This week, I'm talking to Rob Bence and Rob Dix from The Property Podcast, about how to invest in property. Property is a unique asset class, with its own pros and cons and many ways in which you can invest. But for beginners it can be a minefield, and Rob & Rob tell us what we need to know, and what we need to do, to get started in the best way.
But before we get into that…
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If I had a pound for everyone who has told me: “My property is my pension” I wouldn't need to work. Well, maybe. Property has a unique place in our hearts, and feels less like an investment than the ‘paper' assets I talked about in Session 10, like shares and gilts etc. Over the last 25 years or so, house prices have sky-rocketed. It's fair to say that this was an anomaly in the history of house prices, but there is a generation of investors who want to invest in property, but might not know how to do so.
So Rob Bence and Rob Dix are here to help us, so let's get into the interview. Now, obviously you'll get more by listening to the interview, but here are the notes:
What you need to know
PM: So guys, I'm thinking about investing in property – what do I need to know?
1. It’s not get rich quick
- Be wary of people who say it is
- Watch out for the sharks
- If it sounds too good to be true…
- To benefit from leverage (mortgage borrowing), you have to consider how comfortable you are taking on a long-term debt
PM: OK, so what are the different ways I can invest in property?
2. There are many different strategies to choose from – no right or wrong
- House with Multiple Occupancy – HMO
- Student lets
- Many many more
PM: Sounds straightforward enough. What's the catch?
3. There are risks
- Property prices can fall
- It’s not a liquid asset – can be difficult to sell property if you need to
- Tenants pay stop paying
You can outsource a lot, but it can never be 100% hands-off. You at least need to educate yourself enough to know if your team is doing a good job – it’s not like buying an index fund and sitting back. But, you can make a lot of money in the long term.
What you need to know
PM: OK, you've piqued my interest, what are my first steps?
1. Set a goal and create a plan
- Set a SMART goal (Specific, Measurable, Achievable, Realistic and Timed)
- Create a plan to hit that goal
- Work with someone to put that plan together
- Make sure your partner is on board with it
PM: But my goals need to be informed; how can I find out if my goals are SMART?
2. Educate yourself
- Books (Amazon affiliate links)
- Social Media
- Ignore acquaintances who have opinions even though they’ve never invested!
PM: Can I do everything myself, once I know what I'm doing?
3. Work with Experts
- Get referrals – solicitor, broker, agent, accountant
- Value your time
PM: I'm ready to crack on with building my property portfolio; any last thoughts?
4. Take action
- Don’t rush in, take your time and think it through
- It’s always going to be scary, but at some point you have to take the plunge and learn by doing
- You won’t get everything 100% right first time, but mistakes get sorted over the long-term, and you’ll be further ahead than if you’d never invested at all
PM: That's fantastic, thanks so much guys. How can people find out more about you and what you do?
The Property Podcast:
OK. So my thanks again to Rob and Rob for taking the time to talk to me. That's it for this session of the MM podcast; I hope that was helpful.
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I hope you enjoyed this session. Next time we'll be talking about pensions. What are they, and how do they work? Believe me, for most people it's a lot simpler than you think…
Thanks for listening – I'll talk to you next time!