Mistake number seven – They listen to people who probably know less than them! I heard Anthony Robbins once ask his audience “If you wanted to get rich would you study poor people?” “No” came the resounding reply. “That’s right” he retorted “If you want to get rich, you need to study rich people”. That…
DetailsMistake number six – They let their hearts do the figures. What do I mean by this? Well, I remember listening to a marketing guru giving a talk to a bunch of salesmen and telling them that, at a subconscious level, all decisions to purchase are based on emotion. Having decided “in their hearts” to…
DetailsMistake number five – They do sloppy research. Sometimes a deal is so evidently good, that one might assume there’s little point in doing any research. However, no matter how good a deal seems to be, I’d still like to reassure myself that it is a good deal. How much research should an investor do?…
DetailsMistake number four – They get tunnel vision Perhaps its human nature but most investors get this. It might be explained as being a need for the comfort we get when we stick with what we know. In effect investors will start to develop a niche. Often it will be that having bought a particular…
DetailsMistake number three – They put too much trust in valuations. Now, don’t get me wrong, as I said in point number one, valuations are a great way of making sure you aren’t paying over the odds. But they are not such a good way of confirming you are buying a bargain. Why do I…
DetailsMistake number two – They are too cautious in their negotiations. With the odd and often notable exception it’s part of the British psyche not to want to cause offence. Add to this that we often accept the asking price without questioning it, and the result is often weak negotiations. Let me explain. When most…
DetailsQuite often, when I talk about my experiences in property I’ll be asked what the difference is between a good property investor and a poor property investor. Truthfully, that’s a hard question to answer. Some people are naturally good at things and some people are just good at property investing. Putting natural talent aside, over…
DetailsRefinance This is relatively straight forward, most Buy-to-Let lenders will allow you to borrow more if the rent is sufficient to cover the mortgage plus a bit. They will stipulate that the rent is 130% to 150% of mortgage payments. They will also want a revaluation and administration fee. The big proviso for the plan…
DetailsWait for prices to go up This is the crunch part of the plan. If prices don’t go up, the plan won’t work (unless you bought substantially below market in the first place). I’ve heard it said that house prices double, on average, every seven to ten years. Looked at another way, average house prices…
DetailsLet it out at a rent that covers all costs This isn’t necessarily as easy as it sounds, because yields and capital growth often work against each other. It is generally true that the higher the yield, the less expectation there is in the market of capital growth. Conversely, the higher the likelihood of capital…
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