Is property still worth investing in? – Property Rant 023

What else do you really have to invest in? But it's more than that despite all that the government has thrown at property investment things are still looking pretty good. I rarely if ever meet a successful millionaire, business owner or investor that doesn’t have property as a basis. This has not changed, and certainly, in the UK the supply and demand are still the biggest concern.

But never be deceived into thinking that what is sold as fundamentals aren’t actually just a deal...

Video Transcription :

Hi, guys. Property Search... Think Gladfish.

So, I guess today what I want to cover was is property investment still a good idea. Is it still a good investment vehicle? And I think the answer is a resounding yes. I mean, if you think about, in the U.K., we've been through this period where the government has really started to clamp down, and really started to look at, well, effectively raise taxes against landlords and make it even more difficult for landlords to get involved.

So it's on two fronts, so you've got the stamp duty and the mortgage deductibility side. You've then got the other side, which is the change in the law, the mortgage market review which was done by the EU Mortgage Directive. And when you factor in those things, yeah, you can sit there and go, "Well, actually, this is an affront to all investors, and, you know, is that something I really want to get to?"

So, my first point here is what else have you got to go to, realistically, you know? Most people don't know shares. They don't trust shares. You know, I mean, what it seems to be is the government is moving us towards where they want everyone to put their investments into pension-type investments, into, you know, index tracker types of investments. Investments where your investment, rather than going to a single asset, goes into a broad range of assets. And so therefore, you know, you're "diversified". And, look, diversification really is for moppets to some degree.

If you know what you're doing, it doesn't really make sense. You know, once you know the rules of the game, and you apply the rules of the game, then you make money. And that doesn't mean you'll always make money, you know, but the reality is, because, you know, the market cycles and things like that, but I think the key here is despite what's gone on with all the changes, property is still a favorite amongst most investors, you know.

I don't ever meet a wealthy investor, a millionaire investor, you know, a multi-millionaire investor, a business person, I don't care who it is, that doesn't have property as a basis for their wealth, you know. So, if that's what the millionaires and successful business owners and people like that are doing, then why wouldn't you? And why wouldn't you continue to do it?

What you have to do now is you've got to understand the tax environment that you're in, okay, and to be fair, once you understand the basics of the tax environment, then, you know, it's actually not that hard. Nothing has much changed. You're still buying a property with good, solid fundamentals. Shops, schools, transport, major employers, major investments. You've heard me go on about that all the time. That is the basis of everything. If you buy something with good, solid fundamentals, you will make money from that investment.

Now, yes, you have to buy at the right price. You've got to rent it out and make sure you're making income and all those sort of things, so you can hold it. But, you know, everything starts with fundamentals. And when you apply fundamentals, the problem I see is most people look for a deal before they look for fundamentals. And a lot of people, or a lot of sales people, disguise a fundamentals which are actually a deal.

So, they make it sound like it's fundamentals, when the reality is... And a classic example, I saw a developer's brochure, and it had... Heathrow Airport was a 131 km away. Now, that's miles away, so they're actually using that in their development brochure as if to say that's a benefit, you know. Well, I can tell you that's 131 km of literally driving through traffic, which oftentimes...and, you know, you've got to find the m25 in this case. And it's kind of like you sit there and go, "Is that really fundamentals for that property, or is that the dressing up of the fundamentals?"

And it's often the dressing up of the fundamentals. But, look, coming back to it, you really don't have any other choice of what to invest in, you've got to do that. To a large degree, the stamp changes and tax changes... A lot of people are already adjusting to that. I'm actually launching a product in the next few weeks, which will basically tie them all and focus on landlord or investors who want to, not take advantage of the tax changes, but mitigate the tax changes. And effectively what it means is you've got to become a professional investor. You have to. There's no, you know, "I'm a beginner. I've got a couple of properties, and, you know, so therefore I'll get a, you know, a leg up." The government's removed that. They've basically said, "Unless you're a professional investor, we don't want you." And they may not have come out and said that, but that seems to be their actions that they're taking, you know. But it's not actually all that bad. And I'll qualify that in saying, yeah, I'd rather have it the way it was, but, you know, we're still going to make money.

The U.K. still has a shortage of property. You know, there's still good things going on. There's a building boom. We're going to build more property. There's lots of reports coming out about that. So there's huge opportunities for investors. So don't be blind-sided by the BS, you know. Focus on the really important stuff which is fundamentals, which is the supply and demand, which is much bigger than fundamentals. Because the overall supply and demand in the U.K. looks good. And, you know, more than that is the fact that London may have eased off a bit, but the reality is the rest of the U.K. is now taking up and picking up the slack.

And, you know, if you're not looking outside of London at your Manchesters and your major cities, you know, and some of your... You know, even towns now are starting to talk, you know, up a good game. And so that's great, because that's good for all investors. It means that people have been sitting around for the last 10 years waiting for their property to move at all are going to start to see that happening. And so that's good news all around.

So don't be blind-sided by, you know, the hype and the BS and the media saying how bad things are, because they're trying to sell newspapers.

Okay, guys, have a good day. Live with passion.

Brett Alegre-Wood
February 11, 2017

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