Your Property Network: Book Review June 2013
This book is a delightful introduction for anyone who is new to investing in property. The target readership is clear from the outset: people with a good income but little in the way of investment planning, or who do not know where to start when it comes to the ins and outs of property investment.
Why delightful? Well, it takes a rather different approach from any property book that I have yet read. Reminiscent in style of Brad Sugars’ “The Business Coach” and (in my view anyway) the modern business classic, Michael Gerber’s “The E-Myth”, the information is woven around fictional characters – Coach, the property specialist whose name we never know, and Steve and Carol, husband and wife business owners who want to start investing in order to secure their financial future. The beauty of this style is that it presents the nuts-and-bolts information that new investors need to know in an informal and very readable way. In fact, I would rather like to know how Steve and Carol fared after a couple of years …!
A Sensible Approach to Investing
At its heart, this is a book full of good, sensible advice. No fuss, investing bells and whistles, complicated structures, get rich quick ideas or jargon. Concepts such as gearing are gently introduced – as a mere possibility depending on one’s outlook and strategy further down the line – without mention of the term. Particularly helpful are Coach’s ‘handouts’, checklists and tables covering amongst others topics such as The Rules, Motivated Sellers, Refurbishment and Maintenance, Standards for Landlords and Referencing. One of my very few criticisms would be that there is no index or appendix of these useful ‘handouts’, necessitating thumbing through the whole book again when looking for the one you want.
The book addresses the reasons for choosing property as an investment vehicle in Chapter 2 “Why property?”, providing some charts and statistics as evidence that property still forms a sound asset.
Aran continues, in Chapter 4 “The mind-set of an investor”, to explain that what goes on in your head is as important as your actions, perhaps even more so. The section on “What’s holding you back?”, where he discusses the internal and external influences that result in lack of action, would have made me squirm in my seat a few years ago. In fact, I still squirmed just a little bit when I read one of the paragraphs.
Particularly useful though, was clearly establishing the difference in mindset between homeowner versus investor when it comes to buying property. Many are guilty of the former when starting, looking for properties that are attractive and appeal as a place they would like to live in relation to location, style and interior design. Someone I spoke to recently had crossed the investor/homeowner border in the choice of interior finishes for a single-unit rental house; it has an impact on the overall profitability when you look at the property as a venture in its own right. All very well if you are developing or refurbishing to sell, but a different story if you are letting it out. Of course, it will depend on your rental target market, but that in itself is all part of the investor mindset: keep your customer/tenant in mind the whole time. The investor is focussed on figures and performance – ignore this at your peril.
There is practical advice here, too, certainly enough to get people researching suitable properties. Chapter 6 “Investing in the right property” goes into some detail on how to do the desktop homework on arriving at a valuation figure. I picked up a couple of useful tips and have added them to my own valuation process.
The book also stresses the importance of working with the right people – the professional teams for purchasing, valuation, finance and accounting; also trade teams for refurbishing and maintenance.
Who Is It For?
The main focus is on how to build a portfolio for the future rather than investing for cash flow in the short term so this, I would say, is a book for people who want to invest in property alongside their day job or existing business. The chapter on “Other types of property investment” near the end does briefly discuss strategies such as flipping, Houses in Multiple Occupation (HMOs), letting to students and developing, but Aran makes no bones about the fact that these are entirely different strategies to that laid out and forming the core of this book.
It is definitely one for the prospective or new investor/landlord, though might also be helpful if you have made a start with one or two properties and are feeling overwhelmed. If you already have a few properties, you probably will not gain much more than a few helpful tips or a consolidation of the basics.
One thing is for sure – because of the way that the information is presented, you won’t feel overwhelmed about the subject after reading it.
Buy from Amazon …
Aran’s business Property Insight is offering YPN readers a special deal of JUST £3.00!