How to make money from property? I've given this a lot of thought, this one, and I reckon
there's actually only about seven different ways. Let me share those with you today. Hi
there. My name is Tony Law from Your First Four Houses, and my channel's all about helping
you get to investment property number four as quickly and as painlessly as possible.
Let's kick things off with the really big obvious one that, I'm going to be honest with
you, I really struggled with this when I first started out, and that is buying at a discount,
but I'm talking about buying at a serious discount, and we refer to this as buying below
market value.
To be very specific, this is what I mean here. If you've got a property that's in an estate
agent's window at £105,000, for example, that would generally sell at around about
£100,000 in today's market. Let's be honest. I'm talking, you'd buy that for about £75,000.
That's a serious discount. I didn't believe that you could do it, but believe me, there
are loads of ways that you can find those kinds of deals. Next, I need you to find ways
of adding real value, real tangible value to the properties that you're buying, so I'm
not really talking so much about a light refurb. I'm talking about things like planning gains.
Maybe you can split the property up into different types of units. Could you maybe build in the
garden?
Now, some of this stuff may sound a bit extreme. I've done them all, I hasten to add, but none
of them are that complicated, but they're real ways that you can add real tangible value
to the deal. Next, look to invest in areas of capital growth. Location, location, location.
We've all heard that phrase, but it is so important when you're looking to build capital
growth. Again, to be very specific here, we're looking maybe for regeneration areas. Are
they putting in some new transportation to the area that you're looking at investing
in? Is there maybe an increase in population? All of these kind of things can help you or
give you a better chance of getting some capital growth in the long term.
Look to buy win/win/win type of deals, or rather, look to offer win/win/win solutions.
What do I actually mean by that? Let's take an estate agency. I promise you, every estate
agency in the land has sellers coming through their door that want the most amount of money
that they can possibly get for their particular property, sometimes unreasonably so. There
are ways that you can actually find deals that give the seller what they want financially,
but actually work brilliantly for you as a deal as well, and maybe you also, you personally
also pay the estate agent their commission, for example. That's a good example of a win/win/win
type of deal. Maybe you've got a property that's technically unmortgageable and you
can construct a deal where you can do some remedial work, make it mortgageable again
and buy it that way.
Maybe you can stagger the payments on a portfolio purchase, thereby reducing the seller's capital
gains tax liabilities, for example. These are all good examples of win/win/win type
solutions. Next, I need you to find ways of maximising the rental income on the property
that you're buying. We refer to this also as sweating your assets. Now, you can do loads
of different strategies that give you the best chance of maximising your rental returns.
Let's take one of my HMOs for example in Poole. It brings in a net income, after all expenses,
and also voids as well the £36,000 a year. That's after all expenses. We don't need many
of those to become financially free, I would suggest. There are other examples of strategies
that you could use that maximises the rental income but you need to find ways of doing
that.
Next, and this is really important, especially in today's climate, you need to find ways
of becoming tax efficient. Now, although I want to give you some guidance and advice
here, I'm not going to do that. You need to seek independent professional financial advice
from somebody who is in a position to be able to give that to you, but please do it. So
many people don't. I'm talking about a specialist tax advisor, at the very least your accountant.
I'm hoping that they are actually experienced in property. Lastly, please try to find ways
of letting return on investment be your guide when you're trying to decide which property
to buy, so if you've got three or four properties in a row, look at the return on investment.
Take the time to calculate it.
I did a great little video on it and I'll link to that in the box below, which gives
you the reasons as to why you should be doing that, but it's very important that you use
return on investment. I'm sure there are lots of other ways that you can think of that you
could put forwards as ways to make money out of property, and I'd love it if you could
take a moment to share those in the box below. If you found this really helpful, it would
be great if you could take a moment to subscribe to my YouTube channel. Alternatively, if Facebook's
more your kind of thing, please take a moment to like my Facebook page. My name is Tony
Law from Your First Four Houses. I hope you found this one helpful, and I look forward
to seeing you in the next video. Thank you.