When you think about a business that makes serious money, many of us mention Property Investing. But do we really know what it entails… Can everyone do property investing? Most people can, yet again it’s about mindset and the sort of person you are at a given moment of time. You start off with understanding what you want in life and what sort of income will help you achieve this goal. For example, if you are looking for the financial freedom you would need an income source that generates money for you monthly. This will help determine what sort of property strategy you to employ, whether it will be a buy-to-let, a flip (Capital gains), rent-to-rent etc. You also need to understand what finances are required, what your spending habits are, and know where to get additional money from.
Understand your Finances
Firstly, understand your situation and assess it by categorising your expenses and income streams to determine your cash flow. Also, calculate your wealth measurement, i.e. how many months will you survive if you stopped working right this second. This will give you a good idea of how urgent your financial situation is. Once you have put yourself in a position to monitor your spending habits (this could be done using a simple spreadsheet), look at what you can cut out, and manage in order to maintain the cash flow you desire. Determining your total monthly outgoings is a key figure, as it is a target also known as your financial freedom figure. If you can surpass this figure residually, you’re on the right tracks to financial freedom.
Gather your Information
Once you have gathered these basics you need to establish how far you are willing to travel to invest in a property, will it be in London? Will it be in the north of England? Or will it be in a different country? When you have reached an answer, start to calculate the basic numbers associated with property in your chosen area, such as the average prices of a particular property, the sort of market present there, is demand high or low, the advantages and disadvantages in investing in that area, and what your equity may look like over time. You need to become a master sourcer of finding this information, which sometimes means paying for it. Research these areas for yourself online, or talk to real property investor who has an idea of what is going on in the market. The information you receive needs to be valid to the strategy that you are using.
Network with Purpose
Before anything begins you must make sure you read and attend different seminars and working groups to network and understand what the business looks like currently. It will allow you to develop the confidence and gain the know-how into understanding the industry and the direction of the market. A great book that has kick-started many people’s property investment journey’s is Robert Kiyosaki’s: Rich Dad Poor Dad. This is a great book for giving you the concepts behind how money works and why Property is a great business to invest in. However, you must also consult practical advice where you can, using Mr Kiyosaki’s principles. If you can get a mentor, it is highly advised, as they can direct you onto how you should attempt your journey, whether this is directly or indirectly.
Form your Power Team
You need to identify with whom you will need in your local and national Power teams, i.e. Solicitors, Accountants, Mortgage Broker etc. Without these fundamental units, you shall never ever be able to be a successful property investor. Do not rely on people to do you favours, rely on people who have evidence to get the job done. If you have trouble finding these types of people it is always important to get recommendations from real property investors who have experience in the game. The best place to find them is at networking events. Meetup.com is a great place to start where you can begin your journey towards understanding the logistics of investing in property.
As you are building a list of power team contacts, people you’ve met on networking events, read the books and articles to help you on your journey, you should start to get a sense of how things operate. You should also be creating a database, library, a bank of information, and a system that you can use and follow for this business. You need to make your efforts documentable and duplicatable for the purposes of leverage in the future. Once you have spoken to your power team members, especially your accountants and mortgage brokers, it gives you an action point as to where to begin. Start ringing letting agents and found out demographic information about the town you want to invest in. Arrange appointments to meet up with these letting agents and discover the rent rates. Eventually, liaise with estate agents and view properties to develop and understand how investments work in those areas. Be sure to carry a notepad with you to record all the information you need. The aim of the game when property investing is to have enough intel and confidence as possible to buy at wholesale rather than retail price. You want to convert something of low value into something of high value, making an investment and profit in the process. It is up to you to make sure you understand how to calculate these figures as accurately as possible. Without a team, it’s not possible. Remember – Together Everyone Achieves More
Two books to get you started on your journey practically are:
The ABCs of Real Estate Investing – Ken McElroy
Brick Buy Brick Book collection –Tigrent Learning UK
Happy property Hunting!