CONTENTS: INTRODUCTION, 1 - SO WHY BUY A PROPERTY?, 2 - IDENTIFY YOUR STATUS RANKING, 3 - CALCULATING YOUR BUYING POWER, 4 - UNDERSTANDING THE MORTGAGE GAME, 5 - INCREASING YOUR BUYING POWER BY INCREASING YOUR STATUS RANKING, 6 - INCREASING YOUR BUYING POWER WITHOUT INCREASING YOUR STATUS RANKING, 7 - GETTING VALUE FOR MONEY, 8 - REFERENCE CHAPTER
I bought my first home with a £500 gift from my mother in 1996 for £49,000. I can already hear you say ‘it was a lot easier back then!’ Ironically is was harder to buy a property with not a lot than it is today. The mortgage market has really opened up and now you can buy a property with nothing and get a nice cash gift of up to 25% of the property’s value.
Okay, we have seen prices rise beyond belief, with the house that I originally bought being worth around £130,000 but lenders have moved with the market and more! Mortgage companies, banks and credit card companies are begging us to borrow. Every time I watch TV I would see at least one advert for a loan of some sort or the other. This will not last forever. You have to take advantage of this before the lenders get their finger’s burnt. I have done so which has amassed me a wealth of over £6million.
Now I’m not saying to strap yourself up with unmanageable debt as a lot of people are doing. There are a lot of people borrowing and buying holidays, cars and unnecessary home improvements with no real plan of how to pay the lenders back. What I am saying is that you can buy a ready saleable asset, being a property, with debt that is manageable from whoever is willing to lend to you. If you’re a good credit risk then you’ll have the pick of the bunch. If you’re not a good credit risk you’ll still be able to borrow at quite favourable rates.
To own a home these days you need to be cleverer than the rest. Prices are supposedly beyond the reach of the ordinary man. This is because the ordinary man is not financially aware. If he were he would realise that a property worth seven (yes seven!) times his income could be bought. He would also find out that he would probably pay less than what he is paying in rent as interest rates are at an all time low.
Now we all know that interest rates are at an all time low. The only way is up! Currently the interest rate will probably go down because the Euro rate is 2%, the US rate is 1.25% and Japan is 0% and we’re at 3.5%! But you have to be prudent. Interest rates could rise to 10% within 5 years – no one knows which way they will go. Anyone that claims they do with certainty is a fake. If they had the capacity to know this then they could predict catastrophes such as September 11th, the Iraqi war etc.
As long as you’re fed up with paying rent, want to save money, want to make money, willing to borrow and accept a certain degree of risk then you’ll be on the first rung of the property ladder before you know it. So before we get into it let me tell you about my property ladder…..
My Property Ladder
Well, I bought my first house for £49,000 in 1996 at the age of 24. I rented it out in 1997 and moved in rented accommodation for 3 years but continued to buy, whilst in rented accommodation, and ended up with 9 rental properties by the year 2000.
I then bought my second property to live in in 2001 for £132,000 with a 5% deposit. Then I bought my third property for £240,000 with a 5% deposit in 2002 and I still live in it now. The second property is also rented out. I bought rental properties continuously during this time and I still own all the properties I have bought and they are all rented out. I am now 34 and currently looking for my next property for around £2m and I am debating whether to sell my first two properties.
I currently own over 150 investment properties and earn an income in excess of £300,000 pa from my portfolio. I have obtained over 250 mortgages and re-mortgages in my time which certainly keeps my solicitor busy.
So, Why Should You Listen To Me?
I am a chartered accountant with my own practice Accountants Direct. I know the finance industry inside out and I have first hand experience through my property investments. I have published a number of books on property investment and I have applied this knowledge to first time buyers. I have grown my business from nothing to being worth over £10m in less than ten years. I have done this by never accepting ‘No’ for an answer. I have grown unorthodoxly. You could say I have ‘ducked and dived’ to get what I’ve got and I want to show you how you too can get what you want – you’re ultimate dream home!