make.
Leveraging existing contacts is a superb way to kick start your property journey with people that already know, like and trust you!
Whats the highest vision or dream you have for yourself?
It's good to have a BIG goal - one that almost scares you!
"I want to eradicate homelessness."
"I want to be the No 1 provider of student accommodation in the UK!"
"I want to help every nurse in the UK to buy their own home."
Your highest vision will draw out your values and help you determine your property business model and strategy. Do you want to create social housing or shared accommodation? Or will you be focussed on providing families with quality homes?
Having a big vision or dream, based on your core values will help you create the plan to get there and keep you focussed on the way there!
It will give you reason to push through the tough times that you will come across on your property path!
What is your aim for net monthly cash flow by the end of the next 12 months?
You will note that I've put "the money" quite far down the list!
I'm a big believer in that if you can address all the things above and provide value to others in your property business, the money will follow!
But, I'm an Accountant and it's vitally important to have short, medium and long term financial goals. They may be measured as what you need as income to replace your current work or to bolster your current income.
The goal may be the value of property or the equity in it that you want at the end of those time periods.
Having goals that you can measure will determine the key actions you need to regularly take to achieve those targets.
Where do you see yourself in 10 years?
What do you ultimately want out of property investing? The answer is very rarely "a shit tonne of houses!"
It's things like enjoying more free time, travel, helping family, creating a legacy - being happier!
Property can get you there if it's right for you and you are right for it!
Want to take the questionnaire yourself and see if the time is right for us to help you start your property business?
Here's the link....