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Always Do Your Homework Before Buying Property !

 

Property Investing Buying Property 1 You should always do your homework before buying any property. Here, we discuss various things you need to consider before and during your property purchase.

Firstly, if you have little time to run around yourself, you may want to hire property agents and finders to do all the research for you. A finder will scout for properties that suit your needs both in terms of price and any specific details of the property, for example size, style, location of the property etc.

A finder can save the property investor a lot of time especially, if they are looking for property in unfamiliar territory. When I use finders, I usually state a minimum of 15% below market value (bmv).  However, in today’s market, I would prefer a minimum of 25% bmv as the market is depressed.  In depressed markets, there are more deals available; however, financing those deals has become more difficult.

To get the best deals, your relationship with your property finders needs to be a good one – this you can develop over several months.  Once you’ve bought one property via your property sourcer and in accordance with agreed terms, you will find them wanting to deal with you further.

This will save you time, money and effort in the long run. Property finders can also offer advice when it comes to financing and conveyancing your purchase – a lot of finders and deal packagers will prefer you to use their team as a condition of the purchase.

It is sometimes advisable to be armed with an option to purchase the property. This will offer you security that the property will be on hold by virtue of the option contract. An option agreement binds the seller to you; however, you are not obliged to exercise the option, i.e. you may pull out of the purchase for whatever reason further down the line.

There is a lot of noise around property options and buying a house for a pound at present – however, please note that you don’t actually purchase the property for a pound – you are merely buying controlling rights to that property which could lead to purchase at a later date if you choose to.

If you are buying the property using external finance, it is always wise to have a financial adviser run through the numbers for you.  You need to do this before the purchase, not during or after you’ve bought the property!  Please note that property investing is a business – buying a bmv property which is not cash flow positive could become a financial strain on you especially in today’s market when it may be more difficult to sell.

 

 

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Grow Your Property Business By Outsourcing

 

When I first started in property I would do everything myself. For example, I would source the property, prepare the property for letting, look for tenants, reference them, arrange viewings and do a lot of the property maintenance myself.

This was a real drag on my time and I found myself working harder and for longer hours than I would have preferred to. However, due to a lack of focus, the business wasn’t growing.

I later learnt that this was not the best way to run a successful business. By doing everything myself, I was actually hurting the business. I was focusing on menial jobs and not the most important job of all – that of growing the business.

I then began to outsource and the business benefited significantly as I was spending my time as a business owner and not as an employee.

Some of the things a property investor can outsource are:

 Property maintenance – anything including painting the walls, changing washers and the gardening can be outsourced.

The cheapest way to handle property maintenance is by finding a good ‘odd job’ man. This is basically someone who has skills to complete most of the general maintenance tasks around the house.

For specialist jobs such as roofing and electrics, you can outsource to professional tradesmen.

 Finding tenants – this can be outsourced to a letting agent.

By outsourcing the tenant finding you will save yourself a lot of time as you will no longer need to organise property viewings, interview tenants, apply for references etc

 Handling calls and general administration

If you are not able to afford a full time assistant, you can hire someone part time to handle any business enquiries.
An alternative to using a traditional assistant is to hire a virtual assistant. This is a great cheap alternative as you only pay for the virtual assistant’s time on your jobs, rather than a fixed income per week.

A virtual assistant can not only handle your phone calls, but can also be used for general secretarial tasks including answering your emails.

You can find a Virtual Assistant by for example, doing a Google search and choosing a firm that you can work with.

The only job I would recommend you don’t fully outsource is that of property sourcing.

Finding your investment property at the right price is the primary role of a property investor. If you were to outsource this, you could be in danger of losing your business.

However, you can still use property finders to source properties – but this would be to supplement your activities in this area, not to replace them.

Your business will only grow if you focus on it on a daily basis. Leave the subsidiary tasks to the specialists as your time is certainly worth more than the £10 an hour you would pay a painter and decorator.

You should aim to develop your property business into a fully automated system. This way, you can remove yourself from the business and the business would still continue to run without you, on autopilot.

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