by Simon Zutshi
7:12 AM, 31st December 2019, About 3 years ago 3
As we rapidly approach the end of the year, and the end of this Decade, I would like to help you to get a flying start to 2020, because I believe it is going to be a great year to invest in property, as long as you know what you are doing.
There is still massive uncertainty in the market due to; the Section 24 tax changes, increasing legislation and the effect of BREXIT still hanging over us, but that is exactly what I am talking about. Right now many investors are paralysed with fear and don’t know what to do. That means there is an opportunity for all of us who are prepared to take action and make the most of this unique purchasing opportunity. However, at times like this, people often come up with all sorts of reasons why they can’t invest.
In this final article of 2019, I want to clear the path for you and remove the barriers that may have previously prevented you from investing. I am going to do this by addressing head on, eight of the most common reasons (excuses people tell themselves) why they can’t invest right now.
Excuse No 1:
I don’t have enough money to invest in property
This is one of the biggest blocks to people moving forward. No matter how much money you have, or don’t have, at some point everyone runs out of their own money. All successful investors use other people’s money to invest. It’s just some people have to start using other people’s money sooner than others. If you don’t have money, then what do you have? The key is to get good at finding great deals. When you find good deals there will be other people who have money, but don’t have the time, knowledge or inclination to find good deal themselves. Working with you in a joint venture, could be a great solution for them. There are also many people who don’t really want to invest in property, but they do want to get a much better return on their money than they are getting in the bank, or from their pension. You can help these people get a much better return on their money, by lending you’re the money for your property deals. The best people to start with are family and friends. People who already know you and trust you. It should go without saying, but I am going to say it, that you do need to be very careful when using other people’s money.
Excuse No 2:
I can’t find any good deals in my area.
This comes down to a lack of knowledge, and or belief. The reality is, there are deals everywhere, in all areas, but you need to know what you are looking for. There are motivated sellers in all areas. These are people who will be flexible on the price or terms of the sale because they have some sort of property related problem that they need solving. Instead of looking for property, you need to look for these motivated sellers. Once you find the seller you can work out if the property is suitable for you and your strategy, and if not you could package it up and sell to another investor for a fee, as long as it a good deal.
Excuse No 3:
Deals don’t stack up in my area
This is similar to Excuse 2, but is slightly different. It might be that there are some deals in your area, but they just don’t stack up for a purchase. This is often the case in expensive areas. For example, in expensive areas it can be difficult to buy an existing HMO and get the kind of Return On Investment (ROI) that you would want from an HMO (at least 15%+). So you may need to adjust your strategy. Instead of buying an existing HMO, you could buy a larger 3 bed house and convert this into a 5 or 6 bed HMO. By adding value, you should be able to refinance and remove most of your money, which will then give you a great ROI. Also strategies such as Rent to Rent and Purchase Lease Options also work well in expensive areas.
Alternatively, you could always invest outside of your area and find an area where it gives you better cash flow and ROI. There are challenges with investing further afield, but you can overcome these if you have a local power team to help you find, manage and maintain your properties. The best way to build a local power team outside of your area, is to visit the property investors network (pin) meeting in that area and ask for recommendations.
Excuse No 4:
I don’t have enough time to invest. I am just too busy.
You might well be busy, most of us are, but we all have the same amount of time every day. It is up to you how you chose to spend or invest your time. It all comes down to what you decide to prioritise in your life. If you are too busy, unless you do something about it, and make some sort of change, then you will always be too busy. One of the biggest benefits of investing in property, is that you can work once and get paid forever! The time and effort you put into finding each property is rewarded every month (for as long as you own it) by the rental profit that it makes each month. Remember that you don’t have to spend your time managing the property and tenants. You can get someone else to do that for you. I don’t personally manage any of my properties myself. I pay other people to do that for me, which means I have my time free to do what I am passionate about, which is helping other people to become successful investors.
A big mistake many people make is not valuing their own time. I believe time is your most valuable asset. If you are short of time, you can save yourself years of trial and error by investing in yourself to gain the required knowledge, as quick as you can rather than trying to learn how to invest the hard way on your own. You need to make sure you are doing the right things. Some the most successful students on my Property Mastermind Mentorship have been people who had very busy jobs or businesses, and yet they committed just 8 to 10 hours per week of focused time with life changing results. It is about making sure you are doing the correct things in the time you have available.
Alternatively, if you really can’t find the time but have a great income you have two choices. You can either get people to find deals for you and pay them a fee to do so. This can be expensive but better than not doing any deals. Or alternatively, you could always decide to joint venture with someone who has the time to find great deals but does not have the money. A great way to find these people is at property network events and seminars.
Excuse No 5:
I am not sure if now is a good time to invest. The market could be at its peak and so prices might fall in the next year or two, so I am going to wait until the property market hits the bottom and then buy.
No one really knows what is going to happen to the property market. Whilst there has been a dip in London prices over the last few years, around most of the UK, prices have held well. There might well be a further market correction, but who knows? In practice, it does not really matter what happens short term to property prices, as long as you believe that in the long term prices will go up, and during that time you can afford to hold the property. If you take this approach, then you should only ever buy properties which make a positive cash flow each month, as per Golden Rule No 3 in my book, Property Magic.
Now is always a good time to invest in property, as long as you know what you are doing. As I mentioned at the beginning of this article, there is massive uncertainty in the property market right now. Many of the amateurs are waiting to see what happens and this means there is not as much competition and there are still plenty of motivated sellers who need to sell. I truly believe 2020 will be one of the best years to buy property.
Excuse No 6:
I don’t have a good credit rating so I can’t get mortgages.
It does not matter if you can’t get montages as there are plenty of strategies where you can make money form property without having to have mortgages such as, deal sourcing, assisted sales, Rent to Rent and Purchase Lease Options. Of course, it is better if you can get mortgages as you will have more choices. However, if you do actually want to buy property, using money from another investor, you could always put the property in their name, which they might be happier with anyway because they will have more security. You would then have a deed of trust to acknowledge your true interest in the property.
Excuse No 7:
I don’t have any experience.
There are lots of people who have done some training and know what to do, but they have not taken action yet and so don’t have any experience. Don’t worry. Everyone has to start somewhere. When I purchased my first property back in 1995, I really did not know what I was doing but I wanted somewhere to live, so I just got out there and did it. Once you know how to find good deals you can get those funded by other people, more experienced than you because they will know that they are good deals. It’s all about getting out there and taking action. Don’t be afraid of making mistakes, that is how you learn and get better. There is nothing better than getting real life experience, which you can only gain by taking action.
Excuse No 8:
I can’t seem to motivate myself
If none of the above excuses apply to you, then maybe it just comes down to an issue of self motivation. Maybe you think (or know) you should be investing in property, but you are too comfortable with life as it is. Maybe there is not enough pain to motivate you to make a change in your life. Or maybe, you don’t have a big enough reason why to get you excited about your future. In that case, I recommend you start with creating a vision for what you would like your life to be. Next you need to feel the pain of what happens if you do nothing and life stays the way it is. You can chose, what your life looks like but you need to decide what you want that to be.
Having read this article, I hope you have recognised that some of the your “reasons’ for not taking action, may in fact just be some of these common excuses that many people tell themselves. I truly believe that anyone can achieve financial independence through property investing as long as they as educate themselves, take action and keep going until they get the results they want.
If this article resonated with you, then you might like to have a look at three complementary training videos that Simon Zutshi has recorded, all about what is happening in the UK property market in 2020, and how you can make the most of it. The videos are as follows:
Video 1: “Why now is the best buying opportunity of the Decade”
Video 2: “What is the best investing strategy for the current market”
Video 3: “How to make more money from your property investing”
I hope you have a wonderful festive period, and all the best for the New Year and new Decade.
Invest with Knowledge, Invest with Skill
Author of Property Magic and Founder of property investors network
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