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    TPP463: Why Property is a terrible way to make money

    enJanuary 27, 2022

    Podcast Summary

    • Shift in property market towards buy-to-let mortgages for limited companiesThe property market is seeing a significant shift towards buy-to-let mortgages for limited companies, reaching 50% last year. Property investing may not be the best way to make money due to its limitations, but alternative options exist.

      While property can be a terrible way to make money due to various reasons, it doesn't mean that The Property Podcast is ending. In fact, the podcast will continue to provide valuable information and inspire investors. One significant shift in the property market is the increase in buy-to-let mortgages for limited companies, which reached 50% last year. This trend is likely to continue, but the reasons behind it may not be entirely related to the tax changes. Property investors can explore different strategies to make money through property, but it's important to understand its limitations. In this episode, Rob and Rob will discuss these strategies and explain why property might not be the best way to make money, but they will also provide alternative options. So, even if property investing isn't your cup of tea, you can still benefit from listening to The Property Podcast.

    • Property may not be the best way for beginners to make £2,000 a monthConsider alternative property strategies for short-term income, as buying to rent requires significant capital and may not yield immediate results.

      While property can be a viable long-term investment strategy, it may not be the most effective way to make an extra £2,000 a month as a beginner. Buying properties to rent out with no additional strategies requires a significant amount of capital to start, which is not accessible to many people. Instead, other property strategies, such as refinancing or creative financing, should be considered for those looking to make a meaningful change in their lifestyle in the short term. Overall, while property has its merits, it's important to be aware of its limitations when it comes to making an extra £2,000 a month.

    • Refurb and refinance or flip properties: alternatives to buy-to-letConsider refurb and refinance or flipping properties as alternatives to buy-to-let for quick profits and building a portfolio. Each strategy has its benefits and drawbacks, requiring different levels of initial investment, time commitment, and risk.

      While the buy-to-let strategy is popular among many property investors, it may not be the most effective way to make significant money quickly. An alternative strategy is refurb and refinance, where an investor buys a property in need of repairs, improves it, and then refinances to release capital for another project. This strategy can help build a portfolio and provide rental income, but it requires a large initial investment and can be stressful and time-consuming. Another option is flipping properties, where an investor buys, refurbishes, and sells a property for a profit. This strategy can yield a large profit quickly but requires a substantial initial investment and comes with its own set of challenges. Ultimately, the choice of strategy depends on individual goals, resources, and risk tolerance. It's important to consider the benefits and drawbacks of each strategy before making a decision.

    • Property flipping vs Rent to rent: Which is right for you?Both property flipping and rent to rent can be profitable, but they require significant upfront investment, dedication, and careful consideration. For most individuals, other property strategies like buy-to-let or HMOs may offer more consistent income over time.

      Property flipping involves taking on significant risk for a one-time payment, with no recurring income. Unlike other property strategies, flipping requires a large investment of capital upfront and leaves no room for the passage of time to help mitigate potential issues. Rent to rent, on the other hand, can generate short-term income but comes with its own challenges, such as finding the right properties and landlords, and requiring a significant time investment. Overall, while both flipping and rent to rent can be profitable, they require careful consideration and a high level of dedication. For most individuals, other property strategies, such as buy-to-let or HMOs, may be more suitable for generating consistent income over time.

    • Rent to rent vs property investmentRent to rent is a business with significant time investment and management requirements, while property investment offers long-term benefits like leverage and hedging against inflation.

      While rent to rent can be a way to make income from property quickly, it requires significant time investment and management of multiple tenants and properties. It's more of a business than an investment strategy. Property, as an investment, offers long-term benefits such as leverage, hedging against inflation, and a proven track record. However, it's not the best option for generating a large amount of money in a short time frame without significant capital or time investment. Other investment options like the stock market also face similar challenges. The key distinction is that investments, including property, are generally not ideal for generating substantial income in the short term. Instead, they require time and capital to grow over the long term.

    • Creating Wealth: Business and InvestingBusiness and investing are effective ways to create and grow wealth, but starting a business isn't the only solution for making 2k a month quickly. Offering a service based on skills can be a low-risk and cost-effective alternative to property investment.

      Creating wealth through a business is a proven way to generate significant income, and once that wealth is established, investing in assets like property can be an effective way to grow it further. Alan Sugar is a notable example of this, having made his fortune through business ventures and then investing in property. However, if your goal is to make 2k a month more quickly, starting a business may not be the only solution. Offering a service based on your skills, such as consulting, writing, or design, can be a low-risk and cost-effective way to generate income. While property investment can be lucrative, it may require more capital and time commitment compared to offering a service. The book "Millionaire Fastlane" by MJ DeMarco provides further insight into this concept. Ultimately, creating wealth involves a combination of earning and investing, and finding the right balance between the two depends on your individual circumstances and goals.

    • Starting an online business: Quick profits with less capitalExplore e-commerce or informational products for quicker profits with less capital than traditional property investing. Hard work and new skills required.

      Starting a business, especially an online one, requires little to no capital and can lead to profits of £2,000 a month or more in a shorter timeframe compared to traditional property investing. You can start an e-commerce store or sell informational products with minimal upfront costs and grow your business through hard work and learning new skills. While there's no guarantee of success, the potential for quicker results and flexibility around a day job makes it an attractive option for some. Remember, none of this comes easy, but it's worth exploring if making money quickly and with less capital is your primary goal. Property investing, on the other hand, may require more capital and a longer timeline for returns, but it's a valuable wealth creation tool.

    • Introduce non-podcast listeners to Property Hub via SpotifyEasily share Property Hub with non-podcast listeners through Spotify, helping them discover the podcast and rate it to spread the word

      If you have friends or family who could benefit from listening to the Property Hub podcast but they're not podcast listeners, you can easily introduce them to it through Spotify. Spotify has been expanding into podcasts and made it simple for anyone to listen without having to understand what a podcast is. They can just open the app, search for "property podcast," and start listening. Plus, they can rate the podcast to help others discover it. So, if you're finding it difficult to get your non-podcast-listening loved ones on board, give Spotify a try. And while you're at it, don't forget to rate the podcast yourself to help spread the word. Keep tuning in to the Property Hub for more valuable insights on Tuesdays.

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    Related Episodes

    ASK184: Am I better sticking with my pension instead of property? PLUS: What does “commonhold” mean, and should I steer clear?

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    Do you have a buy to let or property investment related question for Rob & Rob? You could feature on the next episode by giving us a call on013 808 00035 and leaving a messagewith your name and question (normal UK call rates apply).

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    The next question on Ask Rob & Rob could be yours.

    Have you joined us over on the Property Hub Forumyet? Our online community is friendly, informative, and the members are waiting to welcome you with open arms. So get yourself over and introduce yourself.

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    ASK111: How do I overcome my lack of credit history? PLUS: Should I extend or refinance?

    ASK111: How do I overcome my lack of credit history? PLUS: Should I extend or refinance?

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    Don't be shy! All you need to do is leave a message with your name and whatever's on your mind.

    Just pick up the phone and call 013 808 00035 (normal UK call rates apply).

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    NEED MORE ANSWERS?

    The Property Hub Summit is the place to get all your questions personally answered by Rob & Rob, and build a network of other smart, motivated investors.

    Over the course of a full day at a swanky hotel we'll help you set your goals, form a plan to get you there, overcome your obstacles, and give you the support system you need to make sure nothing gets in your way.

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    Interested? Click here to find out more.

    See omnystudio.com/listener for privacy information.

    TPP423: The Ltd Co tax changes you need to know

    TPP423: The Ltd Co tax changes you need to know

    This week we’re talking all things tax

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    In the news 

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    Hub Extra 

    This week for Hub Extra, we’ve got a couple of resources for you.  

    And they’re an alternative to the popular messaging app, Whatsapp.  

    Whatsapp doesn’t offer a lot of privacy and are increasingly collecting data and insights into your activity.   

    So we’ve got a couple of different options for you. They are Signal and Telegram.  

    Both are apps just like Whatsapp that you can get for free, but your privacy is a lot more protected.  

     

    Let’s get social 

    We’d love to hear what you think of this week’s Property Podcast over on FacebookTwitter or Instagram. You might even have a topic you’d like us to cover in the future - if so, pop us a message on social and we’ll see what we can do. 

    Make sure you’ve liked and subscribed to our YouTube channel where we upload new content every week!  

    If that wasn’t enough, you can also join our friendly property community on the Property Hub forum

    See omnystudio.com/listener for privacy information.

    ASK247: Can I use my bounce-back loan as a deposit? PLUS: Is this Liverpool property too cheap?

    ASK247: Can I use my bounce-back loan as a deposit? PLUS: Is this Liverpool property too cheap?

    This week on Ask Rob & Rob we’ve got two great questions around location and using the bounceback loan scheme to fund your deposit. Is it a good idea?

    It seems a number of people are turning their head towards Liverpool for investing in property right now, and this week we’ve got another question regarding properties in the area.

    So let’s get to it.

    The first question is from Mohammad. He’s recently acquired £50,000 from the bounceback loan scheme through his limited company and he’s now wanting to know if he can use this money as a deposit for a buy-to-let property? 

    There’s been a bit of confusion and uncertainty around this topic as it’s not really been clear as to whether you can use the bounceback loan as a deposit. 

    So, do The Robs think it’s alright to use the loan as a deposit or do they think Mohammad should reconsider?

    Our second caller of the week is Harry from Bristol. He’s asking if £70,000 is too cheap to purchase a decent property in Liverpool? 

    If Rob & Rob think it’s too low, Harry wants to know what they think would be the minimum they’d pay for a property in this location.

    Naturally, there was only one Rob to take on this question, so it’s over to Rob B to answer this one.

    Does Rob B think that Harry should be looking at paying more than £70,000 to get himself a good investment property? 

    Tune in to find out.

     

    Do you have a buy to let or property investment related question for Rob & Rob? You could feature on the next episode by giving us a call on 013 808 00035 and leaving a message with your name and question (normal UK call rates apply). 

    Or if you prefer, click here to leave a recording via your computer instead.

    The next question on Ask Rob & Rob could be yours. 

    Have you joined us over on the Property Hub Forum yet? Our online community is friendly, informative, and the members are waiting to welcome you with open arms. So get yourself over and introduce yourself.

    See omnystudio.com/listener for privacy information.

    TPP119: A property viewing check list you can use

    TPP119: A property viewing check list you can use

    When you’re viewing a property, it’s useful to have a checklist to make sure you don’t miss anything important – whether that’s to do with the area, the property itself, or the vendor’s situation. A listener asked us what we look out for at viewings…but while we have our own lists, we’re never going to […]

    The post TPP119: A property viewing check list you can use appeared first on The Property Hub.

    See omnystudio.com/listener for privacy information.