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The Property Voice Podcast - Musings: 15 things every property investor should know
Here are some of the general principles of property investing in what I am calling the 15 things every property investor should know…including: it’s not an investment, join the dots, our happy ever after and if I had my time again. This is my list of things every property investor should know; what’s on your list?
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Resources mentioned
Property Investor Toolkit – here is the book link on amazon.co.uk & amazon.com in case you would like to get yourself a copy to accompany this series
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Transcription of the show
Hello and welcome to another edition of The Property Voice Podcast, my name is Richard Brown and as always it is a pleasure to have you join me again on the show today.
Summer is upon us, and I guess many of us might have our mind set on a sunny & sandy beach, a nice pool &possibly a glass of something chilled in hand. As a result, I have some summer soundbites of property insights to share over the next few weeks. We are going to start by looking at the 15 things every property investor should know, which is inspired by something similar I saw on Quora the other day.
So, here we go…
Property Chatter
What every property investor should know…
Here are some of the general principles of property investing in what I am calling the 15 things every property investor should know. I have collected these together in no particular order, along with just some of the wider considerations.
| Principle | Considerations |
| 1. It can set us free | Financial freedom, lifestyle choice or ‘employment optional’Supplement our pension & leave a legacyHelp others in need such as friends and family or good causes |
| 2. It’s really not an investment | It’s active not passive, even if we pass on many activities to othersNot many investments will we have to take care of: cashflow, sales & marketing, unpredictable revenues and costs, financial planning & regularly occurring systems & processes such as finding tenants, doing the books, maintenance & repairs and so onSo, it’s really not an investment; it’s a business |
| 3. The buck stops with me | We can delegate authority but we always retain ultimate responsibility & accountabilityDo, delegate or distribute tasks to others but always retain management & control over what we & they do |
| 4. The 4 Ps of property: people, property, process & profit | People – tenants, advisers, agents & tradesProperty – location, maintenance / repair & appealProcess – finances, tenanting, legal & compliance systems to manageProfit – more revenue than costs = profit, more money in than money out = cashflow, more assets than liabilities = net worth |
| 5. Who loves ya baby? | The only person with your best interests at heart is you.Others can support, reap the rewards or even undertake tasks for us, but the person that cares the most about you and your business is ultimately & always you. |
| 6. It’s a moving target | Property & financial cyclesProject time & cost overrunsChanging rules & regulations |
| 7. Join the dots | It’s all interconnected – finance, planning & licensing, prices and rents, taxationBut it could also be mutually exclusive too for example it may be better from a tax point of view to invest via a limited company, but lenders don’t like lending to start ups…there is often a trade-off to be had therefore |
| 8. Where there brass there’s muck | Yes, that way round, watch out for greed, robbers & scandal |
| 9. Absolut is only a Vodka | Protect the downsidePlan for risk and changeHave contingencies, savings & insurances |
| 10.It’s a horses for courses thing | BTL is a long-term steady-as-she-goes strategyHMOs & short-term rentals are high management, high cashflow modelsTrading is a project-based ‘lumpy’ cashflow modelRent-to-rent is a cross between the Promised Land & Pandora’s Box, with high potential income from a low funds base but high complexity too |
| 11.It’s all in your mind | Mindset can make or break youPositive, solution-oriented, calculated risk, dedication, determination & commitment are the minimumsFUD will hold you back – fear, uncertainty & doubt |
| 12.Actions speak louder | Reading, talking & dreaming will never make us an investorWe have no experience without action and without action we have no experienceWe have to step out and do something, don’t let perfect be the enemy of good |
| 13.Our happy ever after | Our cashflow gives us peace of mind for todayOur profit gives us an income for tomorrowOur net worth creates our wealth for evermore |
| 14.For richer or poorer | The principles of leverage, compound growth & inflation can be used to make us wealthy, or alternatively against us to make us poor |
| 15.If I had my time again… | I would have started sooner |
The first of our summer soundbites for you then, with the ‘15 things every property investor should know’. Tune in over the next few weeks for summer soundbite series. Meanwhile, the show notes are available at our website www.thepropertyvoice.net
That’s all for now, but what other principles should be in this list of ‘what every property investor should know? Drop me a quick email to podcast@thepropertyvoice.net and let me have your list of top tips.
Right now though, thank you very much for listening and until next time on The Property Voice Podcast…ciao-ciao