Local Housing Authority (LHA) tenants are a great way to mazimise the cashflow of a rental property. However if you dont get your investment right in the first place even this may not be the saviour some people imagine.
In reading the IPD (Investment Property Databank) Report Julie noted that “Residential Property has represented the best real return to a December 2000 investment [against equities, bonds and commercial property] at every stage throughout the previous 9 years.”
So how true is that? Is Property a good return?
Can you buy any old property and get good cash flow with LHA tenants? Even if the answer is yes, why not maximise your cashflow further.
In this interview Julie Hanson, Just Do Property, asks John Davies, Hedge Property Investment, exactly that, “Is Property A good vehicle for Investors?”
Obviously we are all told it is a good vehicle for investors and John outlines perfectly how it can and also can not be.
A property is NOT an Asset but a Liability until such time that the income is greater than the cost of ownership. At any time, but especially in this market, the “Market will always grow” strategy is not great bet.
The wrong property in the wrong location will clearly prove to demonstrate that Property is NOT a good vehicle.
But as the saying goes “Location, Location, Location”. When buying:
- the right property,
- in the right location,
- at the right price (discounted against the market)
- using the right strategy
Then you can let at a profit and the property becomes an Asset and therefore a GOOD vehicle for investors.
A key thing to remember is “Always, Always, ALWAYS buy at the right price!!”
Of course there are various strategies one can follow. But as with ANY investment you can not invest without knowledge – you must address lack of knowledge first – hence the sole purpose behind “Just Do Property”.
In essence there are 3 types of investors each bring profits from property in different ways:
- Landlord = Typically a hands on investor who manages their properties themselves, maybe with an “Estate car” with all their tools in the boot…
- Investor = they have another income and would use a management company to look after properties
- Trader = buys and sells properties or trades options on properties
Whichever type you decide to become remember “If you have no money what so ever DONT JUMP IN“. Gain some education, dont be embarrassed to ask questions and get along to the numerous networking events that are held around the country – visit our UK Networking Events List for more information.
If you would like to ask John a question click here