How To Lose Money In Property!
Welcome to today’s episode of the New Era podcast where we discuss all things property and hopefully share some tips and ideas on what to do – and what not to do! Today' episode is called How To Lose Money In Property! In which we'll be discussing the main ways in which we've seen investors lose money in property in the hope we can all learn how not to!Presented by Lorraine Gannon & Sam Lawson we'll be taking you on a tour of all things property today! Today we’ll be talking about;A fantastic (& free) resource that you can use to buff up your knowledge on all things planning related!An updated forecast for what’s going to happen in the property market in 2023And we’ll be diving into today’s main topic of How To Lose Money In Property - sharing some of the main ways in which we’ve seen people lose money in property so hopefully you can avoid making the same mistakes along the way!Sounds like we’ve got plenty to talk about so let’s start with our news story… News Story This week's story comes from Property Industry Eye - its a prediction that house prices are due to drop by at least 10% in 2023 - full article here!https://propertyindustryeye.com/uk-house-prices-predicted-to-drop-by-at-least-10-in-2023/ We’d love to know your thoughts on this, are you seeing pricing start to drop in your areas? Or the opposite? What’s your forecast for next year? Value Give So, today’s hot topic is “How to lose money in property” - we’re going to be looking at some of the key ways in which people generally lose money in property investing! I think we’ll take it in turns and let’s do 2 eachSam's First One;Under-estimating refurbishment costs - This has to be at the top of my list for places where people go wrong and can get themselves into trouble. Most of the time this is down to not being willing to do the leg-work to get meaningful quotes - often investors walk around a property and pick a number from thin air. This rarely takes into consideration the specification or how quickly the work will be required to be done. My best advice on this is simply don’t be afraid to do the work to get meaningful quotes & try to have a clear idea of the cost of going over schedule - the cost of your bridging finance, council tax, utilities, lost rent, opportunity cost etc. etc.Lorraine's First One;Buying properties with too low a yield - In our portfolio & training company, you’ll see we have a bias towards high-cashflow strategies. The reason is that it’s entirely possible to purchase a property at a reasonable price, refurbish it and rent it out for - let’s say - £1,000 per month - and then when you refinance be disappointed with the actual net amount of money you receive each month.The three main factors (generally) in this are 1) the amount of rent 2) the amount of debt and 3) the interest rate.We’ve found that there’s lots of viable high-cash flowing property strategies out there that consistently perform well - even with interest rates being where they are today! So my big tip would be focus on high cash flow strategies & deals!Sam's Second One;Ok, so you’ve got me thinking now! Building on from your last one - People that enter and exit the market too often! Now this isn’t to say you can’t/shouldn’t sell property BUT you’ve got to know the costs attached to it - solicitors fees, capital gains tax, agents fees, potential finance costs etc. etc.And, if you’re only selling one property to then use these funds to buy a different property you’ll be looking at another round of buying costs - solicitors, lender solicitors, brokers, valuations, professional consultations,