Ajay Ahuja Blog Post on High Yielding Properties

High yielding properties enable me to:

  1. Employ a field manager to run the properties on the ground
  2. Employ an office manager to run the administration of the portfolio
  3. Employ a dedicated credit controller to chase rents so I get paid in full and on time
  4. Employ a maintenance manager to fix anything in reasonable time without paying hefty call out fees

High yield enables me to pull in a good profit without doing much.  If this does not float your boat I do not know what will!

However the best thing about this is you get to own a substantial asset base which will rise with inflation but on an amount far in excess of any savings I could ever acquire.  In short this means I will get rich in the long term GUARANTEED.

You often toy with the idea of selling up, cashing in and putting it in a high interest account.  But the horror stories such as BCCI, Equitable Life, Lehman Brothers etc. simply reinforce the theory that your money is only ever safe in assets NOT cash.

As long as you keep your rent up with inflation then you are on a guaranteed win EVEN if you buy badly.  As long as you can hold out during the void periods and/or high interest rate periods then you will surely win.

The way you can assure yourself of this is to look at what a property was going for in 1985.  So let us say the nice 3 bed semi-detached house you live in could have been bought for £25,000 what would the rent be today?  A house that cost £25,000 back then is probably commanding a rent of £1,500 today so it would be pretty damn difficult not to draw a healthy profit from such a property.

So is it a win win situation? Do I win on cashflow and on capital growth? Well yes!  If you can highly gear up (i.e. borrow) to buy a high yielding asset then you are sure to become rich in the normal to long term.  I have been doing this for 12 years now and I am not as rich as I want to be (who really is!) but I have to admit to myself: I am comfortable.

So how is your situation? If you are comfortable then that is great.  If we be really honest with ourselves being comfortable is probably as good as it gets.  Only our ambition puts the dampners on our success.

If you are not comfortable, want to be comfortable in the normal term and rich in the long term then read some of my books.