Why you shouldn’t go to your high street bank for mortgages

 Are you looking to buy your dream home, or your high return investment property before the Stamp duty relief deadline of 31 March 2021?

 

If you are, you are probably looking for the right mortgage for yourself.

 

When I was buying my first property, I went to my local bank which I had been using their current account for 10 years. I also went to the bank next door, and the nearest bank to my office. So I could get a comparison.

 

That sounded reasonable right? – When you are shopping for an important thing, you go around a few shops you trust and compare the prices.

 

How wrong was I! It not only cost me more money every month and it ended up costing my credit score too!

 

Unfortunately that’s what a lot of first time buyers, or new property investors do when they are looking for a mortgage.

 

There are two main reasons why you shouldn’t go to your high street/ most familiar bank for mortgage.

 

1.     You won’t find the best product.

 

There are many mortgage products out there, provided high street banks, special lenders, private finance, etc. You can’t find the best product by just asking for a couple of quotes. And the interest rate could make a big difference sometimes. For example, if you are borrowing 100k at 2.5%, your annual interest is £2500. Whereas if you are borrowing 100k at 3.5%, your annual interest is £3500. That’s £1000 a year, and £30,000 over a 30 year mortgage. And it’s not just the interest rate that can make a difference. How much deposit you need to put down, and other factors can all make one product better or worse than another.

 

2.     It can hurt your credit score, which affect what mortgage you can get

 

By going to different lenders and getting multiple agreement in principles to ‘compare the market’, you can leave too many searches on your credit report. Each time you get an ‘agreement in principle’, you get searched by the underwriter. And when you are searched too frequently over a short period of time, which can affect your credit score. If you don’t have a good credit score, you won’t get good rates so you have to pay more (or not be able to get any mortgage at all). So this is serious business.

 

So what should you do instead?

 

The best way to get the most suitable mortgage for yourself is to find a reliable and capable mortgage broker, who ideally has access to the whole market.

 

They can suggest potential products to you based on your situation, before doing an actual search on you. So you should hopefully get one ‘agreement in principle’ and seal the deal!

 

Stay tuned and we’ll talk a bit more on finding your mortgage broker next week :)

 

Stay warm and safe,

Emma xx

 

* Want the step-by-step action points, tools and scripts, to build an extra £2000/month income through property within 6-12 months? – CLICK HERE to book a free strategy session with me.

2021 is for Cash Flow Strategies!

 2020 has been a really tough year for a lot of people.

Many people lost their jobs, lost businesses, and lost income.

We all hope that 2021 will be better – but do we know for sure?

Covid crisis is still continuing. We are in recession and even more people will lose their jobs and income.

 

Building up an extra income stream is now emergency, rather than contingency.

 

In property investing, one way of categorising various strategies is Cash flow vs Capital strategies.

I have written a blog post on this before. If you want to reread this article, you can find it here.

What I want to say today is that – if you are new to property investing, it might be a good idea to start with Cash Flow Strategies in 2021 as oppose to Capital Strategies.

 

Financial security

-        Having an extra income stream will give you more financial security in times of crisis, for every property investor, new or experienced. However if you have limited experience, having sufficient cash flow coming in every month gives you a solid foundation. On that, you can incorporate capital strategies to give ‘boost’ of income.

Uncertain times and market

-        There is a lot of uncertainty in the property prices in 2021 due to Covid, Brexit after effect, and recession. Capital strategies typically involve some sort of value addition, which typically takes time. And time creates more uncertainty in uncertain times. If property prices start to fall, and you are caught in the middle of a value addition (development) project, the longer you wait the more the end valuation will decrease, and the less your profit margin.

Experience and risk

-        Most people are scared of making investment decisions. And you should be cautious to protect yourself. As a new property investor, there is a lot that you don’t know that you don’t know. So it makes sense to start with simpler more established strategies. These strategies tend to be more cash flow focused, such as But to let, Rent to rent, etc. Even more advanced cash flow strategies such as HMO and Lease Options, can be easier than really advanced capital strategies, with much less risk involved.

 

I hope that helps!

Emma

 

* Want the step-by-step action points, tools and scripts, to build an extra £2000/month income through property within 6-12 months? – CLICK HERE to book a free strategy session.

Our best resources of 2020 compiled with love

What a different year!

While reflecting on the joyful and tough moments of 2020, I want to tell you how incredibly grateful I am for your continuous support.

Holidays are a time for giving back. That’s why I decided to put together a list of the best resources we produced in 2020.


Top Property Investing Posts and Articles of 2020

• Do you still think property investing is ONLY for people with money? - WRONG!
• 9 Important Members of Your Power Team
• Are you thinking too much?
• 9 things you should NOT miss when choosing an investing area
• Do you have a PLAN B?
• Which is better? – Short-term VS Long-term rental strategies? 

Top Property Investing Tools and Learning Resources of 2020

• Property Data

A single point to find comprehensive data related to property and your investing area. Including postcode data, property valuation data etc.
 

• YPN (Your property network)

A monthly magazine for anybody serious about investing in property. Contains market update, property strategy update and examples, training materials, power team contacts etc. 1^st month free.
 

• Openrent

Currently the best website for renting out properties both whole unit and by room. 1^st listing free.
 

• Progressive property

My favourite property training company, with a number of free and paid courses.

As a last note, if you need help with your 2021 planning I'd like to remind you that I offer complimentary 1-1 coaching calls to help you build a plan to create your desired income stream through property.

I wish you all the best for this holiday season and are looking forward to a great 2021.

Happy holidays,
Emma

* Want the step-by-step action points, tools and scripts, to build an extra £2000/month income through property within 6-12 months? – CLICK HERE to book a free strategy session with me.

How I Found My First 3 Deals During Christmas 6 years ago

What will you be doing this Christmas? How did you spend your past Christmas period?

If you think Christmas is bad for business, think again.

6 years ago, I only just started investing in North of England. I had gone up a few times to do my ‘Field research’. And I finally knew what kind of properties I would want to buy – to achieve double digit return.

But came winter and Christmas was close. I was getting anxious as people were getting into the festive mood and I thought I would have to wait till the New Year to finally find my first deal in the North.

How wrong was I!

Despite my belief that there would be no business during Christmas, I booked my train tickets up anyway. I booked a few viewings with estate agents, and I also continued with my leaflet marketing campaign to access private sellers.

I remember I went up just after Boxing Day, and had 6 viewings lined up. I had already viewed up to 10 properties by then but none of the deals were quite up to my standard, both in terms of the financial return, and the other factors. I was starting to wonder if my criteria was too high, or my source of properties were wrong.

To my surprise, these 6 viewings went extremely well. The sellers were all motivated. In hindsight, I now understand that if a seller has to sell around Christmas period, he/she must be pretty motivated.

Long story short, I bagged 2 deals out of these 6 viewings during Christmas and they are still generating 13% return for me to this date. And shortly after the New Year, I started getting responses from my leafleting campaign as well. The sellers were also mostly pretty motivated. I managed to get another deal at 25% discount off market value out of these leads.

Who says Christmas means no business?!

The reality is that people tend to put off dealing with problems before Christmas so you get a surge of people who finally put their properties on sale. And people tend to overspend before Christmas, and it’s not until after Christmas that some realise they are financial trouble, which can only be resolved by selling their house. And family conflicts can get worse during Christmas, leading to a higher divorce or separation rate after…. In short, most people who sell during Christmas do so because they have to – so for them it’s more important to sell quickly with certainty rather than selling at the highest price. And if you can buy quickly with certainty, you are doing them a huge favour.

So now you know Christmas is great for business – what will you be doing this Christmas?

Have a great one!

Emma

* Want the step-by-step action points, tools and scripts, to build an extra £2000/month income through property within 6-12 months? – CLICK HERE to book a free strategy session with me.

When is the best time of the year to buy property?

I got asked very often ‘When is the best time of the year to buy property?’

It seems like most first time buyers start looking for properties in spring for some reason. Maybe the weather gets better and people are more willing to be out viewing properties. Or maybe people start to dream about a better life (and house) in the season of hope.

And in the winter people stop looking to move, or being bothered to do anything major. So there are much fewer purchases in the grimmer season.

Seems pretty normal, right?


But as a property investor, you need to know that you have to go against the crowd. Dodge the competition and you will find the best deals.


My best deals were agreed during the winter seasons. Many sellers who sell in the winter have a reason to sell – so they tend to have more motivation to agree a deal with you. And you as an investor, have the opportunity to buy properties at a discount and in return solve a problem for the seller (financially or emotionally).

However, don’t dismiss spring and summer months completely. Ultimately, as you become more experienced, you will discover deals that are hidden gems, which other buyers don’t recognise.

To getting your first property deal this winter!
Emma

* Want the step-by-step action points, tools and scripts, to build an extra £2000/month income through property within 6-12 months? – CLICK HERE to book a free strategy session.

Should you invest for Cash Flow or Capital Growth?

So you want to invest in property?

But have you thought about what you want to achieve through property? Could be pension, financial freedom, ego boost, pure interest….

It is crucial that you know what you want out of property, i.e. what property investing can bring you. Because only then will you be able to pick the right strategies and specialise.


There is a particular angle I want to talk about today, which is the cash flow vs capital growth dilemma.


Most people invest in property for either cash flow or capital growth. A good deal can get you both. But you should still understand out of the two, which is more important for you at a particular point in time.

Cash flowing properties will get you a recurring income every single month, even if the amount is not large. Capital growth strategies may get you a lumpsum after a period of time.

Generally speaking, cash flow strategies would be the solid foundation for any property investor. With a portfolio of cash flowing properties, you would have an extra income stream coming in, giving you more security. And as they are cash flowing, you would not need to worry about property prices going up or down.

And once you have the cash flow foundation, you can incorporate capital strategies to create more margin. However capital strategies typically require larger capital input, and more risk as they mostly involve some level of development.

If you are new to property, cash flow strategies would be easier to pick up, and would be your foundation for other more advanced strategies. And depending on how much capital you have, or whether you want to use your capital, there are great strategies such as BTL, HMO, R2R, Lease Options, etc…..

However, the more ‘simple’ the strategy, the more competition, and the more you need to do it correctly in order to create the high return and cash flow you want to achieve.

Till next time :)
Emma

* Want the step-by-step action points, tools and scripts, to build an extra £2000/month income through property within 6-12 months? – CLICK HERE to book a free strategy session with me.

Should you invest in FREEHOLD or LEASEHOLD properties?

For most people starting out in property investing, the most important thing is to build up the experience and limit the risk.

So should you invest in Freehold or Leasehold properties if you are just starting out?


The short answer is: invest in whichever that is the MOST WANTED in your area.


If you area is outside London, you can get this information through your local letting agents.

If you are in London, the answer is not as straightforward – because both freehold and leasehold can be desired by tenants.

However, generally freehold houses are more expensive, bringing your return lower than leasehold (except for those leasehold flats with really expensive service charges). But with freehold, you would have more room to carry out refurbishment to increase the property value.

You would have to go back to your ultimate goal – understand what you want from property. And then let the numbers talk, and make decision from there.

Build up the knowledge first and you will know what to do next!

Emma

* Want the step-by-step action points, tools and scripts, to build an extra £2000/month income through property within 6-12 months? – CLICK HERE to book a free strategy session with me.