The Property Podcast

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

Asks Rob & Rob – What is the snowball effect?

Rob B says that from a capital growth point of view, if you see your portfolio at the top of the hill, as the hill drops down that represents time, by the time your snowball has been pushed down the hill - it is bigger. The point being, if you do more work in the early stages (buying BMV), your 'snowball' will be bigger at the end. The first few properties are incredibly important and you need to make wise decisions. 

Rob D adds that when he thinks about the snowball effect, he thinks of compounding rent. For example, if you want to buy a property every year worth around 80K, with a 75% mortgage and cash for the rest, you would need to save 20k+ (with fees) to buy that property which for most people is a very big ask. But once you have your first property and it's making you money, if you don't touch that rent, you need to save less to put the deposit down on your next property - and if you keep doing that, you reach a stage where you can keep buying through rental income alone. Saving for the first two or three properties is sometimes a slog, but it doesn't take too long for your 'snowball' to take effect and make life a lot easier. 

ASK YOUR OWN QUESTION TO ROB & ROB!

Don't be shy! All you need to do is leave a message with your name and whatever's on your mind.

Just pick up the phone and call 013 808 00035 (normal UK call rates apply).

Or if you prefer, click here to leave a recording via your computer instead.

NEED MORE ANSWERS?

The Property Hub Summit is the place to get all your questions personally answered by Rob & Rob, and build a network of other smart, motivated investors.

Over the course of a full day at a swanky hotel we'll help you set your goals, form a plan to get you there, overcome your obstacles, and give you the support system you need to make sure nothing gets in your way.

Just don't hang around - there are only four Summits each year, and just 16 places available at each!

Interested? Click here to find out more.

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More than any other type of property investment, the success of an HMO hinges on buying and setting it up right in the first place. We've talked recently about managing an HMO once it's up and running, but this week it's all about acquisition. We discuss:

• Where to buy, depending on your target market
• Two ways to find out where the "HMO areas" are
• Why you absolutely don't want to compromise on location
• The importance of understanding Article 4
• The challenges involved in financing an HMO
• How lenders value HMOs (check out this episode of the Property Geek podcast for more on this)
• What you need to know about licensing
• The returns you can expect to earn
• The key components to setting yourself up for a high ROI

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Rob B starts by reminding you that what may be right for one person, won't necessarily be right for another. There will be pros and cons to each approach and there's no absolutely 'right' answer for everyone. However, whilst there is definitely an advantage in being a 'local expert' it is unlikely that your local area will consistently be a smart place to invest, which is why Rob & Rob invest all over the UK in places they consider to have good fundamentals. Rob allocates a lot of his time to research, and considers it to be lower risk to invest in different locations. 

Rob D agrees, it's definitely lower risk to invest in different areas IF you do good research to avoid making any mistakes. Rob D also adds a note of caution for this weeks caller, who had stated she had received lots of BMV deals and reminds everyone to check out these deals really thoroughly before going ahead, and be super diligent with your fact-checking. 

ASK YOUR OWN QUESTION TO ROB & ROB!

Don't be shy! All you need to do is leave a message with your name and whatever's on your mind.

Just pick up the phone and call 013 808 00035 (normal UK call rates apply).

Or if you prefer, click here to leave a recording via your computer instead.

See omnystudio.com/listener for privacy information.

Quantitative Easing: hard to understand, even harder to say...and about to have a serious impact on your property investing plans. In this week's episode we explain what QE is, what effects it has, and how you can position yourself to take advantage of it.

Useful links:

• A video from the Bank of England explaining the mechanism by which QE works
• A letter to the Chancellor warning of the risks
• A report from the New Economics Foundation assessing QE and proposing an alternative
• TPP024: Inflation – your worst enemy or your best friend?
• TPP168: The disappearing middle class (and what you can do about it)

We also said we'd reproduce a table with some of the figures we discussed in the episode:

Percentage changes in asset prices since 5 March 2009:

• Average mortgage rate: -31%
• UK house prices: 32%
• UK stock market: 87%
• UK stock market with divs reinvested: 138%
• Total return from average deposit account: 5%
• Total return from UK gilts: 47%
• UK inflation: 16%
• Pension annuity rates: -27%
• Gold (in dollar terms): 38%

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

Asks Rob & Rob – What's the catch with student pods?

Rob D starts by agreeing that the propositions offered can look attractive and if all pans out as promised then they do indeed sound great. The key, however, is trying to figure out if things will work out as promised by the developer! So for this reason it's absolutely key to look at the previous projects of the developer and see if their history backs up their claims.

Rob B is against student pods as he feels they're weighted heavily in favour of the people selling the product as opposed to those owning the product. He suggests that many of the claims made by the developers are greatly exaggerated at best. He also makes a very good point in saying that the mortgageability on student pods is pretty much non-existent, and the market if you want to sell is extremely limited. 

Rob B finalises by saying he'd never buy one and he would never offer them to RMP customers - so no sitting on the fence here! 

ASK YOUR OWN QUESTION TO ROB & ROB!

Don't be shy! All you need to do is leave a message with your name and whatever's on your mind.

Just pick up the phone and call 013 808 00035 (normal UK call rates apply).

Or if you prefer, click here to leave a recording via your computer instead.

See omnystudio.com/listener for privacy information.

Buying property within a limited company is becoming increasingly popular – but when it comes to obtaining mortgages for companies, there are some extra considerations you need to know about.

This week, with the help of our friend Dave Cookson from TC Financial Services, we're running through the important details you need to be aware of. Including:

• The kind of range and selection you can expect to choose from
• How to set your company up correctly
• The documents you should have to hand before you start
• The personal requirements for company directors that lenders will want to see
• How to handle the tricky issue of multiple lenders against the same company
• Why this type of lending is particularly attractive for contractors and business owners
• What Dave thinks lies ahead for the sector

Related listening:

• TPP125: Should you create a limited company for your property portfolio?
• TPP124: Post-budget survival tactics for property investors
• Free video course: Should you use a limited company to invest in property?

Resource of the week

If you ever need to visualise a process, a flowchart or a mindmap, draw.io is a great free tool to use. Rob B recommends it for fans of Lucidchart, who are now seriously restricting their free plan (the cheek!)

News this week

It won't have escaped your attention that the Bank of England have cut the base rate to 0.25%, as reported by the Economist – as well as announcing a new round of quantitative easing.

If you've got tracker mortgages, enjoy the lower payments! As for the longer-term consequences...we'll be getting into that next week.

Join the conversation

Have you learnt anything from a company mortgage application that other listeners might find useful?

Was it easier or more difficult than you expected?

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

If you enjoyed The Property Podcast, please leave a review on iTunes

Reviews are really important in helping other people to find the show, so by way of thanks we read out every single review we receive on air.

If you’d like to hear your name on the show, leave us a review on iTunes here.

Not sure how to leave a review? This video shows you how to review and subscribe on iTunes.

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On this weeks podcast, Jack asks a cracker of a question - where are we in the 18 year property cycle. 

Given that this is one of Rob & Rob's favourite topics to talk about, they didn't need a lot of convincing to answer this one! Rob B starts off by stating that he thinks we're just heading into the mid-term wobble - where London and the South East prices should soften a little, and the North should grow a little less slowly. Of course the media will term this as a 'crash' but it's likely that the results will show it to be far less dramatic. 

Rob D agrees the UK as a whole is heading into the mid-term wobble, and reminds us that the growth has been amazing in the past few years in London and the South East, so the 'wobble' is likely to be felt the most in these areas. 

Both Rob B and Rob D agree the aggressive growth is to come in the second half of the cycle, though London and the South East may grow slightly less aggressively due to their growth beforehand. 

Rob B reminds us that as most of our podcast listeners have predicted this is coming, it leaves us in a position to be a lot more relaxed about the situation, and make the most of it. 

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In the course of getting to know hundreds of investors, we've come across a whole cast of characters who probably shouldn't be investing in property at all – including Stressful Susan, Dithering Derek and Gung-Ho Grace.

Will you recognise yourself in any of them? Do you have the right temperament to be a successful investor, or are there traits you need to get under control? Listen to this week's episode and find out!

Related episodes we mention: - When Property Goes Wrong - How Rob B lost £40,000 on one deal

Resource of the week

If you ever need to put together a flyer for a property, or just brighten or resize some photos, you might want to try Picmonkey or Canva.

Both are free and extremely easy online image editing tools – perfect for quick, everyday tweaks that don't require anything as powerful as Photoshop.

News this week

Chinese buyers' interest in the UK has spiked by 40% post-Brexit, as reported in The Telegraph.

In a way not surprising as the pound is on sale for the rest of the world, but still a remarkable indicator when there's still so much uncertainty about how things will pan out.

Join the conversation

What other "characters" would you add to our collection?

Do you have any traits that you need to work on to make yourself a better investor?

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

If you enjoyed The Property Podcast, please leave a review on iTunes

Reviews are really important in helping other people to find the show, so by way of thanks we read out every single review we receive on air.

If you’d like to hear your name on the show, leave us a review on iTunes here.

Not sure how to leave a review? This video shows you how to review and subscribe on iTunes.

See omnystudio.com/listener for privacy information.

This week, the brilliantly named Rob, asks a question regarding the build to rent scheme, and how this may impact upon the existing PRS. Asking is this a ploy by The Government to eradicate small time BTL Landlords. 

Rob D begins by acknowledging that there will definitely be more institutional investment in BTL, and that it is probably healthy for the sector not to be controlled entirely by private BTL Landlords. But thinks there is room for both in the marketplace, due to the demand for different types of products. 

Rob B agrees that whilst the balance my shift, it shouldn't do so radically. Rob B goes on to discuss how quality has improved for student accommodation, and how in the long term this could give us a glimpse into the future of the BTL market, and that it could be a good thing if this competition increases the quality of stock available to tenants. 

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This week we're talking about how to hire for your property team – whether it's a property manager, an assistant, a bookkeeper, or just about any other role you can think of.

We've talked about the benefits of hiring many times, so this week we talk through the exact process we use to maximise our chances of finding the perfect candidate.

We cover:

• How to set yourself up for success before hiring begins
• The different hoops we make applicants jump through (and why)
• How we organise the process to keep track and minimise our time input
• The questions to ask in an interview
• One critical step you mustn't miss out
• The killer question to ask when taking up references

Resources we mention are:

• Topgrading

Resource of the week

This week's resource is a Trello board, which is the template we use when we're executing the hiring process we talk about in this episode. Take it, make whatever modifications you want, and you'll find that it makes it way easier to keep track of where you're up to with all your applications.

Get the Trello board here

And as an extra bonus resource, Rob B was on the Graduate Jobs podcast talking about how to land a job in property – so if you're seeking a role rather than hiring for one, make sure you check out his words of wisdom.

News this week

House price growth is hotting up in the north and cooling down in the south, according to The Telegraph.

Wow, does that mean we've actually got a prediction right for once?

Don't forget to register for a meetup!

Next week will be the first Thursday of the month, which means...it's meetup time again!

There are over 30 meetups taking place, and they're totally free. All you need to do is find one near you, put your name down, and turn up for an evening of friendly and informative chat with other property obsessives.

See the full list and sign up here

Join the conversation

Do you have any tips from when you've hired for your property team?

Which tasks do you wish you could hire someone to take off your hands?

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

If you enjoyed The Property Podcast, please leave a review on iTunes

Reviews are really important in helping other people to find the show, so by way of thanks we read out every single review we receive on air.

If you’d like to hear your name on the show, leave us a review on iTunes here.

Not sure how to leave a review? This video shows you how to review and subscribe on iTunes.

See omnystudio.com/listener for privacy information.