It is easy to see why Rightmove is happy with this situation. They have expolited their dominant market position to consistently increase their profits since launching the website in the year 2000.  However, their contentment is not shared by  many Estate Agents who feel unhappy with the high fees they have to pay to Rightmove, but feel they have no choice but to continue paying them, because no other provider can match their market coverage. Their discontent has increased  markedly in recent weeks,  since Rightmove announced that it will be raising prices by a massive 21%  this year.

Aware of this situation, many other websites have been setup with the aim of challenging Rightmove’s dominant position. Unfortunately, as yet, no company has come up with  a strategy that has succeeded in matching Rightmove. The brands that have come closest to doing so are probably Zoopla, Findaproperty and Globrix, but individually they remain some way behind Rightmove.

However, in October 2011, an anouncement was made that  could change the online proprerty portal landscape in the UK for good.  This was the confirmation that Zoopla and  the Digital Publishing Group (owner of the Globrix and Finda Property brands) were intending to merge their businesses in an attempt to create a credible alternative to Rightmove, with enough marketing muscle to  gain significant market share.

Estate Agents greeted the annoucement with excitement and optimism that this might bring their online marketing costs down. However, after the fanfare of the October announcement there was little further comment on the merger from either Zoopla or DPG in the following months. At the start of 2012, both companies launched expensive marketing campaigns promoting their own brands separately, which quickly led to rumours of problems with the merger.

Zoopla were quick to deny that their were any problems and said that merger talks were progressing as planned. However, it emerged this week that the Office of Fair Trading (OFT) is investigating the merger. This has angered many estate agents who feel that the merger, rather than being anti-competitive, is  the most pro-competiton development in the industry in the past decade.

A number of Estate Agents revealed that they had received comprehensive questionaires from the OFT asking for their views on the merger alon with details of their usage of online marketing portals. Zoopla, publicly at least, appear unconcerned by the OFT investigation, commenting that an investigation is normal, and to be expected,  when a merger of such scale takes place. Their spokesman pointed out that “agents have been crying out for a genuine competitor to Rightmove for years” and said that they are confident the deal will be approved by the OFT.

The Zoopla spokesman also clearly stated their intention to  take on Rightmove by offering a cheaper  alternative solution to estate agents, saying: “We intend to change Rightmove’s dominance by being the most cost-efficient advertising option for agents and creating real competition in the market.”  Such words will, no doubt, be music to the ears of many estate agents.

When a newsreader makes such an announcement, although they often won’t tell you this, they will almost always be referring to the monthly house price data produced by 1 of the five major UK house price indices – Acadametrics, Rightmove, Nationwide, Halifax and the  Department of Communities and Local Government (LCG Index) which is based on Land Registry figures.

However the problem is that these 5 indices are increasingly painting a very different and inconsistent picture. For example, in May 2010 the Halifax Index reported that UK House Prices were still 16% below their 2007 peak, yet the average of all the other indices suggested this figure to be 6.7%

So, why the discrepancy ?

The disparity arises as each index is skewed towards different parts of the market.

Halifax and Nationwide, for example, base their figures on their own mortgage approvals. These provide up-to-the-minute data on prices that are initially accepted by vendors, but only cover a very small proportion of the total number of property transactions, excluding unmortgaged transactions  and transactions funded by other lenders, completely.

Conversely the Land Registry information includes all sales and is based on completion figures, which show the actual price the property was sold for. These figures lag the market by an average of 15 weeks.

The Rightmove Index, compiled by the online property portal Rightmove, tracks vendor asking prices rather than sold prices.

How accurate are each  of the House Prices  indeces ?

In all but the most bouyant of markets, actual sold prices do tend to be lower than asking prices so, whilst the large sample set from Rightmove can provide a good early indicator of market trends, the Rightmove index is almost always going to provide an overly optimistic view of  prices.

The Halifax and Nationwide might argue that their indices reflect the most recent changes in the market and this is a fair point. However there can be no doubt that their indices are weighted more towards the lower end of the housing market and are more reflective of borrowers taking out larger than average mortgages. This is borne out by the fact that the average price paid by a Nationwide or Halifax borrower is 25% below the national average. Such buyers tend to be less affluent and normally take out higher loan to value mortgages which are subject to higher than average interest rates. To compensate for this these borowers are much more keen to haggle prices down. The result is that house price statisitics based on their data alone present an overly negative view of house prices.

Another issues with the Halifax and Nationwide data in recent years is that they rely on a relatively small sample size, especially during times of low housing transaction volume, the relevance of which can be called in to question. This can often produce wildly varying  and volatile data in consecutive  months, such as a 0.5%  fall in prices followed by a 1.5% rise in prices the following month

The CLG index, is based on actually sales data from the Land Registry so cannot be criticized for accuracy. However, with a delay of around 4 months it does not produce an up-to-date picture of market conditions  in a fast changing market.

The most accurate index

Probably the most accurate of the House Price Indices is the one produced for the Financial Times by the consultancy firm, Acadametrics. This is because it incorporates data from of all the other indices to produce it’s own figures. It is initially based on up-to-date mortgage approval figures from Halifax and Nationwide but tailored to include likely Land Registry figures for that month. When the actual Land Registry data is released, the FT figures are changed to reflect them

Debating  the pros and cons of investing in stocks and shares versus investing in property is a popular subject amongst analysts, brokers and investors. This debate is often conducted under the guise  of comparing traditional pensions versus property investment, as most traditional pensions are invested in global stock markets.

Stock market analysts will often accept that property is the better investment in a given year compared to stocks and shares. However they will often fail to take into account some of the major advantages that property investment has over stocks and shares when declaring that stocks and shares have ouperformed property in another year.

For example, a stock market analyst might attempt to promote investments in stocks and shares by stating something like this:

“Last year  average property prices increased 7% and the stock market was up 10% so stocks and shares performed better  and represent a better investment.”

While the facts as stated, in terms of percentage gains, are entirely true, to claim that this automatically makes stocks and shares a better investment is very misleading. It is understandable  that, after giving such figures a cursory glance, you would believe that in the‘last year’ you  should haave been investing in stocks and shares . Indeed that is exactly the conclusion the analyst might want you to reach.

Gearing and the Return on Capital Employed

The Return On Capital Employed  (ROCE) from property in this case  will have easily been far higher. Why?  Because you can borrow money from a bank or other lending  institution to buy property and secure the loan against the property that is being purchased. This means that you only need  to invest the amount of your own money required to pay the deposit on the purchase rather than the full price of the property. This is often referred to as Gearing or Leverage and it is not something that can easily be achieved when investing in shares.

Banks will generally not accept shares as security since they are considered highly volatile .Not only can they go down in value as well as up but, they can in certain instances lose almost all their value in a very short space of time. Companies can quickly hit huge difficulties  due to  factors such as poor management, strong competition and unfavourable market conditions. For example, shares in the HBOS group were trading at around £12 each before the credit crunch hit Britain, only to fall to be values at just a few pence during the height of the crisis. Such volatility simply does not occur in property markets. Despite all the media talk of a crash of epic and unprecdented proportions in the UK property market between 2007 and 2009,  the average house price decline amounted to around 15% at it’s worse.

The power of Leverage can be seen in this simple example:

In order to buy £100,000 worth of shares you need £100,000 in cash,  but to be able to buy a £100,000 property you would typically need £20,000 because you are able borrow the rest from a bank. Banks are happy to secure the £80,000 loan against the property being purchased, safe in the knowledge that people will always need somewhere to live ensuring that demand for the property, and long term price rises, will almost certainly guarantee the safety of their loan in the event of default

After a property is purchased and a mortgage isput in place you are then able to rent the property out to service the cost of the loan and other expenses and in many cases provide extra profit.

Using the above example we can examine the ROCE in 2 scenarios, one in a year where percentage gains were higher in property and another in a year  in which percentage returns were higher in shares.

As you would expect property provides the better return in the year when property prices rose higher than share prices – delivering a massive 50% ROCE with just at 10% rise in prices. However, due to the power of gearing, property also provides a far superior return to stocks and shares (2.5 to1) in the year that share prices rose higher than property prices.

As you can see, the Return on Caital Employed (ROCE) is a far better inidciator of profitablility than the headline percentage return for an asset class.

 Develop a Positive Attitude

Most of you will probably have heard of the movie ‘The Secret’ that took the world by storm a couple of years ago. If you haven’t then I recommend that you check it out on Youtube or get yourself a copy of the video or book. The basic principle of ‘The Secret’ is ‘The Law of Attraction’, the notion that your experiences in life are a result of what your mind focuses on. Focus on failure and difficulties and that’s what you’ll get. Focus on success and you’ll experience success. It’s not quite that simple, you can’t just spend all day thinking positive thoughts – you must also take action of course, but most successful people will tell you that this principle holds true.

Successful people in all walks of life have an ability to focus on the positives and not dwell on the negatives. Everyone experiences setbacks and periods of self doubt, and you’ll experience plenty as a property investor, but it is how we react to them that matters. Successful people will learn valuable lessons from their setbacks but will not dwell on them. They remain positive and look for the next challenge.

Maintain Self Confidence

 If you can maintain a positive attitude you will most likely already have the self confidence required to achieve your goals. In order to succeed in any area of life you must first have the belief that you are a success and be comfortable in what you are doing and trying to achieve. By merely making the decision to look in to property investment, you are taking positive action to improve your future and this in itself should give you a level of self confidence. Confidence and self belief will help to keep you on track through the tough times.

Break down any limiting beliefs

Any blocks, or limiting beliefs, the “Oh I couldn’t possibly do that…”  type of  persistent thought, need to be dealt with; and eliminated. In their place, you must program empowering beliefs, that are in line with your desires, aspirations and objectives. How can you do that? One simple method is  to jot down what your associations with making money from property are. For example, “its hard to make money from property”, “property investment is only for the rich”, and so on. Next write down the opposite of each of your limiting beliefs. E.g , ” it’s easy to make money from property”,” there are plenty of  opportunities for me to make money  in property”.  Then set these empowering beliefs in your mind by having them on your notice board, computer screen etc or any other place where you will see them frequently every day. Think about them as often as possible and in due course, you will have weeded out the limiting beliefs and will have instilled your empowering ones.

Be fully aware of what’s driving you and stay motivated

Obviously we need to be motivated to be successful.  In order to be a motivated Property Investor you will need to know exactly why you are investing in property. Motivation comes from knowing why you are doing something, and the clearer you are about why then the more motivated you will be.

We often don’t take the time we should to consider our actions.  We know that adding property to our portfolios is going to increase our net worth overall in the long term, and we aim for the type of property that brings in sufficient monthly income to cover mortgages and other expenses and still make a profit, but that doesn’t really answer the question of why we are investing.

What are your reasons for investing?

Make a list of your reasons and read them every day. Put the list somewhere prominent.  Reminding yourself constantly of the reasons behind your investments will help you to stay motivated and focused, especially during the tough times

Your Reasons can be anything that matters to you

 When considering their reasons many people often fall in to the trap of believing that only positive reasons are relevant. However, you can just as easily be motivated by something that you passionately do not want. For example, you may not want to have to continue working over the age of 60 like your parents are having to or you may not want to live in your current home for much longer.

Having said that, positive motivation works well for most of us. You may want to take  your family on an overseas  holiday every year, or buy the new car with the private number plate. 

Focus on the end results

Whatever you want to achieve in 5 or 10 years’ time, make yourself a list of the benefits you will get as a result of making these property investments. This will help you to build up a picture of what success means to you. List all the benefits you will be enjoying if your investments go to plan. One of my mentors asks his clients to write down 100 benefits they will get from making more money. Many of his clients will say that they cannot think of 100 benefits, but he tells me that it is almost always the people who are able to identify  100 benefits, able to visualize success,  that go on to be  achieve their goals.

You can also try making yourself a list of the consequences of not investing, to illustrate what life will be like in the future if you don’t take action.  Which list provides your greatest motivation?

There is no real point at all in accumulating property for the sake of it.  It’s not going to make you happier, unless you plan your investments to match your reasons for investing.  Without understanding your reasons, you may find that it becomes a burden or even a chore.  You won’t concentrate on the important tasks at hand such as collecting rents and finding the next bargain property to buy because you have lost the focus on why you are investing. If you know why you are investing then it is far, far easier to work out how you are going to invest and that will keep you motivated.

Need  Some Help to acheive and maintain the right mind set ?

Its one thing knowing that  you need to keep a positive mind set to ensure success,  but it can be very difficult to put this in to practice sometimes, when everything in the world seems to be going against you.  At times like these you might need a little help to stay on the right track.

I was lucky enough to discover a great program  called   Six Minutes Can To Success that has really helped me to maintain a positive outlook and greatly increase my success. You recieve a daily video message from Bob Proctor, one of the teachers in ‘The Secret’, in which he gives you a simple, 6 minute exercises, that will make sure you start each day on the right track and help you to quickly accelerate your progress towards your goals. Take a lokk at the program by clicking the link below.

Six Minutes Can Change Your Life! Find Out How.

Below I explain the procedures I undertake to ensure that I select the right tenant for my properties.

 Listen to your Gut Instinct

 For me, the most important  initial consideration is the gut feeling I get about the tenant when I meet them for their property viewing.  If I get a bad feeling about the tenant I will never let the property to them, even if there appears to be no logical reason for my concerns. As a landlord you quickly develop a sense of what makes a good or a bad tenant and usually you are right. In the past I have gone against my gut instinct and it proved  to be a long, difficult and expensive process to evict the tenant when they stopped paying the rent.

 Usually, if a tenant is late for their viewing and doesn’t offer an apology, is particularly scruffy or behaves suspiciously at the viewing, I will discount them straight away. The tenant’s appearance may seem irrelevant but I find it is a good indicator of how well they will treat the property whilst they are living in it. A tenant who pays the rent on time is only a desireable one if, when they vacate the property, they also return it to you in the same condition it was in before the tenancy began.

  Of course, if I like a tenant at the viewing it doesn’t mean I will offer them the property straight away. It just means that their application will move to the next stage of the checking process.

Collect the Tenant’s Details

 The first part of my formal checking process is to ask the tenant to fill in an application form in which  the data I collect includes their full name, date of birth, current address, previous addresses for the past 3 years, national insurance number and employment history. The information I collect here can tell me if they have moved around a lot and are unlikely to stay in the property long. It also provides me with details that would help me to trace them in the event that they vacated the property owing me money.

 The form is quite comprehensive and if a potential tenant shows any resistance to providing this information I take this as a sign that they probably have something to hide and are therefore not a suitable candidate for my property.

Charge an Application fee

 I believe it is wise to charge an application fee to a tenant who has expressed a desire to move in to the property and completed you tenant data form. Although this will offset the costs you incur in the tenant selection process, I do not view this as a money making venture. By paying a fee at this stage (I usually charge £79) the tenant is demonstrating their commitment to your property and is much less likely to go looking at alternative properties, whilst you carry out your checks.

 Collect References

 Assuming that the prospective tenant has completed the application form to your satisfaction and paid their application fee, you should then take up references. These should include an employer’s, bank, previous landlords’ and character reference. The employer’s reference (assuming they are in employment) is the most important as it gives some assurance that the tenant will be able to pay the rent.

 Alternatively, if the tenant is going to be claiming local housing allowance to pay the rent you should ask for written proof of the tenant’s entitlement. Also try to establish if the tenant fits in to one of the categories that allows their rent to be paid directly to the landlord.

 You should be aware that the applicant’s current landlord reference may not tell you the whole story as the landlord may be anxious to get rid of the tenant and thus provide a reference that is more positive than it really should be.

Do a Tenant Credit check

 Complete a credit check on the tenant. There are numerous online companies providing this service and most are fairly cheap and very useful. They will pick up if the tenant has  any County Court Judgments (CCJs) against them and will also verify that the employment and address information they have supplied on their application form is correct.

 Get a Guarantor if required

 The credit check will also provide an assessment of the tenant’s ability to afford the rental payments. If the check suggests they might have difficulty you would be wise to ask them to provide a guarantor who will commit to pay the rent in the event of the tenant defaulting. Of course, if your tenant does need a guarantor you must also credit check them to be sure they have the means to pay the rent, on top of their own commitments, if necessary.

  If a tenant passes all of the above checks to your satisfaction it is very likely that they prove to be a good tenant for your property.

For a few years I shied away from using Gumtree because it was really a London focused website and, with the majority of my portfolio being located in North West England, I felt it wouldn’t be particularly useful for me. However in recent years, Gumtree’s use has expanded well beyond the capital and it is a great resource for most urban areas of the UK.

 I’m not suggesting that Gumtree should be the only method you use to market your property but it should definitely be one of your primary resources, assuming that you are happy to find tenants yourself, because it is free, quick and easy to use and generates a lot of enquiries

As with any marketing strategy, there are certain principles that should be applied  in order to achieve the best possible results. Here are my  tips for getting the most out of  Gumtree.

1. Before posting an advert, check out competitor advertisements

You’ll find it useful to see how other landlords are marketing their property. Before creating an advert, search the website for similar properties in the same area to your own.  For a start you will quickly discover if your planned rental price is competitive with the price offered by other advertisers. Consider marketing your property slightly below the ‘going rate’  for the area to generate more enquiries.

You should also  try to put yourself in the shoes of a potential tenant when looking at competitor advertisements. Observe which adverts intrigue you and make you want to find out more details, and consider using some of the wording of these adverts in your own  copy.  Its equally important to observe the unattractive adverts to ensure that you don’t make the same mistakes.

2. Market your property in the correct city/region

This is very important to ensure you get the best response rates. The Gumtree website organizes its listing by location (major cities and counties). Make sure you create your advert in the correct location. For example if your property is in Leeds, make sure your ad is created on the Leeds page of the website. It is very easy to get this wrong because the website sets the default location tp London if you fail to specify a different city or county. I’ve created adverts in London before instead of Lancashire. You can navigate to the correct location by clicking “change city” in the top left corner of the page.

For some properties your choice of Gumtree page will not be so simple. For example, I own a number of properties in Warrington which does not have its own dedicated page on Gumtree and lies approximately half way between Manchester and Liverpool, without  being considered to be a part of, or attached to, either city. In this case your approach should be to test your advert in all appropriate locations to see which  gets you the best response. In my case, I posted adverts in all the ‘North West’ locations – Liverpool, Manchester and Lancashire. I found that Liverpool and Manchester adverts both delivered a decent level of response but my Lancashire listing delivered very little. I therefore now routinely post ads for my Warrington properties in both the Manchester and Liverpool pages.

3. Regularly renew your adverts

Gumtree search results are displayed in order of age with the newest advertisements, i.e. the freshest content, appearing at the top of the listings.. Obviously, it goes without saying that adverts closer to the top get more exposure.

It used to be possible to resubmit your ad without changing it and this would result in your ad being returned to the top of the listings. However this feature has been abused by many advertisers, resubmitting their adverts on an extremely regular basis and gumtree now charges £2.00 for your advert to be bumped to the top of the listings.

The way to get around this is to create a new advert by cutting and pasting the details from your original advert. It only takes a couple of minutes to do this and get yourself back to the top listing position. How often you will need to do this really depends on your location. In an area such as  London, where gumtree is very popular,  there are hundreds of properties being added to the system daily, so your property will slip down the list rapidly and you may wish to renew your ad daily. However in other regions of the UK it may only be necessary to renew the ad every couple of weeks – hopefully  you’ll have let the property by then !.

4. Use an attention grabbing headline for your advertisement

Tenants will be scanning several adverts so you want to make sure that your advert stands out from the crowd. If you look at most adverts on gumtree, the headlines nearly all follow a similar format, along the lines of “Beautiful 2 bed apartment available in great location”. Try to think of a headline that will make people click on your advert before the others. For example a headline that I use when advertising properties that are well suited to housing benefit claimants is “House available, free to DSS”. The word ‘free’ grabs the attention of the reader and encourages them to look at the advert. In reality I am merely pointing out that a tenant who qualifies for housing benefit will have the rent paid by the government – which would most likely be the case with any property they were to rent.

5. Upload good quality pictures

Gumtree  have stated that adverts that include photographs get, on average, double the number of responses compared to adverts that do not contain photos, so it really makes no sense to post an ad without photos. In this digital age, when technology makes it so simple to upload photos to a website, potential tenants are naturally suspicious of adverts that don’t include photos, often thinking that the landlord has something to hide and that the property is probably in a bad state of repair.

Make sure you use good quality pictures, and show the most attractive features of the property. Always try to include a picture of the front of the house, and  two other photos of the property’s best features. Currently gumtree allows a maximum of 3 photos to be displayed.

6. Create a full and accurate description of the property

Try to provide as much detail as possible and draw attention to the properties best features  in your description. This will weed out the people who require something that your property can’t give them and the potential for wasting time conducting unnecessary viewings. If you don’t mention the fact that your property has no parking facilities you really don’t want a two car family coming to view it as it just won’t suit them.

Try to include the following features in your descriptions:

• Number of bedrooms
• All other rooms
• Parking  spaces/garage/off road parking
• Bathroom facilites – bath/shower etc
• What bills/charges are included in the rent
• property condition
•  gardens
• central heating/double glazing
• proximity to shops and other local amenities

7. Provide email and telephone contact details

Gumtree allows you to be contacted via email and/or telephone. I used to provide only email contact details but found that I received a lot more enquiries when I started to provide my telephone number. Some people, especially the older generation, are not comfortable with email and find it difficult and time consuming. These people will often only contact you by email if they have been unsuccessful in securing a property after calling other landlords who did provide a contact number. It pays to make it as easy as possible for someone to contact you.

8. Don’t use the paid options unless you really have to

Gumtree provides a great free service  but also offer various paid options such as the ‘Bump your ad up the list’ service discussed earlier and the ability to feature your ad at the top of the listings for up to 14 days. I’m sure the people at Gumtree won’t thank me for saying this but their free service is so good that you shouldn’t need to pay for these services. I’ve always been able to let my properties using the free service and if you follow the guidelines above you should too.

If you’re exceptionally busy and can’t spare a few minutes to manage your ads to ensure you always have a presence high up in the listings then it may make senses to you to pay for the services to keep your adverts high in the listings.

The equipment and materials required for growing cannabis can be acquired quickly, cheaply and legally by almost anyone. This combined with the attraction of being able to carry out the activity in someone else’s property and at someone else’s expense has made it a relatively simple task for the criminally minded tenant to set up a cannabis factory. Cases are on the increase and this problem has become a major talking point in the world of uk property investment in recent months. However you can mitigate your risk of falling foul of this type of activity by looking out for a few simple clues.

Your vigilance should start at the tenant’s initial viewing of the property. Tenants intending to grow cannabis may show little regard for the practical considerations that would normally concern prospective tenants when viewing a house. Considerations such as identifying a space to accommodate their washing machine and fridge freezer in the kitchen or checking that there are enough sockets in the corner of the lounge where they would want to position their television may seem of no interest to someone viewing the property for the purposes of turning it in to a cannabis factory. Often this type of person will not not even bother to look in all of the bedrooms when viewing a property. This is because they do not intend to use the property to live in, in a normal fashion so such things are of no concern to them.

You should also be wary of tenants who show an unusual interest in the electricity supply at the viewing. If a tenant asks repeated questions about the location of the rcd board, the location at which the supply enters the house, and other aspects of the electrical infrastructure this could be another indicator that they intend to grow cannabis at the property. The reason for this is that cannabis needs a lot of heat and light to grow, meaning that the electricity consumption in the property will increase massively. Invariably the grower will try to tamper with the wiring, by bypassing the electricity meter, as a way to avoid detection. He or she will need to ensure this will be possible before taking the tenancy on.

You should be suspicious of any tenant offering to pay the rent for the entire tenancy upfront and in cash at the start of the tenancy. Cannabis growers will often make such an offer to try to ensure that you do not visit them and disturb their activity, during the course of the tenancy. Also, doing this will mean that you do not have their bank account details, making them more difficult to trace if their activity is discovered.

When a tenancy has started there are other signs to look out for. Cannabis cultivators will obviously try to hide their activity from view and therefore will ensure that curtains remain closed and windows blacked out at all times. If you notice this to be the case during the day time it should arouse your suspicions. Similarly if a light constantly appears to be on behind the curtains at all times of day and night, this could also be a sign that cannabis is being cultivated.

If you spot either of these signs whilst passing the property you should then attempt to contact the tenant to arrange a property inspection. You only need give 24 hours notice of your desire to inspect the property. If the tenant ignores your attempts to make contact or tries to avoid an inspection taking place, this indicates that they do not want you to see the inside of the property and should arouse you suspicions further.

In such cases you may wish to examine the rubbish being thrown out of the property for further evidence. Large quantities of plant waste and an unusual odour provide more reason to be suspicious.

Following these tips should ensure that your UK property investment is not an easy target for cannabis growers. However, if you have reason to suspect that cannabis is being grown in one of you investment properties, you should contact the police immediately and ask them to investigate.

Mark Bottomley is an experienced investor and landlord in the UK property market.

For more information on issues related to investing in property in the UK go to:
http://www.thepropertyinvestor.info

Almost every individual has already experienced buying a home or a land property, or perhaps rented an apartment. As long as you know how it feels to be a homeowner or renter, you can already think about becoming a property investor. Typically, the property investor will purchase several houses and become a landlord. Within 30 years, all the mortgage loans can be repaid and the value of the properties has already doubled. The rental prices at this point have also increased and so you see how much money you can make.

The situation seems so easy and inspiring but once you’re already there, it becomes daunting. For instance, if one property cost you $80,000, you can pay off the mortgage within thirty years. During that point in time, the property will amount to around $350,000 and you can get gross rents of $12,000! So you see, you can definitely generate wealth through property investments.

You need to be aware that many investors fail because they lack cash flow. While you are busy as a landlord, you can also purchase houses or properties and flip them to other investors. For every property, you can get $5,000 to $20,000 that can help in providing for your cash flow.

The property investor should know how to manage properties especially if he plans to hold it for the long term. As a landlord, you will need to manage your properties that you have rented out. This can be a smelly and dirty business but as long as you’re equipped with the right knowledge, you can earn profits from it. Learn the basics of land-lording and with the right strategies, you can pull it off.

If you decide to become a landlord, you should be free from other major debts. With a significant amount of starting capital, you can succeed in this kind of business. If you think that this kind of set up will work for you, go ahead and become a landlord but if you’re having second thoughts, you might as well stick with flipping properties.