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How to build a property investment portfolio from 0 to 10 properties

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How to build a property investment portfolio from 0 to 10 properties

Education is the most important part of building a successful, profitable property portfolio and here at Your Property Club, we provide it at no charge, as part of our service to you.

Many other companies charge you an arm and a leg for a very basic level of education, but in these pages, I'm making available many of my tips and articles that will help guide you on your way to building a profitable, successful portfolio of 10 properties or more.

Check out my website at http://www.yourpropertyclub.com for even more free advice and articles.

Is RICS valuations really worth?

Hey guys,

OK, so I have been investing for over a decade now so I can speak with a mild sense of authority about a RICS valuation and speaking from someone who probably spends about £2000 and £4000 per month on RICS valuations, I can tell you unreservedly that a RICS valuation is always wrong! 100% of the time, it's wrong! That's right it never really gives me an exact valuation of the property.

Now before you jump up and down that 'How can this be?', 'We are being mislead by RICS!', 'Burn every valuer at the stake!' think of it in light of these three things.

1. A person conducts the valuation, yep a 100% certifiable human being. This same person has good days, bad days, they have areas they know really well and others not so well, and they like some areas and despise others.

They are not robots using some algorithmic equation to calculate the value of a property they are people using training, knowledge and experience which of course are subjective criteria. Send three valuers into a property you will most likely end up with three different valuations. Now this in itself is not a problem unless you are relying on or you foolishly believe their decision to be perfect.

2. The intention of a RICS valuation is to give an estimate based on an arms length transaction, sold on the open market with a normal marketing program over a 3 month period. Not to give you an exact value at an exact time on an exact date. If it was the valuers professional indemnity insurance premiums would be so much higher and the cost of a humble valuation would sky rocket.

Read the rest of the 'Is RICS valuations really worth?' article on my site...

Why we say property "portfolio"

It may seem like an ambiguous term to use but portfolio is the way we describe two or more properties that you are currently controlling, managing or owning for profit.

The fact it is two or more properties means we can mean a specific number or in fact any number. Certainly for my many portfolio clients when we speak of a portfolio we have a goal of 10 properties. This is a token figure that if you achieved you have most certainly provided a pension for you retirement.

Realistically as long as you can get 3 plus 1 without mortgages you can safely retire with a roof over your head and an income stream that is all indexed to inflation. (I explain this in detail in Brett's 3 plus 1 strategy)

Any additional properties is all about lifestyle. The more properties the more enhanced your lifestyle will be.

In truth we always aim for 10 or more but our first goal for the portfolio is 1 or 2 properties if you are not a seasoned investor. The reasons behind this are emotional. We need to mentally and emotionally prepare you for a portfolio.

So the only real question is how many properties would you like to have in your portfolio?

For hundreds of free articles and all the property portfolio education you can poke a stick at, click thru now!

How do you create income from property?

The question I pose to most of my clients when I first meet them is how do you create income from property? I get many different answers but in actual fact there are only 3 main ways of creating income from property.

Direct property cashflow

Most people associate income from property as being an excess of rent over expenses. Whilst this is one it has one big drawback - income tax. As you are earning income from your property in excess of expenses you will pay tax on your profits. This is one of the reason we aim for maximum leverage from our property to ensure we avoid income tax.

Selling your property

The other way you can earn large chucks of cash is to sell your property. Doing this you will be liable for capital gains tax on the increase in value over any allowances. The capital gains tax rulings change often so you will need to speak to a professional about this. The benefits of this are that you have cash unencumbered once you have taken into account the tax.

Re-mortgaging Your Property

The final way and definitely the best way of avoiding any form of taxation is to refinance or re-mortgage the property and use the extra capital for whatever purpose. As you are using debt to fund your income you will NOT be subject to income tax or capital gains tax.

In truth all three methods will be employed as you build your portfolio of properties.

For hundreds of free articles and all the property portfolio education you can poke a stick at, click thru now!

The Property Sleep Test

To me, after many years investing and with dozens of properties in my portfolio, the actual act of investing still revolves around what I like to call the "sleep test". Can I invest in this property and sleep a full uninterrupted night without worrying?

If the answer is yes then I'm ready to invest.

It allows me to make a decision based on a sound and calm mind and limits the "great salesperson" factor. By that, I mean that it gives me some space and some to time to halt a deal I might have rushed into.

In fact, this is such a useful technique, I use it for any purchase above £300.

I do my research, choose the item, do everything I need to buy it, but I don't. Instead, I go home and sleep a full night. Then in the morning if I still want it I will buy it. I can't tell you how many times I've woken up with a fresh perspective and not made a bad purchase. It's amazing the difference a day (or a night in our case) makes.

So, if you couldn't sleep a full night then either try to drink less coffee or ask yourself am I lacking education or detail in some area? If you are, then you need to rectify this prior to investing. If you're not lacking in education or detail then perhaps it is not the right deal for you.

Read the rest of the property sleep test article on my site...

There are only 2 reasons to build a portfolio

Prior to working in property I owned an international franchise for a personal development self study course and seminar company. I would travel around the country giving seminars and conducting teleconferences. Throughout this time l realised that Anthony Robbins and Neuro Linguistic Programming (NLP) had it spot on when they said that people are motivated by two things.

They are motivated by the need to increase pleasure and avoid pain and if l am truthful the latter was a bigger motivator.

My interest in becoming wealthy lead me to move into running property and using my public speaking skills to run courses to educate people to build a portfolios yet still I realised that the same two things appeared again but both had a more specific and practical aspect.

The fear based motivator of avoiding pain was expressed through the realisation that the governments around the world were no longer going to look after our retirement.

For the oldest of us this meant we would still be OK, albeit at a less than desired level, for the youngest of us and if we acted reasonably quickly, we would still have time to make the necessary changes, but for the middle section which includes the majority of baby boomers, they were in real danger of being left short. It's this fear that has motivated so many to turn to people like myself to help them to avoid the pain of an unfunded retirement.

Click to read the rest of the article: There are only 2 reasons to build a portfolio...

How mortgage cost averaging will help you build a thriving property portfolio

I had an early morning review with one of my clients who was a little stressed. They were stressed that mortgages seemed to be going up and up and they'd have problems paying the mortgage if it didn't stop soon. Logically, everyone knows that interest rates go up as well as down but it's cold comfort during periods when all they do is go up.

Interest rates work in a cycle. They go up and up and then come down and down. Then up and up. Then down and down. So it's natural that our perception of what they're doing is more rooted in emotion than cold logic.

So my question to you is this: what can we do to smooth things out regardless of the market or cycle?

There are actually two things we can do that might help, and I'll explain both of them on the other side: How mortgage cost averaging will help you build a thriving property portfolio...

Do you have a 'dinner party' portfolio?

When they're starting out, investors are inundated with opportunity. On websites. At tradeshows. In the mail. It's everywhere. Cyprus, Croatia, Spain, Florida, Estonia, Las Vegas, Bulgaria, Thailand, Germany, Goa, France, Hungary, UK and so many more. It's a candy store for the budding property investor with so many outstanding opportunities to choose from.

The experienced professional investor knows that most of the countries are simply distractions or ways to easily line the pockets of salespeople%u2026 and to lose money.

Let me introduce one of my investors - "Tina". She has an awesome "dinner party" portfolio, meaning that around the dinner table she can hold her own with the best of them.

She owns a great place in France on a 17 year leaseback, a wonderful Spanish apartment only 10 mins from the beach, a main street apartment in Auckland, New Zealand, an off plan Dubai apartment, a Bulgarian ski chateau, a Northern Cyprus apartment to die for with views of the Mediterranean from the bedroom, an apartment in central Berlin (that's on the infamous east side only minutes from Alexanderplautz). She also has 3 apartments and her own home in the UK.

After I met with her, it was obvious that her investment strategy consisted of buying whatever sounded good. In fact, she was blissfully unaware of the fact that her portfolio was a ticking time bomb.

Click to read the rest of my "Dinner Party Portfolio" article.

The Emotional Side of Property Investing

Property is one of the most emotional things I have ever done. It may not have the highs of an English football match but it will throw every other emotion head on at you at some stage.

As you begin investing you invariably end up exposed to so many sources of information. Some are good, others bad, some correct, others blatantly wrong. The trick to becoming a numbers investor is to educate yourself to look only at the ones that matter to your portfolio.

As you build your portfolio here are just some of the emotions, good and bad you may face.

Click for the rest of the article "Emotional side of property investing"...

My best property investment tips and advice

My "set & forget" property strategy

Pinning down the overriding philosophy that I build my portfolio too, a philosophy that pervades everything I do, has been a 10 year quest but I recently realized that the answer has been right in front of me for so long. It can be summed up in 3 words: "set and forget" Read more about the "set and forget" property strategy

My "1, 2, STOP" strategy

This is the first and probably the most fundamental strategy that you will begin with. It is used for those without sufficient experience in the buy to let market. 1, 2, STOP strategy

The Property Sleep Test

Investing no matter how long I have been doing it has always come down to one thing its called the sleep test or put simply. Can I invest in this property and sleep a full uninterrupted night without worrying. If the answer is Yes then I am ready to invest. I can make a decision based on a sound and calm mind. What it also does is give me time to stop any compulsive buying no matter how good the sales person is. Read more about the sleep test here

Latest news and strategies from Brett Wood

As the propety market changes, you need to keep up to date with the best & most effective ways to build your portfolio! YPC can help you.
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Suggested property investment resources

Set and Forget Property - An Open Letter to Potential Property Investors | Set and Forget Property
Enter your details here to receive Brett's weekly "set and forget" property ideas newsletter.
Ezytrac Property Portfolio Management Software
EZYtrac Portfolio Management Software - free web-based property portfolio management software
YPC Wealth - Off plan and new build property acquisitions specialists
Off plan and New Build Property in UK, South Africa, Spain and Australia. YPC Wealth - Off plan and new build property acquisitions specialists Source off plan and new build property in the UK, Spain, Australia and South Africa. Our experienced team have sourced over £150 million in property over the past year.
How to overcome the risk of being one of 20 apartments to let in the same development at the same time.
Hey guys, The other day, I was speaking with one of our clients, Alan, who had visited a site that we sold. I asked him for him feedback because I thought
Lender eases deposit requirements for borrowers - Property Investment Video
Adam Posen from the MPC suggested capital gains tax and stamp duty should increase in line with inflation. The government wants to put an end to housing boom and bust, is this the way to go?

The average house prices went up for the seventh consecutive month but many economists predicts a drop in 2010. Is this a cause for concern or is this the nature of supply and demand?

We take a look at the annual percentage change in house prices and how this has changed between 2006 and 2009. Remember the overall picture may not be as bad as it seems as we take a closer look at the different regions.

Shocking stats from LV shows that over 1 million Brits at 50+ plans to cash in their properties for extra retirement income. Perhaps if they'd consider building a property portfolio they'd be able to live off their buy to let without having to sell their homes.

Finally, competition is returning in the mortgage market and it's good news for residential buyers as lenders ease deposit requirements. But what about the buy to let investors?

As always if you have any questions or want a chat about current opportunities call the team on 0207 812 1255.

My suggested reading

Books that have helped me achieve a fantastic lifestyle

I receive a number of emails every week from various people who don't have the capital to invest in property and are wondering what they can do about it. For me the first thing is to change the way they think. I have a number of books that I recommend for all investors to read, they will change the way you think about life and investments.
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brettwood

I first came across property in 1996 when I trained as a Real Estate agent. After this I moved onto mortgages as l realised that properties were easy t... more »

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