What is a 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.
Remember, the greatest of deals normally only comes along once a day. Think about it. The practical test of this is that no matter how good the deal is, always, always delay your decision until you have slept on it until you are sure that you understand the deal. This will normally only come with experience.
If you wake in the morning feeling enlivened and fresh then you have passed the sleep test. If you wake feeling like you just went to bed then perhaps it is time for more consideration? The most important lesson in property investment is this: you are responsible for each and every one of your own decisions.
Live with passion,
Brett Wood
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Brett Wood is an author and property investor. He runs a successful property investment consultancy in the United Kingdom. His strategies have helped thousands of investors to get on the property ladder and build successful property portfolios.
Originally from Australia where he was a successful mortgage broker he moved to the UK in 2002 and since then has build a massive portfolio of off plan and new build residential properties in the UK, Spain, Slovakia and Australia.
For further details contact Brett Wood at http://www.yourpropertyclub.com or directly on 0870 042 1188.
Tuesday, February 5, 2008
Friday, February 1, 2008
Brett’s 3 + 1 strategy in Property
The end goal of investing in property (or anything for that matter) is building a nest egg for ourselves that we can use not only during our retirement but throughout our lives to supplement our lifestyle.
It isn’t that difficult once you understand the basics. Today we’re going to talk through the basics of building your property portfolio of residential buy to let properties with little or managed risks and starting as if you have nothing. Hopefully, you will have already saved some cash, built up some equity in your existing property or perhaps even borrowed for a deposit, but regardless of where you are at it is important that you understand what we are going to achieve.
So how do we achieve a self funded retirement and a wonderful lifestyle along the way?
Own your own home
It’s not rocket science but if you want to self fund your retirement you will need to have your own home paid off in full. This will provide shelter for you and your family to live in but it will not provide an income to feed and clothe you. For that you will need a number (at least 3) of buy to let properties again paid off in full.
… and three investment properties
The average person spends a third (1/3) of their income in tax and another third (1/3) in living, the final third (1/3) is spent on rent or mortgage payments.
If this is true and you owned outright (ie. you had no mortgage so all the rent was yours to keep) then you would receive a third of each of your tenants income adding up to a full income (1/3 + 1/3 +1/3) which would feed and clothe you in retirement.
The best bit is that the whole scenario is indexed to inflation so you don’t have to worry about living beyond your 100s.
I understand this is a simplistic illustration but this is the basics of it. Don’t feel that to be financially free you have to own hundreds of property. Aim low to start off with, this will remove the fear and worry you are likely to have. Once you own 3 properties owning 7 or 10 or even 15 is not that much of a step.
Plus one more
Assume you added one more investment property fully paid off. This is simply the lifestyle option. Imagine that upon your retirement you had an additional property (a fourth property) that was paid off. You would either super size your lifestyle off the additional rent or perhaps sell it and have a cash windfall of say £200,000. Not a bad holiday or holidays.
We call this our 3 plus 1 strategy
So how do we build the portfolio of 3 plus 1 properties? Again the process is simple and has very little risk attached to it.
Once you have purchased your first property you will continue to pay the mortgage and the property will double in 7-10 years. In the UK this is statistically every 7.3 years (over the past 50 years anyway).
As the property goes up in value you can now re-mortgage and free up some of the capital to invest in a further property. Once both of these properties go up you re-mortgage and free up the capital and purchase another and the process repeats.
Now once you have a number of properties you may decide to sell a property and pay down the mortgages on the others, freeing up some cash flow for your lifestyle or perhaps taking a lump sum of the profits for your lifestyle.
I have clients who aim at taking £10,000 per year out of their portfolio on top of their day jobs. Imagine having £10,000 in a lump sum. You might take a holiday with the family (even taking your extended families), or perhaps get someone else to finish the extension of the house, put in a pool (heated of course) the list in endless but your portfolio will allow you this freedom. Don’t forget if you do this correctly you wont even have to pay income tax or capital gains tax on the money.
The above is a massive over simplification, and I have deliberately not mentioned the many speedbumps you’ll experience on the way. We’ll save that discussion for another day.
Live with passion,
Brett Wood
PS. This “3 + 1″ strategy is the theoretical principle but the more practical situation is explained in my buy 7-10 properties and hold them for 7-10 years post. Same principle just a different application.
-------
Brett Wood is an author and property investor. He runs a successful property investment consultancy in the United Kingdom. His strategies have helped 1000s of investors to get on the property ladder and build successful property portfolios.
For further details contact Brett Wood at http://www.yourpropertyclub.com or directly on 0870 042 1188.
It isn’t that difficult once you understand the basics. Today we’re going to talk through the basics of building your property portfolio of residential buy to let properties with little or managed risks and starting as if you have nothing. Hopefully, you will have already saved some cash, built up some equity in your existing property or perhaps even borrowed for a deposit, but regardless of where you are at it is important that you understand what we are going to achieve.
So how do we achieve a self funded retirement and a wonderful lifestyle along the way?
Own your own home
It’s not rocket science but if you want to self fund your retirement you will need to have your own home paid off in full. This will provide shelter for you and your family to live in but it will not provide an income to feed and clothe you. For that you will need a number (at least 3) of buy to let properties again paid off in full.
… and three investment properties
The average person spends a third (1/3) of their income in tax and another third (1/3) in living, the final third (1/3) is spent on rent or mortgage payments.
If this is true and you owned outright (ie. you had no mortgage so all the rent was yours to keep) then you would receive a third of each of your tenants income adding up to a full income (1/3 + 1/3 +1/3) which would feed and clothe you in retirement.
The best bit is that the whole scenario is indexed to inflation so you don’t have to worry about living beyond your 100s.
I understand this is a simplistic illustration but this is the basics of it. Don’t feel that to be financially free you have to own hundreds of property. Aim low to start off with, this will remove the fear and worry you are likely to have. Once you own 3 properties owning 7 or 10 or even 15 is not that much of a step.
Plus one more
Assume you added one more investment property fully paid off. This is simply the lifestyle option. Imagine that upon your retirement you had an additional property (a fourth property) that was paid off. You would either super size your lifestyle off the additional rent or perhaps sell it and have a cash windfall of say £200,000. Not a bad holiday or holidays.
We call this our 3 plus 1 strategy
So how do we build the portfolio of 3 plus 1 properties? Again the process is simple and has very little risk attached to it.
Once you have purchased your first property you will continue to pay the mortgage and the property will double in 7-10 years. In the UK this is statistically every 7.3 years (over the past 50 years anyway).
As the property goes up in value you can now re-mortgage and free up some of the capital to invest in a further property. Once both of these properties go up you re-mortgage and free up the capital and purchase another and the process repeats.
Now once you have a number of properties you may decide to sell a property and pay down the mortgages on the others, freeing up some cash flow for your lifestyle or perhaps taking a lump sum of the profits for your lifestyle.
I have clients who aim at taking £10,000 per year out of their portfolio on top of their day jobs. Imagine having £10,000 in a lump sum. You might take a holiday with the family (even taking your extended families), or perhaps get someone else to finish the extension of the house, put in a pool (heated of course) the list in endless but your portfolio will allow you this freedom. Don’t forget if you do this correctly you wont even have to pay income tax or capital gains tax on the money.
The above is a massive over simplification, and I have deliberately not mentioned the many speedbumps you’ll experience on the way. We’ll save that discussion for another day.
Live with passion,
Brett Wood
PS. This “3 + 1″ strategy is the theoretical principle but the more practical situation is explained in my buy 7-10 properties and hold them for 7-10 years post. Same principle just a different application.
-------
Brett Wood is an author and property investor. He runs a successful property investment consultancy in the United Kingdom. His strategies have helped 1000s of investors to get on the property ladder and build successful property portfolios.
For further details contact Brett Wood at http://www.yourpropertyclub.com or directly on 0870 042 1188.
Wednesday, January 30, 2008
Need help about Real Estate - Help Is On The Way!
Help is it what one needs when he enters a Property Business?
Do you ever need help? Well, of course you do! Everyone needs help with something at one time or another. Are you afraid to ask for help? Are you unsure if you should ask for help? These are important questions to ask you when money is involved. This is a fact; one small error could cost you heavily in a business transaction.
Real Estate or property is a business venture that many people like to get involved with. It’s a popular industry that many persons are lured to by the possible profits they can make. In any new business there are questions and answers to be discovered along the way. It’s said, a person entering property market is confronted with many issues that need to be understood. Hopefully, that person is aware that they should ask for help from others before making mistakes that could cost them a lot of money.
Get help of Property Consultants
One avenue to get help in property market is to hire a consultant or better yet, a have a good property education. With this type of assistance, you can be guided step by step through the process of buying and selling properties and Real Estate and that can give you a secure feeling about what your doing, and is it the right decisions or not.
With a Property Consultant, every step of the process can be avoided of mistakes and financial mishaps. Getting help when it involves money will save you money in the end; also will help you in making the right decisions. Monetary mistakes can make your entire experience a nightmare. But, on the other hand, doing something and asking for and getting help along the way can be a satisfying one, and also more yielding one. That secure feeling allows you to focus on what's ahead and not what you may have not done correctly up to a certain point.
Get Involved in your Investments.
Get yourself involved with your Property Consultant. A popular well known Property Investment Consultancy is http://www.yourpropertyclub.com. Here Brett Wood had provided more than about 400 articles free of cost, where you can enhance your knowledge about how to have a better experience in Property Market. You can even get help with their property consultants, regarding your particular property and build a successful property portfolio.
Do you ever need help? Well, of course you do! Everyone needs help with something at one time or another. Are you afraid to ask for help? Are you unsure if you should ask for help? These are important questions to ask you when money is involved. This is a fact; one small error could cost you heavily in a business transaction.
Real Estate or property is a business venture that many people like to get involved with. It’s a popular industry that many persons are lured to by the possible profits they can make. In any new business there are questions and answers to be discovered along the way. It’s said, a person entering property market is confronted with many issues that need to be understood. Hopefully, that person is aware that they should ask for help from others before making mistakes that could cost them a lot of money.
Get help of Property Consultants
One avenue to get help in property market is to hire a consultant or better yet, a have a good property education. With this type of assistance, you can be guided step by step through the process of buying and selling properties and Real Estate and that can give you a secure feeling about what your doing, and is it the right decisions or not.
With a Property Consultant, every step of the process can be avoided of mistakes and financial mishaps. Getting help when it involves money will save you money in the end; also will help you in making the right decisions. Monetary mistakes can make your entire experience a nightmare. But, on the other hand, doing something and asking for and getting help along the way can be a satisfying one, and also more yielding one. That secure feeling allows you to focus on what's ahead and not what you may have not done correctly up to a certain point.
Get Involved in your Investments.
Get yourself involved with your Property Consultant. A popular well known Property Investment Consultancy is http://www.yourpropertyclub.com. Here Brett Wood had provided more than about 400 articles free of cost, where you can enhance your knowledge about how to have a better experience in Property Market. You can even get help with their property consultants, regarding your particular property and build a successful property portfolio.
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