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With all the hype of a rising market, the "wealth creation" seminar rooms are once again brimming with newbies with stars in their eyes.
I thought I would share a few things that these courses won't teach or tell you ....
1. If you buy a property and refurb it, it won't automatically be up-valued to the amount you need to recycle your cash.
7 reasons why a property may not achieve an up valuation after refurbishment
2. Tenants are people, not an automatic rent payment.
The property you supply to them is a "home", not a money making machine for you to go "kerching!" without meeting your numerous responsibilities as a landlord, of which there are now over 140 statutes and regulations that landlords need to adhere to in order to be compliant.
3. You will end up with the tenants you deserve.
4. There is no such thing as a "first time buyer 100% BTL mortgage".
5. Setting up a BTL and collecting the rent is not the end of the process, it is the beginning of a business.
6. Property does not automatically double in value every ten years.
7. Buying a property and just covering the mortgage with the rent - known as "washing its face" - is not sufficient cash flow for a viable investment.
8. To set up a lease option, you need a Consumer Credit licence.
9. When things go wrong in property, it can be very expensive and you do need a contingency fund.
10. You DO need to visit a property before purchasing it. You should never buy a property unseen.
10 reasons to buy an investment property within a 10 mile radius of where you live
11. The property deal they are offering you 20% BMV probably has an over-inflated price to make it seem like you are getting a discount. If it is 20% BMV, then you have to understand the reasons why.
There are viable reasons and there are deadly reasons, but you won't be taught the difference.
12. Property is never "one size fits all". You need to understand your personal financial situation, your personal goals, your attitude to risk, how much time you have to dedicate to it.
Property strategies going head to head.
13. As a landlord, no one can divest you of your responsibility to your tenants. Not even a lettings agent on a fully managed service. Your tenants safety and well being is down to you. The buck stops with you.
14. For vanilla BTL mortgages you DO need circa 25% deposit and there are significant costs associated with buying a property and setting it up for rental.
15. The top most deadly landlord pitfalls ... and how to avoid them.
Nick and I fully support authentic property education ... its one of the reasons we founded Property Tribes five years ago.
However, these seminars can turn into high pressured sales environments, and people get caught up in the rush and hype.
Remember, the true way to wealth is sustained and intelligent action, not buying a ticket to see a Unicorn.
Footnote: "You can never learn less". All seminars delivered by all people can teach you something. It might not be what was intended, but you will learn something. You can never write off completely any seminar because of this.
However, the critical point to any form of any high value investment is "what do you want it to do for YOU?". Where are you now, both professionally and financially, what can you cope with, both now and in a worse case scenario?
Only YOU will know the answer to these questions.
By their very nature, a seminar cannot give you the complete information that will take you through the journey that YOU need to go through. The volume of information you need is too vast for one seminar, or even a string of training days.
Having said all that, seminars are great motivators and can be a launching pad, as indeed a seminar was for us.
But the caveat is, and always will be, "don't be sold to" and only buy what is good for YOU and takes you a step closer to YOUR goals.
Due diligence will protect you on your property journey. Become an expert on it and you can achieve your goals.
Due diligence guide from industry professionals
What other things do wealth creation seminars not teach newbies that you think they should be aware of?
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
(07-02-2014 04:19 PM)daniel_booth Wrote: 16. "You have to start somewhere" is the excuse used to over-leverage and use creative strategies.
What the seminar won't teach you is that you should look at the route cause of why you're starting with no money.
Address that issue BEFORE getting into Property investment, i.e. career change or start a business.
If someone can't afford a deposit, they wouldn't have a cash reserve and shouldn't be borrowing hundreds of thousands of pounds to control expensive assets.