The Property Podcast

This week on Ask Rob & Rob, Mike...

Asks Rob & Rob –  Should I never sell a property? 

Rob D admits this is something you hear a LOT from everyone, including from The Robs. However he also says that his thinking has changed a little in recent year. If your property price is increasing a lot faster than the rent and your yield has fallen, you could take the view that you have had the majority of your gains and you could sell now and buy a property elsewhere where there's more growth in it. There's no right answer, and there is a logic in both approaches.    Rob B says his attitude has changed too but only slightly - and that still feels that never selling is a decent principle. There's a time and place to take stock and maybe move some units on though - for example if you have a dud property that just hasn't performed as you expected, or was one of your earlier purchases and you made some mistakes on it, or you have had a constant string of bad tenants that have cost you a lot of time and money; then you should be prepared to walk away and move on to something else.    Rob B continues by saying that as he believes in the 18 year property cycle, he will be inclined to move properties on when we're at the top of that cycle (which we are a fair way away from just now).    So it's not quite a 'never sell a property' answer, and there is definitely a bit more to it than this, depending on your situation, your longterm plan, and where we are in the cycle.

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This week we're lucky enough to be joined by Pete Matthew from the Meaningful Money podcast, who talks us through how to set up your personal finances for property investment.

Having Pete on the show allowed us to cover some topics that we've not devoted enough attention to in the past, including:

• The importance of life insurance if you have mortgages
• Where to keep your money while you wait to invest
• What kind of emergency buffer you should have on hand
• How to view property as part of a wider investment portfolio
• ...and Pete shares the biggest personal finance mistake he sees people making

If you need more Pete in your life – and frankly, who doesn't – make sure you're subscribed to Meaningful Money

Resource of the week

Thank you to Matt Chan for pointing us towards Mubert – a site that generates sounds designed to help you concentrate.

We've covered similar in the past, but it's always worth checking out another – and if you're going to be looking into insurance policies and bank account comparison tables, you'll need all the help you can get...

News this week

The northern powerhouse powers on – as Theresa May confirms that it's not going to be scrapped along with the chancellor who coined it!

Buzzword or not, investing and looking at policy to rebalance the economy geographically makes nothing but sense – and is good news for anyone with investments anywhere near the areas that are set to benefit.

It's meetup time again!

The first Thursday of the month is almost upon us, which can only mean one thing: MEETUPS!

Again there are more than 30 across the country – and if you're in London, you can attend the launch of our brand new Waterloo meetup.

View the full list and book your place here

Join the conversation

What other steps have you taken to secure your personal finances?

Any other questions you'd like Pete to answer for us?

We’d love to know, so join the discussion in The Property Hub!

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This week on Ask Rob & Rob, Mike...

Asks Rob & Rob –  When it comes to refinancing, should I consider a longer term deal to avoid fees?

Rob D & B agree that this is all about the numbers, but it can be tricky to work out. Get your mortgage advisor to do the calculations and work out what is best for you. Remortgaging can be an expensive business and even if the costs are not being paid out immediately, they are definitely still very real costs. 

Rob D asks his broker to give him all the figures including any associated fees, just to be 100% sure that he chooses the best deal when re-financing. 

See omnystudio.com/listener for privacy information.

Last week we talked about the whole property buying process, all the way up to completion. This week, we're looking at the easy-to-overlook steps you need to take in order to prepare your property to let.

They include:

• Deciding whether to self-manage or use an agent
• Checking out the competition
• Informing the authorities and utilities about your ownership
• Obtaining any licenses that are needed
• Getting safety certificates in place
• Checking for any post-refurb minor maintenance issues

Then it's time to either start marketing yourself, or hand it over to an agent. We've got you covered there too...

See omnystudio.com/listener for privacy information.

This week on Ask Rob & Rob, Andy...

Asks Rob & Rob – What checks should you make when buying remotely?

This is somewhat of a specialist subject for The Robs, as they both invest this way, and run companies which help people to invest with a completely hands-off method. 

This is an important question and Rob B starts by saying you need to be very clear in what you want from the people you work with. Give them really clear guidelines so people know exactly what is an investment you would consider, and what you wouldn't touch in a million years. This will help preserve your working relationships and save you all a lot of time and avoid frustration. Give as much detail as possible. 

Rob D agrees with the advice given but also says to clarify all information given - even if it's coming from a trusted partner. Get images, check market information, and do your research. This will give you complete clarity on your investment, and you wont feel like you really need to be there on the ground. This method is not for everyone, but for us it works really well. 

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Getting an offer accepted on a property is always a great moment – but this week we see that rather than being the finish line, it's actually just the firing of the starter's pistol.

The process of doing the legals and getting your mortgage arranged can be a lengthy and arduous one, and it's your job to take control of all the people involved and keep things ticking along. In this episode we go step-by-step through everything you'll encounter, and provide tips for how to boost your chances of coming through unscathed.

We discuss:

• The preparation you can do with your broker and solicitor in advance
• At what point you'll have to fork over money
• What your solicitor should be doing behind the scenes (and why you need to check that they are!)
• How to balance patience with keeping things moving
• The critical milestones in the process of getting your mortgage agreed
• What will happen in preparation for exchange

And in case it's all a bit much to take in, we've got a resource of the week to help...

See omnystudio.com/listener for privacy information.

Rob B issues a note of caution - beware those who tell you there is a way to do this that means you pay a little more now to get started as an investor. The truth is there is no real shortcut, and you probably should pay your debts off first. It's frustrating, and tempting to want to find a quicker alternative, but not the best move. Avoid the people making the big claims and the courses that say otherwise are a waste of money. 

If it's a choice of paying off your debts or investing, you need to make a decision based entirely around return. So if your debt costs you 9% a month and you can comfortably pay this, but you can get a property that gives you an 8% return, then it's a no-brainer - pay off your debt. But start by paying down your most expensive debt first, get that paid off as soon as you can, and then maybe you will reach a point where you have some cheaper debt which you can accept whilst investing. 

Rob D admits yes, it's not the fun approach but waiting is the right thing to do, but suggests you make a plan now. Work out when you are going to be ready to invest and use that time to get experience and learn, so that when you're financially ready, you are as educated as possible. 

So don't feel disappointed that you can't start now, get a plan together and get excited about what you will be able to do in the future. 

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It's no surprise that we're big believers in the long-term power of property...but we were surprised when the Bank of England's Chief Economist said he'd back property over a pension too.

So in this week's episode we ask if property is really better than a pension. We cover:

• What the BoE's Andy Haldane said
• Whether property really has outperformed equities over the last 30 years
• The advantages of property as a long-term asset
• The advantages of pensions over property
• Why property isn't the right retirement choice for everyone
• Why you definitely shouldn't be relying on your main residence to fund your retirement
• ...and a bit of a rant about the disaster of pension provision (also listen to our pension crisis episode)

It's far from being a whitewash – so take a listen, and see what you think.

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This is a commonly asked question - basically 'how good is good enough'. The answer is different for everyone as Rob D points out, as everyone has a different approach and attitude to risk. Rob D does say that neither himself nor Rob B uses net yield as a measure, preferring to favour looking at ROI, this takes into account using a mortgage and tells us after factoring in that mortgage, how hard an investment is working. Rob D bases everything on ROI, occasionally looking at gross yield to compare different properties that have similar costs. Rob D (greedily) aims to get an ROI of 10% and in typical Rob D fashion, hasn't invested in a property that doesn't hit this measure, though definitely doesn't rule this out if the deal had the potential to make great capital growth or add value.

Rob B has relaxed his approach slightly in recent time, having formally worked with a target of 10% as well. He will now accept 8% BUT only if this property needs zero work and is being handed over to Yellow Lettings to get let. That said,  he has done deals in excess of 14%, and deals at less than 6% because whilst he does check out this measure, he wont necessarily be put off entirely if the ROI isn't so high IF the deal is right in terms of capital growth. 

Rob B adds a note of caution to remind us that ROI isn't all it's sometimes cracked up to be! If it is based on letting at the maximum market value, getting a great deal from your solicitor and the very best mortgage rate in the market then these things may well not happen! 

Finally, Rob D suggests you don't compare ROI with other investors too frequently as you don't know what another person has allowed in the way of rent void periods, maintenance costs etc. So don't get too hung up comparing your figures against someone else's, just know that you are happy with them personally. 

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Depending on who you listen to, it's either the perfect time to invest in property or it's horrendously overvalued and ripe for a crash.

This week, we look at the data behind the claims that UK property is unaffordable – and show how easy it is to cherry-pick one measure to support an agenda. We look at affordability through the lens of:

• Actual house prices (and see the shocking impact of inflation over the long-term)
• Prices after adjusting for inflation, to identify the specific extent of house price inflation
• The price of houses as a multiple of earnings, and whether this is historically high
• The ongoing affordability of housing, looking at the monthly cost of a mortgage as a percentage of income

There are some fascinating stats – as well as some really important insights into how affordability varies across regions, and where value might be found.

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