Keeping you posted whilst in the Caribbean and giving you some essential considerations when looking at overseas property here is my Overseas Property Essential Tip No. 2. My focus in this next stage of the research is Tourism and demand. You can have the next shop in the world, the best hotel in town but if there are no customers and no demand, you have no business. Thus, essential Tip No. 2 for overseas property investing is research tourism and demand.

Following a lot of requests over the last year about overseas investments and whether they still stand in the current market I have chosen to share some insights with you. If you have not seen my previous post on this please have a read:

http://www.rohanlive.com/what-to-look-for-in-an-overseas-investment

So here is the first of TEN essential tips I would like to give you when looking at overseas investments. This is being written live from the Caribbean.

Greetings from St Vincent in the Caribbean. As the recession has taken a grip on so many peoples lives, other people have held their vision and driven hard to ensure that success becomes a reality. No matter what your circumstances, creating medium to long term investments strategies is not an option – you MUST do it because we are far from being out of the recession. From my research I believe that there are now some excellent opportunities to make in Overseas Property Investments, as long as you do your research. In the next 5 – 10 years it will be the well prepared person that will stand strong and have security beneath there feet. The key is to Think Medium to Long Term when looking at Overseas Property Investments.

For those who say that they are too busy or that they don’t need to look at another strategy – then I would suggest that you read through this BLOG series – occasionally a hands off opportunity comes along that does not require you to deviate from your path. More over, it can add to your long term vision. I feel compelled to share this with you because the driving force behind one of these investments is an amazingly BIG vision and one worthy of sharing.

Whilst is am out here in St Vincent extending my research into the area and the investments that we are making, I feel compelled to share with you TEN essential requirements that I look for in an Overseas Property Investment. Over the a series of BLOGs and YouTube videos I will be sharing with you what to look for and showing you live how your investments should shape up.

Watch closely for the first of 10 essential research factors.

Over the next few weeks I will be giving you live updates from the Caribbean and going through with you what to look for in an overseas investment. The has been a lot of fear developed over the past five years amongst UK investors due to the problems with Overseas property companies taking advantage of investors with spare cash and equity. Properties were not stacking up, prices were over extended and rental figures and occupancy rates were low. Coupled with over saturation, this led to some major problems for many investors and novice-investors when the recession hit.

My goal is to help create come clarity amongst the smoke. So keep an eye out for my BLOG and youtube videos over the next few weeks.

In the past few weeks since my last speaking event I have had a large number of enquiries about The Rule of 72 that essentially helps you calculate how quickly your money can double. In particular, I was asked to show The Rule of 72 in relation to the type of high return investments that I take advantage of in order to illustrate how liquid funds (money invested) can grow rapidly in comparison to other vehicles.

I have therefore put together a 9 minute video presentation that walks through The Rule of 72 with examples of both asset based (Property) and liquid based (investment strategies) to illustrate how it works. to futher help this process I have also arranged a live webinar shortly to explain this further and show how it can be used to provide a passive monthly profit based strategy – so watch out for this on my events page or simple request an invite at enquiries@rohanlive.com.

I managed to grab my good friend Raj Deb who has a multi-million pound property portfolio across the UK and ask him where he finds income generating properties in the UK. Have a listen to this 15 minute podcast and hear Raj’s current views on the market.

If you wish to have a chat with Raj and his team about locating income properties for you please email: enquiries@rohanlive.com

 

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I have received some very positive comments about my blog: http://www.rohanlive.com/house-price-to-rental-ratio and have received many requests to expand on this. I therefore thought it would be good to write a few blogs on House Price to Rent Ratio Vs percentage of properties rented in an area. Actually, house price to Salary ratio is a factor that very few investors actually consider. House price to salary ratio is simple to calculate and should be used in context to the exit strategy you are looking to achieve e.g. selling or renting.

Let’s explore this further. In any market, any country anywhere in the world you can look at the average house price and divide it by the average salary to give you the HP/S ratio. This can be an extremely valuable tool for those wanted to find out if a market is too expensive and also whether there is potential for more growth. For investors, this this calculation allows us to establish if the properties we are buying can be sold on easily for profit. I will explain.

Depending on who you speak to, the ratios work like this – Low = 3 – 5, Medium = 5 – 7.5 (8) and High = 7.5 (8) and above. So for example, if the average house price was £150,000 and the average salary was £30,000 then the average house price to salary ratio would be 5. If these figures were based on national averages then your national HP/S ratio would be considered to be Medium. National averages on their own are quite valuable on their own as they give you a measure of where the country is – however, when you start to use them with regional or local HP/S ratios, then they become  very useful.

For example – if you were looking at a property to purchase, renovate and sell then you would want to ration to be equal to or ideally lower than the national average. When the HP/S ration is lower that the national average it will be more affordable to the people who are looking for that type of property. Imagine you look at two properties to buy, renovate and sell. Both will make you a profit of £25,000 when you sell. Property (A) has a re-sale value of £180,000 and Property (B) has a re-sale value of £270,000. Now imagine that the the typical salary in the area for the type of people looking at these type of properties is £43,000. If you had not established this, if you had not done your research and found out what the demographics of the typical buyer is and what they do and what they earn, then you may miss an important point. Imagine that you had purchased property (B) because you thought it would be a nice deal and people would “like” it. Unfortunately if you run the numbers you will see that actually Property (A) is a better strategy.

Property (A) HP/S ratio: £180,000 / £43,000 = 4.2

Property (B) HP/S ratio: £270,000 / £43,000 = 6.3

You can see that (B) is above national average and relative to (A) is higher and less affordable. When this happens, properties in the (B) catagory always tend to stay on the market longer, don’t sell easily and cause problems for the investors. RESEARCH IS ESSENTIAL.

I will discuss this more in my next few BLOGS.

One last thing I want to leave you with. When the House Price to Salary Ration is HIGH, then more often than not, the percentage of properties in the areas being rented is generally higher. If you think about the logic it makes sense. If HP/S is high, properties are less affordable to buy, therefore people choose to rent until they can save up enough money to buy.

MAJOR TIP: When looking to invest in an area or buy and sell in an area – carry out the HP/S calcualtion for the exact type of property you are looking to buy. If you are buying one bedroom apartments, then find out who buys them and what they earn then use those figures to calculate HP/S ration NOT the salary of a person who would normally be buying a four bedroom property. This will give you a more accurate assessment and you can compare like with like. Average HP/S ratios for apartments can be compared with other apartments, housese with houses etc etc.

I was talking to one of our mentorship clients this week and reminding him of the importance of taking control of your circumstances rather than circumstances taking control of you. What do I mean by taking control of your circumstances? Let me give you an example of a situation just recently where we were due to complete on two properties within two days of each other. The first property completed without a problem and the second property for some unknown reason, the same mortgage lender who lent on the first property withdrew at the very last minute which caused us a slight challenge.

Neither the solicitor or the mortgage broker were able to establish quickly what the problem was and the result we had to go through a procedure to find out why the case was pulled. Important message here is that we, as investors and Wealth builders cannot allow circumstances to stop us in our tracks. You have to be prepared to act beyond your circumstances. Success favours those who act in spite of their challenges, who refuse to allow set-backs to control their outlook and mood. This applies to every area of your life.

When it comes to property and investments, the market conditions are changing all the time and it is my belief that it is unlikely that things will get better in global economy in the very short term. We have a long journey ahead of us.

What this means is that each of us, no matter what our circumstance in our career, relationship, finances and family must take control of our  world and not live in fear of what might happen. Grow from the inside out. Learn. Study. Ask questions. Have a bigger view of the world and be prepared to adapt. The world is ready for new leaders, people who have faith, courage and a commitment to a greater good.

If you want to start this year off with a boom and make some dramatic changes then start the year by mixing with the right people. “Your networth in the future is equal to you networth” is a phrase I heard many years ago and I believe it to be true in several ways. More than anything we are going into a challenging period ahead economically. This first phase of the recession will lead to both challenges and opportunities. The double DIP is a high probablility occurence and as a result it will be essential that you have great contacts and people to bounce ideas and business ideas off. Your networth is equal to your networth – means in this day an age that you must have a mixed group of contacts. People who both compliment and challenge you. Who have ideas and strategies beyond your experience and who can share therse with you.

So start the new year in the right place. That is exactly why you must be with me on the 17th January at the Berkshire Property Meet. I will only be attending once this year as I have other commitments in the week. So don’t miss it. ALSO, it has virtually sold out – those who delay will miss out on tickets. Go to my EVENTS page to book onto this. Or visit: www.berkshirepropertymeet.com

Happy new year to everyone. I want to invite you to launch the new year with massive momentum by coming and watching me speak at the Berkshire Property Meet (www.berkshirepropertymeet.com). The date is 17th January in the evening. There will be only one date for this event so do not miss it as it is almost sold out.

Have a quick watch of my video. I will be exploring where I believe we are in the market today, and where we are heading and what shifts need to take in you, the investor, in order to take advantage of the changes ahead.