By the end of this article, you might be curious about property and if you are – great! Please book a call and let’s talk about your circumstances. You will definitely recognise the importance of questioning everything and checking to see whether you are making opportunities or just making excuses.
We are heading into the autumn now, and it’s vital that you are focused on your goals and your plans to make yourself and your family successful – whatever that means to you. Make sure you have a plan to create that wealthy life where you can spend your time doing what matters to you most with those you care about – the essence of a life well lived. Let’s talk about how property might help you achieve that.
Let’s get real
Historically ALL wealth has been founded in the control of land and property from knights and lords of history to our wealthiest families in the past and now. If you look at the top 100 hundred richest people, they will all have a massive property portfolio – either residential or commercial.
The illusion that a “man’s home is his castle” is a historical phrase that bears no relations for a large part of the younger generation.
Let me explain why; this was really the point of my third book Property for the Next Generation.
Post-university, a path the majority of young people are herded down leaves them with massive debt, making rental a sensible option as they need to earn to clear debt and build savings. What we also need to consider is that jobs are not for life anymore, and the average young person will hold 4-5 jobs post university to their mid-thirties – this means some people are changing jobs every 6-12 months!
Why is that important? Accommodation – not all jobs will be in the same area and so people will move house. Just imagine the cost of moving from a rental property – time looking and applying via an agent, transferring your deposit and personal effects – versus the cost for a homeowner. When you own a house, you need to pay for solicitors, surveys, brokers, movers, a deposit, mortgage administrative fees and the impact of increasing rate rises! How many times can you afford to buy and sell? Certainly not every 6 months.
Practically, it makes sense for a person to rent a property until they become settled in their career and relationship. Let’s talk about the impact relationships have on property ownership – first single, then couple, and finally a family – all these have different housing needs. From the bachelor or bachelorette who wants to live close to work and night life, to the couple that buys a flat and finally the family that needs a house and garden – again: costs, costs, costs!
Some view renting as wasted money, though they seem to conveniently forget that every house they buy costs them double once interest is compounded and added. All that money is going to the lenders, but for some reason they don’t consider that as wasted the way they consider rent money wasted.
If you invest in property – and it is harder if you don’t have your own residential – then you can invest / buy property where it makes financial sense and where your money makes a greater return than sitting in a bank account. You may also benefit from a capital gain as you hold this investment property for 5, 10 – even 15 years.
This invested money can then fund you to live where you want – it can pay your rent. You are then free to move within the UK after jobs, or abroad – knowing that your money is making easily 7-12% depending on the investment vehicle – whether in a person name or limited company.
So why don’t families buy investment properties where the returns make sense, then fund their children to live in rental accommodation through the rental profits, then when ready re-mortgage or sell a property to fund a deposit once they are settled?
Is this something you could do?
Property investing is great, but it isn’t for every person all the time. You might be ready to start, or you may need to take care of some debts or increase your earnings first. You may even simply need to come up with and plan out a strategy – possibly with the help of a property investor and wealth strategist such as myself!
While the government is talking about allowing rental calculations to prove you can afford a mortgage – and the Bank of England even removing the need for affordability – the temptation might be to buy more expensive property than can be afforded. Even if it doesn’t lead to financial stress and repossession – this purchase may come at the wrong time in your work or personal life cycle and just line you up for more costs.
External factors are important to consider as well. You might even be saying “but the media conversation is about interest rate rises, recession and a crash in the property market – shouldn’t I wait to invest in property?” I would respond by asking “where are the stories of businesses booming, a buzzing property market, and the desperate shortage of rental accommodation?” Why don’t we focus on how good some indicators are in our economy? Why not choose to find the opportunities for leverage, despite the very real challenges we face at the same time? A wealth strategist can help you navigate this as well.
So, in summary – the country is not burning. I am taking on new clients to help them build property portfolios because they can see the benefit of a well-managed and systemized property portfolio that is both tangible, in demand and generating more interest than banks or shares! If you are interested in learning more about creating a wealth plan, make sure you listen to my podcast A Wealthy Life, and look at the free resources I offer like the Readiness to Retire Wealthy Audit. Creating wealth might not be easy and quick for everyone all the time, but that is precisely why I am here. For more impactful wealthy life tips, please visit my website www.vickiwusche.com, listen to my podcast here and here, or schedule a free call with me.