Unfortunately, for some property investors the experience of buying an investment property or a buy to let property can be a bit like a jockey’s experience of running the Grand National. They carefully negotiate the hurdles of finding a property, doing their due diligence and analysis, and of obtaining a ‘decision in principle’ on the…
Sensitivity Analysis graph (du dil 7)So far we have been thinking about single factors or one-off events. But the property market is highly complex and there are numerous things that can affect the performance of the market as a whole, and individual properties in particular. So you might want to do an analysis that considers…
Let’s have a more detailed look at how we can do some risk analysis. Often the different scenarios are not as black and white as our rudimentary analysis suggests and we might want to assess the risks of, and look at the consequences of, events within a range of possibilities. What do I mean by…
Having asked the relevant questions, you may identify a scenario that could happen. Whether it is, in reality, a worst case scenario is to some extent subjective and probably a matter of semantics. But if you have identified a possible negative outcome of owning a particular property, you will need to clarify what this means…
In my experience, from having spoken to, and from having coached, numerous would-be investors, in most instances the limiting belief behind both of these behaviours is “fear” – usually the fear of making a mistake. This in turn feeds the fear of “losing everything”. This might sound very bleak but, again in my experience, without…
I’ll give just a word of explanation about the question “Am I paying too much for the property?” This isn’t necessarily implying that you check that you are not paying more than the open market value. It is suggesting that you check against whatever criteria you have set yourself to recognise a good buy. So,…
Thinking of the three principle property investing strategies, we could ask a series of questions like these: If our strategy is to buy and hold property for income: Am I paying too much for the property? Will I be able to let it once I’ve bought it? Will I be able to obtain the rent…
When you say the term “due diligence” to most investors they will naturally think about the basic checks anyone undertakes before buying a property. In fact, most investors will probably think of due diligence as being something they do after they have agreed terms to buy a property – having a valuation and survey, appointing…
According to some we’ve just entered into the buy to let boom age and things are just about to take off. For the first time in a long time all the major house-price indices are showing positive growth month on month. First time buyers are returning to the market, transaction levels are up, mortgage lending…
Hand in hand with buying BMV, the investing community has embraced ‘going back to basics’ and concentrating on ‘the fundamentals’. In particular, most, if not all, investors are intensely interested in cash-flow. As a minimum investors want to buy property which at least breaks even, although many will not be satisfied unless they find a…