PROPERTY INVESTING | STARTER COURSE |
Bonus lesson -
you hold the key?
The reality of being an investor is upon you. The real work begins here.
Collecting those keys is a feeling of excitement and dread in one go. So how do you get through this stage and feel good about what you’ve accomplished?
Prefer to read this lesson as a pdf?
In essence, the journey to this point so far has almost been a mathematical strategy; it's most likely been exciting and educational.
But, from here on in it takes a more tangible form, the reality of being a successful investor is upon you.
the real work STARTS NOW!
Working out what your long-term goal is, developing a strategy, getting educated on the processes involved, looking for property, viewing, haggling or negotiating and dealing with the purchase are all exciting prospects.
Believe me when I tell you that the excitement of collecting those keys will quickly drain and be replaced with anxiety.
BUT, you don’t need to worry, it’s very normal, we have all felt it and guess what, as always, we are here to help you through it.
Know & Understand,
Ok, so this is something you should be fully aware of so you can monitor the progress at each stage. Even if you don’t intend to be fully involved in the process, you still need to be fully aware of what’s required if you’re going to drive the business forward.
Here's a quick rundown of the steps required within this process:
Ensure To Check...
Depending on the property, being a full renovation, a light refurb or an almost ready to rent (turnkey) operation, you will already have an idea of its needs. If it’s a full renovation its always a good idea to attend the property on your own initially so you can check what exactly needs to be done, allowing yourself time to digest the scope of what is required. This is especially relevant if it was furnished when you initially viewed the property.
Make sure that the schedule of works is up to date and you’ve not missed anything. Unfortunately, when viewing occupied properties, it’s almost impossible to spot everything. There is no end to the lengths people will go to ‘paper over the cracks’ this is why we preached taking the time to look closely in the previous lessons.
So, what do we do on the 'walk-through'? ...
We'll let's see...The following is based on a light refurb or turnkey type property.
- In each room test the operation of each door & handle, test each openable window & note the type of bulbs installed in the fittings – you are, most likely going to refresh the latter.
- Any necessary repairs should be noted in one column of your pad, any possible or ‘maybe’ upgrades should be noted in another column and can be decided on at a later point
This list should be extended to the garden or yard as well as the front or ‘curb’ of the property.
- Take a comprehensive photo collection, this will be useful in the case of a renovation and remortgage, but will also help you to advertise the property sooner. Also referring to a photo is far easier than having to trawl back to the property to get an answer on something!
- We always arrange to have a To-Let board installed the day we complete, this draws initial interest and concludes the neighbours wondering. Even if you plan to fully renovate the property, it is still a good idea to do this immediately.
- Go and introduce yourself to the neighbor(s). This isn’t that hard as they will no doubt be trying to catch you anyway. The purpose of this is to dispel any doubts they might have. They will automatically think the worst, so it’s your job to appease them. Advise them that you intend on housing a reliable and trustworthy tenant.
Be excited; this is the start of your portfolio, enjoy it!
We’ve all heard the saying ‘time is money’ right, well this applies in all but one aspect of property investing, something that we will discuss in the next lesson.
For now though, time is definitely money!
It’s in your best interest to get the ball rolling as soon as is reasonably practicable; things take time, there will always be a ‘stalemate’ period, whether that’s waiting for a tradesman to produce a quote, finding an available timeslot or even a prospective tenant running down a notice period. These, in most cases, are unavoidable and beyond your control.
This is the time, however, that you can apply yourself to things within your control.
- Notify the council that you are the new owner of the property, most councils have an online portal to facilitate this.
- If you are missing any bins, notify the council. From the councils that we deal directly with, 90% provide this F.O.C when you initially purchase the property.
- Call the utilities companies to inform them of the opening meter readings and have the account transferred into your name. If there were no letters to identify the suppliers, you could use the following numbers to find the current suppliers:
i) Who is my Electrical supplier – 0845 601 3268
ii) Who is my GAS supplier – 08706 081 524
- When you call your supplier(s) it is a good idea to organise the installation of smart meters. This is a free service and saves time and energy (unfortunately only the physical kind) going forward.
- I mentioned above refreshing bulbs; this is not an unnecessary expense but rather a great selling point when showing your property. We always replace the current old-style energy efficient bulbs that take three weeks to illuminate the room with new ‘cool white’ LED bulbs of equivalent or maximum wattage. It really brings a bright, natural light feel to the room which can completely transform its look. You can swap these back over before the tenant moves in if you desire.
- Review the ‘maybe’ list and organise all the quotations so you can get the ball rolling with all the necessary repairs.
- Spend some time or money improving the curb appeal of the property providing this can be done cost-effectively, even weeding and sweeping will suffice as a minimum.
- No doubt the windows haven’t been cleaned in at least eight weeks, but more likely longer, organise these with a local window cleaner at a time that you intend to start showing the property, this is as equally important with any grassed areas.
Its now time to start organising the advertising and showing of the property, we will cover this in the next lesson.
Side Note: Once again if you’re intention is to be a hands-off investor type, it’s still vital that you understand the process demonstrated in the next lesson. Don’t rely on the agent to do it right. As we mentioned above, time is money.
It would be counterproductive to find out in 6 weeks time that they are not as efficient as they alluded to in order to get your business.
Keep on top of them and ask the questions. Any reputable agent will be happy to guide you through their process.
The advertising and in particular tenant selection is, in our opinion, one of the most essential aspects to successful property investing. This is the one thing that I see investors get wrong time and time again and it really bugs me.
The fact that investors seem to get the tenant selection wrong or have no interest in understanding the process is to me an inherent failure in their business. In a nutshell, the tenant is your profit and your cash flow, underestimate this lesson at your peril.
Here's a summary of this lesson and your next steps to take ACTION!
You must take action right now. Go! Go! Go!
Time is critical here. There will be factors outside of your control so it is strongly advisable to get the ball rolling as soon as possible with your checks and what you can control that way you can action what’s needed to minimise wasted time.
- Its always a good idea to attend the property on your own initially so you can check what exactly needs to be done, allowing yourself time to digest the scope of what is required.
- Make sure that the schedule of works is up to date and you’ve not missed anything. Unfortunately, when viewing occupied properties, it’s almost impossible to spot everything.
- Advertising and in particular tenant selection is, in our opinion, one of the most essential aspects to successful property investing. Be thorough in your checks but be aware time is of the essence. However,
this is no excuse for making half an effort of this stage of the process.
1.) Create some checklists of everything you will check with a property and use these every time you do the checks so that nothing gets missed.
2.) If you have a property ready to check go out and check it using the points you’ve learnt in this lesson. If you haven’t a property yet apply the checks theoretically to your simulated property scenarios from lesson 5. What things might you want to check in these two cases?
"Happiness is not something ready made. It comes from your own actions"
- 14th Dalai Lama
WHAT OUR CUSTOMERS SAY...
If you’re a property investor, you’ve likely heard of David Tarn (WiseOwl Property). His list of credentials is lengthy, and if he really wanted to, he could go on and on and on about his accomplishments.
But when people list out all their accomplishments in their bios, they risk sounding a little egotistical. This isn’t Davids style. Sure, you might impress a handful of people with all those laurels, but many people who read the bio will end up feeling either intimidated or annoyed. Think about it, why do you want to read about how great someone else is, don’t you see enough of that on Facebook?
To minimize the egoism that comes with talking about yourself, here are David’s accomplishments without sounding like bragging. David has been investing for almost 15-years and has built a hugely profitable portfolio. He owns a self-start lettings agency, mentors, trains and coaches very well and rides an enduro mountain bike like a pro. He is 1 part executive, 1 part entrepreneur, 1 part mentor and 4 parts proud dad. Too many parts, maybe that’s the maverick in him?