Wealthy Wednesdays: Buy to Let Week 1 of 3
But first, we need to talk about Kobe...
There was no escaping the news on Monday morning. Kobe Bryant was dead, killed in a tragic helicopter accident. Now don’t roll your eyes in disbelief, but I didn’t recognise the name. I don’t follow basketball nor do I follow American sports stars (clearly!) I only clicked on the news link at the time to see what was so tragic about this particular death. I was sucked into the vortex in split seconds – his 13-year-old daughter had died with him. Gasp! Unthinkable! Then the news broke that more families were together on the helicopter, more families torn apart by this crash. Heartbreaking. As a wife and a mother, I couldn’t quite figure out how to process it. I watched videos and interviews to understand why this man had caused a global outpouring of grief. Quotes like these gave me an insight into the kind of champion he was:
Everything negative - pressure, challenges - is all an opportunity for me to rise.
I'll do whatever it takes to win games, whether it's sitting on a bench waving a towel, handing a cup of water to a teammate, or hitting the game-winning shot.
I don't want to be the next Michael Jordan, I only want to be Kobe Bryant.
The most important thing it to try and inspire people so that they can be great in whatever they do
Coming from nothing and yet being so determined to win, so determined to succeed, so determined to be himself. He gave us a glimpse into the world of magic, the world where everything is possible regardless of your current reality and a world where bold audacious dreams really do come true. He inspired everyone around him to think bigger, reach further, try harder. And he REALLY loved his beautiful daughter Gigi so much. His family was everything to him, such a devoted father. Yip, now I understand why the world is in mourning. Extraordinary people like Kobe don’t come around often, and when they do, we should stand close to them and soak up their sparkle. And when they leave, we should remember what they tried to teach us. That ordinary is a choice, that chases after your dreams requires hard consistent effort. That life is short and if you are not spending your time chasing what you love, you are wasting your time. RIP Kobe. RIP to everyone who lost their precious lives along with him.
The Pitfalls of Buy To Let: Week 1 of 3
Over the next few weeks, we will discuss the pitfalls of Buy To Let. Today, let's talk about two of the stumbling blocks investors have to navigate when using this strategy:
Buying the wrong property
Running out of available capital
1. Buying the wrong property: You have to buy something that you can be confident will let well, both now and in the future. It’s also important that the property will increase in capital value over time at or above the average for the area. If you don’t do enough research, the danger is that you could end up with something that is hard to let, doesn’t achieve the rent you want or need, and becomes a drain on you, emotionally and financially. The best place to start looking for a buy-to-let property is with a good local letting agent. Talk to them and find out what always lets well in the area and what kind of rental property is most likely to achieve the returns you want. Carry out some research online on websites like Private Property and Property24, checking supply, demand and rents in your local area. And don’t be taken in by investment companies and property ‘gurus’ who try to convince you that the best place to pick up an investment is from their catalogue! Simply buy now and we will take care of all the rest! No one cares as much about your money as you do (or should!) so take the time to learn the skills you need to have to manage your money and your portfolio. 2. Running out of available capital:
It’s vital that you budget properly for your buy-to-let investment to make sure you know when bills will need paying and when money will need spending on the property. If you don’t make sure your cash flow is enough to cover all the needed outgoings for the property, you will run into problems. That could mean having to use savings or borrow money to cover bills, or even having to sell the property because you simply can’t afford to keep it.
It’s key to make sure you plan properly before you invest. Plus, assuming you’re intending to hold on to the property for a number of years, only buy a property that generates sufficient rental income to cover its own costs, with enough left over on top to put into a ‘slush fund’ to cover bigger maintenance jobs. Proper prior preparation will prevent a financial nightmare down the line! Tune in next week when we discuss how to manage: 1. Falling foul of legal requirements 2. Bad tenants - everyone's nightmare!