PROPERTY INVESTMENT UK | 2019 TIPS FROM SIMON ZUTSHI
- Articles, Blog

PROPERTY INVESTMENT UK | 2019 TIPS FROM SIMON ZUTSHI


Hello, in this video I want to share with
you some valuable content all about property investment in the UK. So my name is Simon
Zutshi, I’m the author of Property Magic, the Amazon number one property bestseller.
I’ve been investing in properties since 1995, and I’m the founder of the Property Investors
Network, which has 50 network meetings all over the UK. Now, let me tell you why I believe investing
in the UK is such a great place to invest. First of all, we live on an island. That means
there’s a limited supply of accommodation, but there’s an ever increasing population.
The population is increasing due to increasing birthrate, longer life expectancy, and obviously,
immigration. Now, obviously, with Brexit, there’s a good chance we may not get as much
immigration into the UK as has happened in the past. But, even if not a single person
came to live in the UK, the population would still grow for the other reasons I’ve mentioned.
So with a growing population and a limited supply of accommodation, what that means is,
the long term trend for property prices and rental values is up. This is also a very safe
place to invest, protected by law, you could own the freehold of the property, which means
you own the property, the air above it, the land below it, and no one can really take
that away from you. So it’s also a very safe place to invest. Also, banks are very happy to lend you money
to invest in property. Now, typically, you have to put down a deposit. If you’re getting
a buy-to-let mortgage, which is a special mortgage you get when you buy an investment
property, most banks want you to put about a 25% deposit in, and then you borrow 75%
from the bank. Now, this is where many people struggle, because they feel, “I’ve only got
a certain number of 25% deposits. I might only be able to buy one, or two, or three
houses.” When actually, there are many creative ways of investing in the UK, while you don’t
actually have to use much of your own money. You could use other people’s money, and there
are certain strategies you can use, such as purchase lease options and rent-to-rent. We
don’t actually buy the property, but you can get cashflow from a property asset you don’t
actually own. Now, many of these strategies I explain on
other videos on this channel. So if you want to get access to those, I suggest you subscribe
to the channel, and obviously, as the videos come out, you’ll be notified about that. But,
let’s get back to investing in the UK. Now, the great thing about the UK is that there
are many major cities. And, when you’re buying property, I think it’s good to buy property
in an area where you have an increasing population. Now, what causes an increase in population?
Well, if there are jobs being created, if there are hospitals and universities being
extended and growing, those all attract people into the area, those people need accommodation.
So if you can buy and invest in areas where you have the population increasing at a faster
rate than other areas, you should have higher demand for those rental properties, and you
should get capital appreciation than other areas of the country. When you invest in a property, you need to
understand the market is going to be cyclical. Prices don’t always go up. They go up and
they come down. Sometimes, people think when prices come down they’ve lost money. Well,
that’s not actually the case. You only lose money if you buy high and have to sell low.
If you don’t sell, you’ve not actually lost any money. As long as you can afford to hold
the property while prices recover, you’re not losing anything at all. So if you’re investing in property, there
are five golden rules you need to follow. I do talk about them in my book, Property
Magic. Let me give you a very quick overview of those. The first thing is, you want to
buy from what we call motivated sellers. These are people for whom the speed and certainty
of a sale is more important than the amount of money they get. What that means for you
is you can buy at a lower price and get flexibility on the terms, such as they might agree to
things like purchase lease options and exchange day completion. Golden rule number two is,
you only ever want to buy in an area with strong rental demand. It’s really important
if the current tenants move out, you want to make sure there are other tenants who are
happy to move in to the property and rent the property at a fair market rent. If you
don’t have tenants, that’s called a void period, which means you have to cover the mortgage
and all the costs. So it’s really important to only buy in areas with strong rental demand. That’s linked to rule number three, which
is we only ever buy property that gives you positive cashflow. What this means is, at
the end of the month, when you bring all the rent in, you take off the mortgage, the insurance,
the management, the maintenance, and anything else you’ve got to pay, there should be some
money left over, some profit available for you. Now, you have to pay tax on your profit,
but that’s no different to if you have a normal business, make a profit, you got to pay tax.
If you have a job, you’ve got to pay tax on that. So paying taxes is something we all
have to do, it’s no different for property investors. In fact, if you’re paying taxes
it’s a sign you’re making money. Rule number four is, we want to hold a property
for the long term. As I said, prices go up and down. If you try and judge the market,
you probably won’t get it right. If you’re holding for long term, that’s where you create
the real wealth. They do say in the UK, “Every 10 years property prices double.” That’s not
actually strictly correct. The average over about 60 years is every 10 years prices have
doubled. But, it’s an average, it doesn’t happen every 10 years. Sometimes it’s happened
in five or six years, sometimes it might take 15, 20 years, depending on where you are in
the market. Again, trying to judge the market is not always the best thing to do, because
you might not get it right. So hold for the long term and it evens out those mistakes,
as long as you’re making cashflow. Then, golden rule number five is, you want
to have a cash buffer. Some money put aside, it could be on a credit card, it could be
money in a bank, to cover any unexpected things that aren’t covered by insurance. If you have
some bad tenants and the property’s damaged, and you don’t have insurance for that, you
can get it fixed and get it rented really quickly, to get cashflow coming in to you
again. So follow the five golden rules, it will minimise
the risk and maximise your return. I believe the UK is a great place to invest. If you’re
actually from overseas, whether you’re a foreign national wanting to [inaudible 00:05:59] in
the UK, you can do that. If you’re an ex-pat living overseas, you want to invest in the
UK, again, you could do that. I’d suggest you tap into local people who can help you.
You want to get some local knowledge, and you can build a power team that can help you
become a more successful investor. So I’d encourage you to invest with knowledge,
invest with skill. If you like this video please like it, please comment, and maybe
subscribe to the channel so we can share a lot more valuable information with you. My
name’s Simon Zutshi, I look forward to seeing you soon.

About Gregory Ralls

Read All Posts By Gregory Ralls

6 thoughts on “PROPERTY INVESTMENT UK | 2019 TIPS FROM SIMON ZUTSHI

  1. Thank you for your tips! Good take on how to minimise your risk and maximise your returns through investment in the UK. Here is an interesting video which I found that talks about various reasons to invest in the UK: https://www.youtube.com/watch?v=SqsxdCREzN8

  2. Which strategy and location(s) would you recommend to somebody who intends to build a 100% PASSIVE income portfolio and move abroad ?

  3. Lots of false premises at the start. An island doesn't make our sovereign space any more limited than any other country's that has borders; the population of our island is not increasing; there's plenty of space in the country to build – it's not a crowded island; regulation in the UK is actually pretty weak compared to other countries (especially when you're buying offplan leasehold properties as a lot of overseas buyers do) – investors have virtually no protection in many cases; banks are actually not very willing to lend unless you've got a steady, high-earning job.

Leave a Reply

Your email address will not be published. Required fields are marked *