07 Next level

The Idiot’s Guide to Making Megabucks in Property 2019

  • It’s not getting any easier to make money in property in the UK
  • Regulations and higher taxes are everywhere, making a real nuisance of themselves
  • But with the right approach, any idiot could still succeed!

Don’t you just hate it when you meet or hear about someone who has made millions in property – someone who does not seem especially smart –  with few talents, no qualifications and no silver spoon in their mouth from birth.

Putting it politely, someone who seems kinda dumb.

You scratch your head, “How on earth did such a blooming idiot achieve such success?”

You speculate, “They must have done some serious jail-dodging stuff to get so far!”

Of course you shouldn’t be hating; you should be appreciating…and working out how they got to be so successful whilst you have to use the loose change when you pop round to the corner shop.

The good news is that you too can earn big money in property without any exceptional knowledge, experience or skill. Nor does it require a ton of money.

It is about starting off on tried and tested firm foundations:

  • Cultivating the right mindset which sees success as the result of hard work, not magic or luck
  • Taking the time to learn the knowledge and strategies to be a property winner
  • Taking the correct steps at every stage, relying on the help, advice and expertise of people who have done it before, got the t-shirts to prove it.

Property success can be broken down into 5 simple steps, steps even an idiot could manage without hyperventilating. Let’s call them “the idiot’s guide to making megabucks in property in 2019…in fact, in any year.” 

The 5 steps are:

1. Preparing properly before starting up
2. Deciding your investment approach
3. Choosing the property strategy or strategies most appropriate for you
4. Drawing up a written property plan
5. Operating professionally at all times

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1. Preparing properly before starting up 

You can’t just jump into property, not any more. Full and thorough preparation is essential if you are not to fall flat on your face.

The days when anyone could buy a property and make serious money with no planning or preparation are long gone.

Yes, “idiots” can still make money in property – but not just any idiot!

Expertise and knowledge are more important than ever. “Preparing properly” is about two things:

  • Education
  • Securing expert advice and assistance.

In Terms of education, you should be educating yourself generally on all property matters or strategies you are looking to deal with. Resources to use include:

  • Books
  • E-books
  • Magazines
  • Courses
  • Training
  • Workshops
  • Webinars
  • Podcasts.

Further, you can join property groups such as Your Property Network (YPN) and Property Hub. In addition, you can get involved in forums and attend property meetings, where you may be able to meet or gain access to a range of property people including:

  • Potential business partners or joint venturers
  • Advisers
  • Mentors
  • Experts
  • Workmen, builders and contractors.

In terms of securing expert advice and assistance, it is advisable to address these issues before you start on your first project. 

At the very least you should speak to a lawyer, a mortgage adviser, an accountant and at least one property professional – such as a property mentor or coach – with knowledge and experience of the strategies you intend to take up.

2. Deciding your investment approach

The second simple thing you have to do is to decide your financial reasons or objectives for investing in property.

At its most basic, this is deciding what you are investing for:

  • Income or
  • Capital?

Further, you should decide whether you are investing for the:

  • Long term or
  • Short term?

Of course you should know what exactly you mean by “long” and “short” in terms of number of years.

Finally you should decide whether you want your involvement to be:

  • Hands-on or
  • Hands-free?

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3. Choosing the property strategy or strategies most appropriate for you 

The third step is identifying the property strategy or strategies best for you, taking into account the second step, your investment approach.

Think of a property strategy as nothing more than the way you make money from property. The different ways or strategies will have pros and cons in terms of the key factors in your investment approach: 

  • Income/capital
  • Long-term/short-term
  • Hands-on/hands-free.    

You will select a strategy according to how much it meets your investment approach, goals or preferences. 

Here is a brief summary of some of the most common property strategies and their relevant characteristics:

Buy to let – you buy a property and rent it out usually to a single person or family.

Buy to let is a long-term investment and can be (a) hands-on – if you manage the property yourself or (b) hands-free – if you hand over the running of the property to a managing agent.

Some locations and some property types will perform better than others in terms of income or capital growth.

HMOs similar to a buy to let, but with the property having multiple occupants and so securing a higher rent.

The higher rent will appeal to you if your priority is maximising your rental income. 

The higher rents will also boost the capital value of the property.

Serviced accommodation – similar to buy to let but with the addition of services (such as laundry, wi-fi, TV and cleaning). Occupiers, a bit like hotel guests, typically stay for short periods. 

Serviced apartments can attract even more lucrative rents than HMOs and are all the rage at the moment as landlords seek to super-size their rents in the face of a raft of unfavourable government policies against landlords – including the reduction of mortgage interest deductibility and the imposition of the 3% stamp duty surcharge.

If you want to gain maximum income from your property, operating it as serviced accommodation is the way to go – although it has to be said that there is a high risk of the government legislating away some of the advantages of this strategy in the not too distant future. 

Buy refurbish refinance (BRR)you buy a rundown property, refurbish it to add value, refinance it to take out some of the added value, and then let it out.

BRR is similar to buy to let except value is “forced upwards” after purchase – with any growth in value during the period of ownership being extra.

This is a great strategy for you if your priority is long term rental income, but you also want the chance to use some of the newly added equity to invest in your next purchase.

This is a powerful way to add to your portfolio after every refurbishment, and is the fast lane to property millionaire status for many property investors.

Flippingflipping is basically BRR without the refinancing. Once the property is done up, it is sold – releasing the full equity or profit.

This is the strategy for you if you are looking to grow and recycle your capital, progressing to bigger and more lucrative projects each time.

It is a way to climb the property food chain, with bigger projects typically providing bigger gains or profits. Of course, they also present greater risks.

Flipping is a good strategy if you like the idea of property but don’t want to deal with tenants.

A key part of choosing the right strategy for you is to seek and take expert advice in advance. If you need to pay for that, shying away at that point is unlikely to be your best ever decision.

Many would-be property millionaires who are “blooming idiots” end up looking on at others with insane jealously simply because they fail to properly explore and use start-up funds readily available to them.

Seed capital to get your property empire off the ground could come from countless sources, including:

  • Selling, mortgaging, remortgaging or releasing equity from a property owned by you or a relative
  • Securing an early legacy if one is due to you
  • Accessing your pension or other lump sum available to you
  • Disposing of high value assets which you don’t need or use, especially if depreciating in value over time
  • Private loans.

Any capital raising should of course be taken only after taking due professional advice.

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4. Drawing up a good property plan 

Once you have worked out the property strategy you intend to follow, the next step is to put it all down in writing in the form of a property plan, which you can refer to, review and revise over time as necessary.

A bunch of ideas and “a plan in your head” is no good – too easy for you to forget, veer off course and give up.

Being accountable to someone on your property journey (such as an adviser, coach or experienced property investor) is almost essential for your success.

“Blooming idiots” don’t usually end up with a seven figure bank account because they listened to no-one, relied on no-one and did it their way like Frank Sinatra.

Your “accountability partner” can, with your commitment, use your property plan to guide, assess and measure your progress – making it more likely that you achieve your property goals.

They can help you when the going gets tough, providing that vital second option, getting you back on the right track.

5. Operating professionally at all times

The final step in the idiot’s guide to property success is about not messing things up.

Over the last few years in particular, the government has brought in a formidable number of rules and regulations which impact on anyone renting out property.

If you want to build your property wealth with the minimum of red tape, avoiding tenants completely could make things easier for you. 

But even without tenants, successful property investing requires high levels of ongoing professionalism if you are to minimise risks and stop things from going wrong.

To be successful in property investing, you need to adhere to the highest levels of professionalism in all your business activities.

You need to know the rules and regulations which apply to your business and apply them accurately, efficiently and effectively.

You need to have first class principles, practices, systems and procedures. 

You particularly need to give priority to people management, budgeting, cashflow and taxation. 

That way you are unlikely to come a cropper by ending up in court or, worse still, finding yourself in an intractable financial tangle where insolvency or financial ruin is your only way out. 

Conclusion

Yes, the essential 5 steps to becoming a property millionaire are few and simple. But you should not under-estimate them.

“Simple” doesn’t necessarily mean “easy” or “inevitable”.

Idiots more than most need to be smart if they are not to be epic fails!

But if you follow and master the 5 steps, seeking and following expert advice and assistance at every stage, you are more likely to succeed than fail.

Pretty soon you could be that “blooming idiot” someone else is looking at enviously…wondering how on earth someone so unexceptional ended up as a property multi-millionaire!

Enjoyed this blog? Please share it with friends.

Have you ever thought of becoming a property millionaire?  If you are not there yet, what do you see as your biggest challenges? Please leave your observations or comments below.

You may also find the following blogs useful:

Buy to let (buy and hold a property for income and/or capital growth)
Rent to buy (property is rented before it is bought)
Rent to rent (rent property to rent it on for a higher rent)
Option to purchase (profit from your control of a property)

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Dalton Barrett
Rebel Property Coach

Please follow me on Twitter @Dalton1London
You can find me on FacebookInstagram and on YouTube
Please link up with me at LinkedIn

My website is: www.rebelpropertycoach.com

 


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8 replies »

  1. Each blog I read makes me realise I am wasting time by not stepping on to that income generating property ladder. All I need now to start is that elusive deposit.

    • To stop wasting your time Marilyn, could I suggest that you check out the “Finance” section of my blog where there are many blogs dealing with acquiring a deposit. Also don’t forget my book “Quick House Deposit” available on Amazon.

  2. Very interesting article! I particularly like the idea of writing the property plan as this will help people focus on it and work accordingly. In today’s climate, good planning is a must! Gone are the days where you could just embark on buying property to let regularly without worrying about anything!

  3. Great information, very nicely written. Think I will 100% follow these steps as this will help me achieve my dream to become a property millionaire.

    • Great! Glad you liked the blog Vik. I’ll be writing several similar blogs soon please keep an eye one for them. Also, check out the “Next Level” section to help you achieve your dreams of becoming a property millionaire.

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