Is property actually right for you? By the way, that’s a serious question. What I see is that many people just assume property is right for them and jump in without a second thought, and end up buying a property before they’ve answered more fundamental questions like: do I have the mindset, temperament, resilience and patience to get into property, and to do it properly? And when people don’t ask themselves the basic questions like this — and I’ve seen this happen a lot, over my 40 years in property — they almost always end up making decisions they regret, and many lose a lot of money.
So let me try to answer it properly. Because I think there are four very specific things that get in the way, and if you can identify which one applies to you, the next step is a lot clearer.
Strategy paralysis
When I first started, there were really only two property strategies. You either bought a property to rent out, or you bought a property to do up and sell on — what we now call a flip. That was pretty much it. Now there’s a huge amount of chatter about multiple different strategies: HMOs, serviced accommodation, commercial conversions, and some which require no money of your own, like rent to rents. There is so much choice that it can confuse even experienced investors — and for someone starting out it can be completely overwhelming.
The starting point has to be to decide what it is you’re actually trying to achieve from property, and THEN to decide the strategy. With so much information being thrown at us through training courses, books, YouTube videos, it’s easy to get this the wrong way around — to decide on the strategy first and then to figure out what you want from it. And that’s a big mistake.
The starting point is: what am I actually trying to achieve in property? And is that something I’ll be comfortable with if I achieve it? If the answer is yes, then look for the strategy. If the answer is no, then move on to another form of investing or wealth creation.
Here’s the point which underlies all of this and which is important, but often missed: once you’ve identified the strategy or strategies that would work for you, you then need to look at that strategy in terms of your lifestyle — whether it actually fits with who you are, and what you can realistically allocate in terms of time and resources. If what you need requires a very intensive property strategy, but you’re already working 60 hours a week in a high-stress job and don’t have time to see the family, then taking on a strategy like that isn’t going to serve you. But if you have the time, the energy, the patience and the enthusiasm to learn — then perhaps property is for you.
“I don’t have the time or the money”
Many people don’t go into property because they’re convinced they don’t have enough time or money. And let’s be honest, for some people that’s going to be true. But this is one of those things in property that it can be very useful to understand clearly.
In a very simplistic way, success in property often comes down to either having money or having time. I’ve been in property for over 40 years, and in that time I’ve met many people who’ve had a lot of money but no time, and many people who’ve had a lot of time but no money — and both groups have been able to make it work. The very best scenario is to have both. The very worst is to have neither. If you have neither, it’s going to be very, very hard to make property work for you — not impossible, but it’ll take a lot of energy and creativity, and for a lot of people it just seems too hard to even start.
But if you’re like most people — plenty of time, but not a lot of money — you can still make it work by understanding how to raise finance, and how to use whatever finance you can access as effectively as possible. There are multiple routes: conventional lending like buy-to-let mortgages, non-conventional options like bridging loans, and private lending through friends, family, or joint venture partners. All of them are valid, and all of them need proper understanding before you start taking money from people — but the resources are out there if you look.
Confidence and trust
Confidence and trust comes in two forms. The first is that people who’ve never done property don’t trust themselves to get it right. And if they’ve never done property before, and all they’ve seen is Homes Under the Hammer on TV, then they’re probably right not to trust themselves yet.
The first step is education. There are plenty of free resources online — YouTube videos, blogs, books, podcasts — and they’re a good starting point to bring to mind the things you need to know. But by definition, they’re not going to go deep enough to get you to a point where you can honestly say “I now trust myself, I have all the knowledge I need.” Finding the right educational resources — ones that go into enough depth — is essential.
The second form of trust is the harder one: how do you know whether you can trust the person giving you the education in the first place? And unfortunately there’s no entirely reliable way of knowing before you try. You can look at online reviews, follow someone for a while and get a sense of whether you like and trust them. But at the end of the day, it comes down to doing your own due diligence.
One option that can help with both at once: rather than starting out in property on your own, you could do it as a joint venture — either with a friend you trust, where the two of you commit to getting the knowledge together before you spend money, or with a more experienced investor who can help in exchange for a fee or a share of the profit. And then there’s making sure you have the right team of advisors around you — and one of the first members of that team, in my opinion, should be a very good mortgage broker.
“All the good deals are already gone”
And then there’s the fourth blocker: the view that it’s incredibly hard to get good deals in this market. And it doesn’t matter what “this market” is — whether it’s a seller’s market or a buyer’s market — it’s always easy enough to find reasons not to buy. But the reality is that there are always good deals out there. They just take time and, sometimes, a bit of work to find. And I’d say that’s as it should be — because the reason you’re making money from property is that you’re being rewarded for putting the time and effort in, doing the research, using your creativity, doing the things which other people won’t do.
Two objections I hear fairly often. First: estate agents keep the good deals for their best clients. That shows a misunderstanding, because the estate agent’s client is the seller, not the buyer. It is true that estate agents can have preferred buyers — people they know can perform — and they may go to those buyers first if a quick sale is what the seller needs. But those preferred buyers have their own strategy, and if it’s completely different from yours, they aren’t competition. Most of my own deals have come through estate agents. They don’t present as a deal on day one — you look at the details, and then you create the deal out of it, through research, through asking the right questions, through understanding the seller’s motivation. Good deals aren’t found. They’re created.
Second: only off-market deals are good deals. But off-market has a mystique that is totally unwarranted. It may be that someone wants to sell privately and a bargain is there to be had — but it’s equally true that a private seller may have a completely unrealistic view of what their property is worth and will want far too much for it.
Whatever else is true, the question at the start of this article is the right one to begin with. Is property right for you? It deserves a proper answer before you spend a penny.
Here’s to successful property investing.
Peter Jones
Author, property investor and ex-Chartered Surveyor
PS. By the way, if you’d like a deeper dive into property investing based on the real-life experience of an investor who has built a substantial multi-property portfolio, my popular e-book, The Successful Property Investor’s Strategy Workshop, explains how I built my own portfolio from scratch and the principles that can help you do the same.
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