The 2 year cashflow rule that will build your buy to let property portfolio…

The “2 year cash flow” is one of the most important concepts you’ll learn when building a property portfolio. It’s a simple formula that most people forget to calculate prior to committing to buying a property, yet it will guarantee the long term health of your portfolio, even through market downturns.

In most cases people will work out the initial acquisition costs and as long as they have to the funds required to purchase this they will dive head first into purchasing.

Funnily enough, even though some of these people will consider the monthly mortgage they will neglect things like service charges & ground rent. Whilst this is a problem by far the biggest problem lays in the fluctuations in interest rates.

Capital growth will make you money but not having capital growth is nothing more than a frustration. The real major issue is a lack of cash flow to pay the mortgage and interest rates are the thing that most affects your ability to pay your mortgage.

I have never heard of a house being repossessed due to negative equity but l know 100s that have been due to not paying the mortgage (lack of cash flow).

Now this whole issue is negated if you buy when interest rates are at their highest but you never know this for sure (except in hindsight).

I have a client who every time that interest rates go up 0.25% he has to find an extra £4500 each month. You can imagine how much that would hurt if he hadn’t made allowances.

OK, so l think we both realise how essential it is to consider the cash flow of each property. So now lets consider the mechanics of working it out to ensure you both take full advantage of your capital and don’t take any unmanageable risks.

To read the rest of this article, click thru to my blog: The 2 year cashflow rule that will build your buy to let property portfolio…

The “everyperson” house rule

The one thing I have learned from properties that I have owned is that it doesn’t matter how good the deal is, unless you can get a tenant it will soon turn into a very painful financial decision.

That’s why as part of my two laws of property I also say that the property must be able to attract a tenant.

For me this means looking at the mass market in each area and buying houses they would live in. I call this the “everyperson” house. Obviously the everyperson house will change between areas – London city centre would be a 1 or 2 bedroom apartment valued between x & y and Newcastle would be a 3 bed terraced house outside the centre worth between x & y.

What I am saying is this buy a house that will have the biggest demand for the area. Stay away from huge mansions or low valued properties.

Always think – I’ll buy this, but who will rent it?

I have over 200 property investment articles, videos and podcasts available for free on my blog!

The black, the white and the grey of purchasing new build property

The UK property market is changing and as investors we need to change with it.

The market cycles. Lending criteria change. Rates change and legislation changes. The whole market evolves and unless we evolve with it we potentially risk using structures that are now frowned upon, or in the worst case, are now illegal.

The UK property market is maturing a lot faster than the Australian market that I was watching carefully in the 90’s. Frankly, I’m impressed at the rate of change and I think it’s a positive step each time we remove the various loopholes that exist which put investors at risk either because of their own level of education or because they feel that it’s OK to bend the rules.

I always say that the spectrum of structures when purchasing a property runs from the white through the grey and definitely into the black.

Click to read the whole article at my site: The black, the white and the grey of purchasing new build property…

The two laws of buy to let property

Laws are the foundation of building property successfully. If you break the laws of property you don’t go to jail but it will generally cost you money and sometimes if you really break the laws it will cost you a lot of money.

I have only two laws when purchasing buy to let property the rest are simply principles that I generally adhere to because they work for me.

So let’s jump straight into the first.

1st law – Always buy below value.

Let me start by contradicting this law. Investing in property is a long term job so it really doesn’t matter if you pay over the odds for a property. Given enough time you will make money. BUT%u2026 (and I love that word) but why would you pay full price if you can pay below market. Buying below market also means that you have greater flexibility and a quicker return.

Working with a property club will give you access to property below value. Even if its initial value may be over the odds the net result will be below value.

Click through to the rest of the article for the second and more important of the laws of buy to let property: The two laws of purchasing buy to let property…

Buy to let property investing. The facts.

Welcome to our buy-to-let guide. Whether you’re investing in your first buy-to-let property or you’re already a seasoned landlord, we have tips and advice to help you make it a success.

Over the coming months we’ll look at all the important areas of buy-to-let investing:

- It is too late to jump on the buy-to-let bandwagon?
- How to use buy to let property to retire rich
- Why investing in new homes could be disastrous
- Buy-to-let traps to avoid in a tight market
- Three booming foreign property hotspots
- Has the buy-to-let bubble burst?
- Why cheap flights push up house prices

and many more… so stay tuned!