Archive | April, 2013

When’s The Best Time To Invest In Property?

26 Apr

Every day there are articles in the newspaper about property.  House values are rising, falling or stagnant.  Mortgages are too cheap, too expensive or just not available to the average buyer.  Pick up five different newspapers and you will read five different versions of what is supposedly the current situation in the property market.  Interestingly, none of the articles are written from the perspective of a property investor.

Property investors consider many things before buying a property and letting it.  One of the most famous sayings is location, location, location yet for most professional investors location is only a small consideration for why they became property investors and what they expect to achieve with their investment.

Britain is an island.  There is a limited amount of land and an even smaller amount is made available for building houses.  Consequently there is more demand for housing than the country has available.  Today we face the situation of insufficient housing to meet the needs of the population.  Private rentals have proved more popular as councils have insufficient stock (property) to meet demand and insufficient capital resources to purchase more.  Private investors help to fill a void.

It has been said and widely quoted that on average house prices double every 7 – 10 years.  In the UK this is an understatement as house prices increase on average at a higher rate.  As an example a couple of years ago I was driving past a house that was for sale.  My step-father, who was in the car with me, said when he was in his late twenty’s he had purchased the house for £2000 and sold it for £4000.  He believed he had made a good investment as he had doubled his money.  Nearly fifty years later the same house was up for sale for £269,000.  The house price had on average more than doubled every decade.  Property investors are looking for good capital growth over a long period of time.  Many investors with multiple properties have the exit strategy plan of investing for twenty years and using the capital growth on one or two properties to pay the mortgages on the remaining portfolio.

Income is another important consideration when buying an investment property.  To begin with there may be little income from a rental property but as time goes on and inflation takes effect  net income on a property today of £30 – £40 could be net income of £300 – £400 in ten or twenty years time.  Consider the minimum wage in the year 2000 is was £3.60 and from October 2013 it will be £6.31.  As wages go up the cost of living goes up and property rentals are no exception.

So the next time you read a newspaper article about property ask yourself this question, ‘When is the best time for me to invest in property?’  I hope you agree its now.

More information on investing and property investment can be found in my books

 Surviving 2013 A Financial Guide and

How To Make A Living From Property

both books are available from Amazon in digital format or paperback.


Plan For Wealth

11 Apr

How many times have you said ‘If only I had more money’ or ‘I can’t afford it’?  If you are honest with yourself it has been too many times.  Becoming wealthy doesn’t just happen you need to plan for wealth.

April 5th was the end of the financial year in Britain.  We are now a week into the new financial year and there is no better time to start planning for your wealth than now.

In previous blogs we’ve discussed the asset classes and how to make money.  We’ve discussed having a goal to create wealth and setting up as much as possible on an automatic system.  We’ve also discussed compound interest and how it needs time to work its magic.  However, if you don’t plan to be rich it is highly unlikely you will ever be rich.

If you study the habits of the world’s top billionaires they all have one thing in common.  They pay themselves first.  So what does this mean and how can you do the same?

Paying yourself first simply means you take a certain percentage of your income or profit and you invest that money into income producing assets.  You then adjust your expenditure to live on the balance.  It is surprising how easy this is to do.  If you have a job, try asking the boss to deduct a set amount from your wages each payday and pay it into an investment account.  Most companies are happy to do this for you.   If you have a business, try working out your projected profit or use last years figures then decide on a percentage of the profit to set aside on a weekly basis.  It could be 1% or 50%.  If you are on a benefit try putting £1 aside each payment date then once you have £10 put it into your investment account.

Learning to live on the balance is a skill that needs to be learned.  Regardless of how much money a person has they will always spend up to that allowance or beyond.  Mastering your finances and living within your allowance takes times but does work.  Whatever you decide to set aside – £1, £10, £100 or more – do it for six months then increase the amount and learn to live on the lesser amount again.  Study your spending habits and you’ll be surprised how much you spend money on items that you don’t actually need.

Whether you want to be rich or just have a more comfortable lifestyle you need to plan for wealth.  Pay yourself first and invest in income producing assets.   Learn to live on the balance.  Then review your progress, increase your savings and start the process over again.  You’ll be surprised how quickly your investments will grow.

More information can be found in my book  ‘Surviving 2013’