Pump up your property investment profits by acting like a professional

Dan Varnaseri
June 29, 2018

The before, during and after essentials of property investment

The objective of investing in property is to benefit from the potential capital gains and rental income that a buy-to-let investment could produce. It’s this money that will transform your life. It’s going to provide the finances to pay for the lifestyle you desire. It never ceases to amaze and dismay me how many investors don’t approach property investment professionally. I don’t want you to make the same mistake.

In this article, you’ll learn how to eliminate emotions from your investment decision-making. Instead of treating property investment like an amateur, you will make wiser choices and bigger and better profits.

Act like a professional before investment

The time to eliminate emotions from your investment psyche is from the very first moment you realise that property investment is the right route for you. This is going to be difficult.

You’ll be buzzing with excitement. You’ll want to speed through the investment, to get cracking on building or adding to a successful property portfolio. I still feel like this with every investment opportunity that comes along. However, I’ve learned that emotions like these lead to bad decisions. I’ve learned to go through the process of objectivising property investment opportunities every single time. This keeps me sane and keeps my portfolio on track. Remember that a buy-to-let property is a box to make you money. It’s not a home for your family. You must:

Act like a professional during the investment process

Investing – the act itself – is a process. Though in many ways it is like buying a home, it is also very different.

For example, the mortgage process is different. You must finance with a buy-to-let mortgage, and not a homeowner mortgage. Lenders must assess financial viability against rental income. Affordability will be measured at an interest rate set by the Prudential Regulatory Authority. This rate will be above the actual mortgage interest rate the lender charges you.

You should prepare early for property taxes. There are expenses and costs that you can use to reduce the tax you pay, but the changes to the way that buy-to-let mortgage interest payments are treated mean that you must consider how to structure your investment. For many people, setting up a limited company to invest in property can improve profits by reducing tax liability.

The most successful property investors surround themselves with people who are more knowledgeable and have different skillsets. They outsource to experts, including:

  • Solicitors to check through contracts
  • Accountants to advise on tax
  • Mortgage brokers to source the best financing

Act like a professional after completion

After you’ve made the investment, you will be faced with a whole new business issue: you now own a buy-to-let property. Now comes the hard work!

  • You need to find and vet tenants, deal with their requests, set the rents (and increase them), build a good relationship with your tenants, and never let your emotions get the better of you
  • You’ll need to have good people skills
  • You’ll need to be available 24/7
  • You’ll need to build a network of maintenance technicians, electricians, Safe Gas engineers, and others to maintain your property
  • You’ll need to keep on top of all the 178 landlord laws

Could you do all of this successfully? Me neither. Which is why I use an investment property manager to manage all my properties. No hassle. My time remains my own. And I can offset their charges against my rental income to reduce my tax liability.

In summary, act like a professional investor from first to last and beyond. Build a network of competent and experienced professionals to aid you. Remove emotions from your decision-making at every step, and your property investment should reach its full potential.

In my next and final article in this series, I’ll wrap up by summarising the seven things to consider before investing. Meanwhile, if you’d like to discuss your lifestyle goals and how property investment could help you achieve them, book a property investment strategy consultation by contacting Gladfish today on +44 207 923 6100.

Cheers,

Dan Varnaseri


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Property Investment Profits


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