How to be a winner in the game of property investment

Not quite Monopoly, but property investment is like a game

When I was younger, one of my favourite things to do was play Monopoly with my parents. Little did I know that so many years later I’d be comparing the property investment board game to the real thing. Like all games, once you know how to play it, the art of investing in property is a game in itself.

Winning is all about property investment strategy

No matter what way you slice it, coming out on top in Monopoly depends on employing the right investment strategy. When I first started playing I’d buy up every square, I landed on until I’d run out of money. That property investment tactic pretty much only left the big blues – Park Lane and Mayfair – which I never had enough money to buy.

As we moved our pieces around the board (I was always the Rolls Royce), I’d be pretty satisfied with myself. Okay, so I wasn’t collecting any high rents because I didn’t have a set to build houses, but I owned more property than anyone else.

Then disaster would strike. My father, quietly and carefully, somehow managed to nab himself the highest priced streets, and somehow I’d always manage to land on them. Before I knew it, I’d mortgaged all my properties and then lost the whole board to my father.

Then there were the Chance and Community Chest cards. I always got fined. It got to the point where I was practically begging to be sent to jail without passing “Go!”.

Slowly, I started losing by less. I started thinking about what I was doing and was better at understanding the property investment game. I learned to ignore some streets when I landed on them and bided, my time until a better opportunity came along. Eventually, and after one mammoth game that lasted almost the whole weekend, I beat my Dad. The first time ever.

That was when he put the Monopoly board away for the last time. “We’ll play Chess next weekend,” he told me.

5 rules of the property investment game

To be successful when investing in property, you’ll need to play through each of five facets or property investment.

1.     Understanding investing in property

Okay, so the first thing is to have an understanding of property investment. This understanding begins with knowing what it is you want to achieve, and then adding on the nuts and bolts, which include:

  • What responsibilities you taking on
  • How property investment makes money
  • Financing and being prepared for financial shocks
  • What happens after completion, and how you stay profitable

2.     Research the market and the property

Selecting an investment property is easy when the market is going up. Actually, it isn’t – it just seems that way when your portfolio value keeps rising. Then the market turns, and you realise that you’ve bought a dog.

When you get offered what appears to be a great property investment opportunity, the profit rests on your shoulders. Learn to research the area that you’re thinking of buying into, looking to make sure that all the property fundamentals stack up: when you’re investing in property, you’ll need to buy the property, not the deal. (This was the big step in learning to beat my old man on the Monopoly board.)

3.     Do your due diligence

Go over your numbers, make sure that the cost, running costs, and potential income are workable and that there is some ‘wiggle room’ in the numbers: there is no point in buying Park Lane if you haven’t got enough excess cash to pay the rent on Old Kent Road.

4.     Partner up!

The most unsuccessful property investors I know are those who try to go it alone. Then comes the ones who choose the wrong partners. Think about what your abilities are and how you can best use them.

Be honest with yourself, and admit where you’re short of experience or knowledge. Fill those gaps with partners who have the experience and the knowledge you need to make a difference. Think about the whole spectrum of investing in property – from sourcing an investment property to finding tenants, renting it out, and maintaining it in a fit state.

5.     Make a decision and take responsibility

If you’ve taken the time to get yourself a good dose of property investment education, and heed the above five rules of property investment, you’re ready to take the next step. Only it won’t be a leap of faith, or a walk in the dark: you’ll have your eyes wide open, and you’ll know it’s the right decision. With this step comes the acceptance of responsibility. Responsibility for the choice of property and responsibility for the income and capital gain that you’ll benefit from for years to come. Are you ready? Is there anything holding you back from taking that first step? Comment below and share your opinion.

If you have any questions, please do not hesitate to call the team on +44 (0)207 923 6100

Live with Passion and Fun,

Brett Alegre-Wood

 

About the Author

Brett has over 20 years experience in all facets of property, he owns various companies centred around property and is the driving force behind the education and training at Gladfish. His companies have sold over £850 million in UK and London property and he manages over 1200 properties through his estate agency chain. Today he shares his time between UK, Australia and Singapore. He is married to Arlene and together they have 4 kids.

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