If you have been following the news recently I am sure you will have heard that “the double dip is here” across many many news stations. Double Dip is on the tip of everyones tongue! Most people are not clear on what Double Dip really means but for most it sounds “bad”. I am producing a short video to discuss this further but for now I want to talk to property investors and offer a few tips and considerations for those who hold an existing portfolio.
In 2011 I did a series of lectures and presentations warning that we would ultimately go into a double dip. History tells us that this is virtually inevitable! Taking that as a basis for moving forward, facing up to it and accepting it, then it is simply how you and I manage these economic changes that will define how we are living in 2 – 5 years time.
So lets start with property investors – however, if you have read this far then I would like to say that I will have additional tools that I believe would be massively useful for you (and your partner if you have one) on a financial and professional level at my next Creating Your Turning Point One-Day Workshop coming up very shortly.
Double Dip Tips For Investors
There are different approaches to this depending on whether you currently own or not. For now lets discuss those who own property. If you don’t then, read this anyway but also watch this space.
- Claim all allowable expenses – the Inland Revenue have a set of allowable expenses that most amateur investors are unaware of in detail. I have taught thousands of investors over the years and many who have portfolios are paying unnecessary taxes because they have the wrong accountant or are not aware of what can be claimed.
- Consider using Interest only mortgages – you will need to seek advice from an IFA, I am not a financial advisor, however, as an investor and the same goes for my close friends who invest; we have found that utilising interest only mortgages enables properties to cashflow on a higher level than if on capital and interest. Again, I meet many who do not do this and struggle with cashflow on many of their properties. One can review the financing further down the line as the market changes.
- Review rents – check market rents and consider increasing them. You may also consider doing a light refurbishment on the property or cosmetic uplift which can also justify an increase in the rent.
- Find tenant buyers – Purchase Options have become very popular through Phase 1 and Phase 2 of the recession (remember we are NOT out of it by a long shot). By offering future buyers a chance to enter the property now you can benefit from long term tenants and also put in place an exit strategy on the property. This is a highly diverse strategy in itself.
- Convert to HMO - as more people enter the country on short and long term visa, divorce rates increase (which they typically do in a recession) and less first time buyers can afford to buy – then room-lets become more and more in demand. Houses of multiple occupation (HMO’s) can create more income for you from a standard house which may normally only cashflow a small amount.
- Run cashflow forecast model – are you clear on your cashflow for the next 12 months? If not then put this in place now. Anticipate possible challenges and get your financial systems to handle this in place.
- Establish complimentary income/wealth strategies - now is the time to reviewing all your vehicles. I will be discussing this on our next One-Day Turning Point Workshop. You have to be clear on where you are, what you want and what vehicles are the right ones for you.
- Tighten up you spending and borrowing levels – in this respect I am simply saying that I find it helpful to review any borrowing and check in to see if it can be reduced or moved to lower interest rates. Too many people sit on high rates when there are some clever things that can be done to “relocate” the money to a much lower rate option.
The Double Dip is a real phenomena, it has show itself again and again in history – it is what I would call a Turning Point on literally all fronts of a personal life. It will in some way affect you on a personal and professional level. What defines us in these times is how we are prepared, what we do now in the moment that propels us or drowns us. Doing NOTHING is not an option.
For this reason I would encourage you and anyone you know that truly wants to prepare for financial, personal and professional turning points to come join me at our up and coming one-day Creating Your Turning Point Workshop. It will be worth every ounce of your energy and time spent there. If it means rearranging a commitment to be there then all I can say is “do it”. You won’t regret it. We, you and I face a Turning Point in history and we have a chance to make an impact if we have the right tools. That is where the Turning Point Seminars will help you…