I was extremely fortunate to learn about the ‘power of property’ at a very young age. From that point, it took us just seven years to build a portfolio, which could really supplement our lifestyle and give us the choices we were looking for. It was then that we really understood ‘why property works’. We have learned a LOT along the way, so much so that I've written a book about it. Why Property Works
was written and designed to help you make the most of being in property, whilst making sure you’re going about it in a way that is right
. Over the course of the next few months, I will be sharing some chapters from the book, some of the best things I have learned and perhaps more importantly, the things to avoid!
Firstly, I thought I’d give you a glimpse at the reason I went into property and what it has meant to me. It all started back in 1994. I was studying at Music College in London and was busy earning my way through with odd jobs, as many students do. When we worked out how much we’d be paying in rent versus paying for a mortgage, the difference was almost double! We felt the most logical thing to do was to see if we could buy somewhere. Together with our meagre savings, a student loan and raising a mortgage on my partner’s salary, we bought our first flat. At the tender ages of 20 and 21, we had embarked on what has turned out to be a fascinating journey!
After five years, the property doubled in value and we moved into a house, which again doubled within three-four years (those were the heady days of the mid-late 90’s, early 2000’s!) To cut a long story short, we decided from that point (in 2001) to venture into the world of property investment and forge an investment strategy, which we could work alongside our careers.
When looking at building your
property business, here are some really important things to consider:
The ability to raise finance and fund property deals in the current marketplace is all-important. You can check what your current credit score looks by using a credit checking website. You can generally get a free trial and check out your credit score so you know what lenders will see if you apply for finance. Speaking to a whole-of-market mortgage broker who specialises in buy-to-let or development finance is also key to knowing what your options are.
- What is your current family situation?
Being single means that you have the freedom to throw yourself into property activities. There are benefits to building a business on your own, however, it is important not to underestimate having support along the way. If you have a family to consider, then you must really think about the amount of time you will spend. If you do things properly, you will be committing yourself to evenings of research and viewings during the day, amongst many other activities. Make sure you take into consideration the impact this will have on your family.
- How many other time commitments do you have?
Are you working full-time or part-time? Do you already run your own business? Do you want to have time still for hobbies and other activities? Building a property business takes time. The sooner you can rationalise how much time and when you'll spend it will give you focus. Becoming more efficient and effective with your time is critical to your success.
- What are your logistical implications?
Depending on your overall strategy, you must be aware that logistics come into play. If you are keen on a cash flow strategy, then typically, there are certain parts of the UK which lend themselves better to high-yielding properties. If, however, you live in London or the South East (which is usually more of a capital growth region), this may prove to be logistically trickier. You must know how far you are prepared to travel once everything else is in place.
The point I want to make is just that whatever you decide, make sure it's going to work for YOU and those you care about.
These days, many people are looking for alternative ways of securing their financial future. Long gone are the days of a ‘job for life’ or even steady and reliable pension provision. Property is a rare asset class. It is tangible, holds inherent value, has the potential to outperform other asset classes, and provides an ongoing income. You can leverage it and increase its value in a short space of time, if you know what you’re doing. In all, it is a fantastic ‘tool’ for true wealth creation. If you’re learning how to maximise your property potential, continue to watch this space!
In the meantime, I hope you enjoy your summer and look forward to posting again next month.
All the best,
Hazel de Kloe
Property Investor | Property Mentor | Speaker | Author
The contents of this article are for educational purposes only and we make no recommendation of any particular investment. The price of property can decrease as well as increase and you make any investments in property at your own risk.
© Why Property Works 2014 | www.whypropertyworks.co.uk