INTRODUCTION

I started with nothing. I bought my first property when I was 24 with £500 and now, at the age of 29, I own 50 properties and earn an income in excess of £200,000 per annum. It’s not difficult but it requires DEDICATION, PERSISTENCE and DISCIPLINE. If you lack any of the above, then forget it.

My dedication, persistence and discipline about being rich were not driven by money but by freedom - the freedom to do what I like when I like without worrying about my boss or my wallet. Freedom does not have to be your driving factor it could be a brand new Ferrari or private schooling for your children. Whatever it is, it’s this that will keep you going. With the right properties, financial products and tenants, there is no doubt you will succeed, and this book will show you how to go about finding the right properties, financial products, tenants and more.

So why choose property? Why not invest in stocks and shares? The first reason is that property carries an inherently low risk factor. Houses will not go out of fashion or become obsolete like services or products. They are an essential for us all. That’s why house prices have consistently doubled every 10-15 years over the last century. Coupled with the fact that monthly rental values rise with wages (which is a function of inflation) and that the mortgage payment is relatively fixed (only altering with interest rate fluctuations) the profit element always rises. In addition, after the mortgage has been paid the rent is all profit. That’s why many people see investing in property as their pension fund.

The second reason is basic economics. With an expanding population, fragmenting families, an increasingly mobile workforce, fewer properties for sale and fewer council owned properties, THE DEMAND FOR RENTAL PROPERTIES EXCEEDS SUPPLY.

The third reason is an inherent attribute in all of us – we are lazy! To play the stock market properly requires lengthy research, ongoing monitoring and nerves of steel for the duration of the investment. That’s why three out of four private investors lose money. When a property is set up properly, you just sit back and watch the money roll in.

I am a chartered accountant. I left employment when I was 27 to get into the property business and I must admit, the training I received in accountancy and more importantly, in business, has helped me in my success. However, the principles involved are not difficult to grasp. I bought my first property in 1996 for myself to live in, couldn’t get used to it, and so let it out. I soon realised that the tenant was paying my mortgage as well as my beer money (about £120 per month), and it required minimal effort from me. I thought, “This is easy!” so I bought another one and did the same. 48 properties later…  you get the idea.

So whether you are thinking of creating a multi-million pound property empire or simply buying the house next door to earn a modest secondary income, this book is for you. But before you get pound signs in your eyes you have to ask yourself: Is property right for you? There are four key questions you have to ask yourself:

1. Can I budget well?
2. Do I like and am I capable of dealing with people from a range of backgrounds?
3. Do I like property?
4. Am I a responsible person?

1. Can I budget well?

Are you the type of person who spends their wages before they are earned? Do you often use your overdraft facility and credit cards to fund your lifestyle? Do you make impulse purchases on the high street and then regret them later? Do you wake up in the morning after an evening out and wonder how you managed to spend all of the £100 that was in your pocket the night before? If this sounds familiar then investing in property is currently not for you. Investing in property could be an option at a later date but your spending has to mature. A mortgage is a legal commitment to pay a sum of money on regular set dates and breach of this commitment can result in damage to your credit files and could ultimately lead to bankruptcy.

Sometimes rent from several properties comes in cash on the same day. I might have £3,000 in cash in my pocket and it certainly gives you a feeling that you are £3,000 richer but you are not! You’ve got to pay the mortgage, service charges, building insurance etc. You have to be disciplined enough to bank the cash and not assume that all the rent is profit, which is surprisingly easy to forget.

2. Do I like and am I capable of dealing with people from a range of backgrounds?

The type of people you will be meeting with will be:

Tenants – They can be of any age over 18, from any profession, male or female, from any race or religion. Have you got any hang-ups about a certain group of people?

Estate and Letting Agents – Despite what people say about agents my experience with them is that they conduct themselves in a professional manner. They can be a bit pushy sometimes but you’ve got to expect that when dealing with people whose business depends on the sale or management of an asset worth many thousands of pounds. Are you easily persuaded? Can you stand your ground?

Solicitors – Usually very intelligent people. Can you convince him or her of your intelligence so that they don’t keep you in the dark when you want to know what’s going on?

Lenders – Your point of contact is normally a call centre operator. Are you able to keep your cool to extract the right information from the operator?

Mortgage Brokers – Again, very sharp people. Can you keep up with his calculations? Are you asking the right questions?

3. Do I like property?

There is absolutely no point in getting involved in property if you are not interested in property. Any successful businessman will tell you that if you are thinking of starting a business the first thing you’ve got to ask yourself is if you enjoy the business you are getting into. Do you believe in the product? Is the business you are contemplating something that your mind naturally wanders to? Is the line between work and pleasure blurred when it comes to looking at and maintaining property?

It is your interest in property that will ensure that you dedicate the correct amount of time in order for your property business to succeed.

4. Am I a responsible person?

You have many legal obligations to your tenant, lender and letting agent. Property is a serious business. You have to be aware of these obligations and be prepared to fulfil them. Failure to do so can have serious repercussions, including jail!

WELL IS PROPERTY FOR YOU?

If you can answer yes to three out of four of those questions then you are basically ready for property investment. To be really good though, you need to work on the question you answered no to. If you answered yes to all questions then there is nothing to stop you from becoming a millionaire within the next 10 years, and that is fact. The most common type of business in the last 50 years that made people millionaires is either commercial or residential property.

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(A BOOK BY AJAY AHUJA)

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