New Values

When we were in Thailand a couple of weeks ago, I was thinking that six pounds for an hours massage was really good value for money. When I learnt that the average construction worker only earns four pounds for a whole days work it then seemed expensive. At the time it didn’t strike me as anything other than a miscalculation of my values but since then as it’s turned over in my mind it has created different thoughts. We all have to value our own time according to its potential to earn, try as we might, we have offered what we consider to be the best advice in the business for free over the last six months with few people accepting it and even less appreciating it. We can’t change people’s perception of value and if they would rather pay for what we are willing to give them for free so be it. There aren’t many people who are in the position we are, with the years of experience who are willing and able to help those new to the business. Maybe it’s just down to understanding how to value something but as our time is now being enveloped in other projects it’s unlikely that we can continue to keep giving indefinitely as we have tried to. It makes sense periodically to revalue everything just as you would a property to get more leverage from it. When we revalue ourselves we can often have an awakening of what people take for reality, like TV programmes that are made up of half-truths, novelty value and behind the scenes connections.

 

Real life is not like television, or it could be considered more like a long running serial where you are the star and everything that can happen actually will happen to you, in the small area you frequent. So many people are led a merry dance through misinformation, poor decision making and mismanagement that we often shake our heads in pity. Yet it simply doesn’t have to be that way if we just value our goals, our team and our planning. There are many people who are struggling with debt for whom the idea of investing in property is completely out of reach. It takes a lot of determination to get yourself to financial freedom but if it’s your goal don’t let anybody stand in your way because with help you can become wealthy through property quicker, easier and more enjoyably than just about any other means unless you have a remarkable invention or some other deep routed passion. Being passionate about what you do is important to keep you going as the learning only comes from the bottom up. Read as much as you can; not just property books but general business and personal development too. Everything helps your learning but as we say time again, don’t believe anything you hear, anything you see or anything your read unless it agrees with you own common sense.

 

Revaluing everything periodically means looking at your investments across the board including pensions, money on deposit, share values, managed funds, the whole nine yards, and it’s usually best to pick off the worst performing ones first. Losing just one pound per month on an investment isn’t an investment it’s a liability. We can compare property to just about any other type of investment and other than the very risky opportunities; over the long term property is a sensible investment. When we have a business, and don’t forget that property investment is just that a business, we have to make sure that whatever we put in to it comes back to us preferably many times over. There is little as expensive as procrastination, putting off and being indecisive just lets the opportunities sail away. However, expensive mistakes in property are generally long term and potentially crippling so there are certain areas we have to value more than anything when we start. It’s no good trying to blame somebody else later, if we get the fundamentals wrong we’re likely to be in hot water before we get going. A good basis for strategic thinking as a new property investor is asking yourself ‘who do I want to deal with as tenants?’ This will help you to work out where and what type of property to invest in.

 

There are seven golden rules that most investors know instinctively, firstly it’s so important to buy the right house in the right area, generally an area you know well that is easily accessible for you and where it will rent to the type of tenants you want to work with. Next buy at the right price and preferably with a discount on a RICS (Royal Institute of Charters Surveyors) valuation. You’ll need one of these for the mortgage and usually via the lender so don’t pay twice for it and never take an Estate Agents valuation as being right.  Thirdly make sure you know how much it will cost to repair, alter or kit out the property for the prospective tenants. Then you must make sure that there will be sufficient cash flow from the rent to cover all expenses and have a suitable percentage over to make it worthwhile. Next you must make sure that there is actually a big demand from the type of tenants you want for the property you intend to buy. Many people miss this stage at their own peril. Sixth point is to make sure you put as little of your own money into the  deal as possible, quite simply the less you put in the more you will have for other opportunities and providing you are borrowing right, the better return you will get on your investment. The last rule is to make sure you have a contingency fund in case anything untoward happens. Follow these principles and you’ll stand a better chance alone or of course you could still get hold of one of our team to help you. There are no guarantees with anything in life and whilst the rules will help every time it doesn’t mean you will always get them right so preparing for the worst is often the best approach.

 

Always value everything especially your own time.

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