UK’s Top Property Investment Questions Answered

As the UK’s leading property investment education provider with nearly 20 years’ experience, we get inundated with thousands of questions every year.

And, rightly so. You have burning questions as you don’t want to make mistakes, and we have the experience and knowledge to help you make the right decisions.

That’s why we’ve answered the top 10 property investment questions our community has asked us below.

You’ve heard the phrase “as safe as houses”, and that’s because property investment is one of the safest investments you can make.

Not only will your property’s capital appreciate every year, but it can also make you a monthly income either as a single-let, HMO or Serviced Accommodation.

How Property Investment Builds Wealth Over Time

Question 1: My brother and I own a buy-to-let outright. We bought it in 2008 for £136K and it is now valued at between £300-325K. Would you refinance it to buy one or two more properties?

Answer: We absolutely would refinance that property. Doing the calculations, if you lent 75% LTV on that, you could pull out £225K.

In certain parts of the UK you could buy as many as 9 buy-to-lets with that money, that are going to make you at least £300 per month, NET, that’s £2,700 per month income. Plus, you’re going to have 9 properties increasing in value as well, that you can again refinance in the future and it will compound over time and massively increase your wealth.

The Benefits Of Leveraging In Property Investment

Question 2: How did you buy an £80K house with £0?

Answer: There are many different ways that you can acquire property low and no money down. Now the specific strategy where we bought an £80K house with £0 is a bit more of an advanced strategy called bridge to buy-to-let.

This basically means, we’re using bridging lending to buy a property that we’ve got at below market value with a view that we then add the value then refinance that property on the higher value and pull all of the money out so I can then pay off the bridging lending.

To give you context, if you take lending on a property, standard lending would be 75% loan to value based on one of two numbers, either the market value which is what it's worth as it is in its current condition or the price that you pay normally whichever is the lower of the two. So you’ll lend on 75% of the price you pay normally.

Now my bridging lender that I work with in partnership lends up to 90% loan to value based on the market value not the price you pay which massively reduces your amount in. Then when you add that on with getting the property cheap below market value it actually means you can buy it, refurbish it, and refinance it, with no money in for you, that’s one of many ways that you can acquire property with no money in.

Investing in Property vs. Stocks and Cryptocurrencies

Question 3: Why don’t you invest in things like Bitcoin?

Answer: We have no issue with people investing in cryptocurrencies, however, we prefer to invest in something we understand and are educated in.

We know the history of property and the value of property is always going up. Even if there’s a crash, we know it’s going to recover (people will always need somewhere to live!).

And, for our long term investment strategy we plan to hold onto these properties until we die, so they’re only going to go up in value, we know that and are confident in that.

Question 4: You need 3 properties at London prices or £1.2 million, buy dividend stocks at 4% yield and relax.

Answer: With dividend stocks, you don’t have any control over them. The CEO of that company could mess it up and then you’ve lost everything.

For us, property is the safest place to put your money. They say “safe as houses” for a reason. Also, sometimes dividend stocks don’t pay out because the market crashes for example.

We know someone who invested £350,000 in dividend stocks and they’re making between £900-1,000 per month.

We have one HMO that makes us net £1,000 per month and our investment into that property was less than £35,000. If you put £350,000 into property then you could be making a substantial amount of money, a minimum of £4,200 per month. It’s secure, you’re in control, you control the property and lending on it. It compounds over time and where else can you get an asset where you can leverage up to 75% loan to value on it? That’s why we invest in property.

How Refinancing Can Help You Expand Your Portfolio

Question 5: When you refinance, doesn’t your cashflow become even less?

Answer: Yes, by refinancing for a higher value of the property, your mortgage payments are going to increase, therefore your profit is going to decrease.

But, the bit that you’re missing is that you are going to release more money to be able to reinvest that into other properties. These properties will then cashflow you more.

Again, these properties are going to increase in value, you can refinance them again in the future, pull even more money out and compound it - rinse and repeat the process. This means you will constantly be growing your portfolio and constantly building your wealth.

This is the thing about property investment, when you understand it, when you’re educated, you understand that you want to be making your money work for you.

By refinancing, you’re pulling money out so that you can reinvest it and make your money work harder and stronger for you.

To Refinance Or To Be Mortgage Free?

Question 6: I may be an old school property investor, I have been taught to cash up, be mortgage free.

Answer: Any educated property investor is going to want to make their money work for them, so they’re going to refinance those properties to release money and reinvest it.

Now, there is a limit, and it’s different for everyone, as to what level of lending you want to take. For us, we want to reinvest our money and grow our portfolios as quickly as possible.

Investing in Properties through Limited Companies

Question 7: Are all of your properties in your own name or under a limited company?

Answer: We recommend that all of your properties are in limited companies. These can be various different companies, depending on how many business partners and Joint Venture partners you have on your investments.

This works out to be more tax efficient to run your properties through limited companies. Doing this means you can offset the interest for tax purposes and that means you’ll make more profit.

Understanding the Modern Method of Auction

Question 8: Modern method of auction, I find it so complicated that it gives me a headache.

Answer: Our take on this is that modern method of auction is a way for Estate Agents being able to charge more money and make bigger fees for selling the same house/properties as they would on the open market.

What happens is that they'll get loads of interest because the guide price is set low, loads of people bidding on the property and in reality the property is going to go for market value or probably even higher. So, it’s not in your best interest to buy from modern method of auction.

Off-Market Property Deals: Finding Hidden Gems

Question 9: The problem is that it seems like there’s 10 people interested in every house. We’re first time buyers and have missed out twice after offering £20K over the asking price - how can we find a suitable property?

Answer: The market is really hot right now. To find really good below market value deals for investors to buy is to find off market properties.

In order to do this you need knowledge and the right marketing strategy to find them and filter out the really motivated sellers.

When you find a motivated seller you will absolutely do a deal.

Estimating Maintenance Costs in Property Investment

Question 10: A kitchen only lasts 10 years and costs £10K. That’s £1K per year out of the profit, bathroom will be the same. It costs a small fortune to replace this stuff, then there’s redecorating to allow for, I can’t seem to see where the profit is long term.

Answer: Firstly a kitchen doesn’t cost £10K, especially if you get trade prices like us. We can get a magnet, medium range kitchen for £1K, and to be specific, that’s for an 8 unit kitchen with a gas/electric hob, gas/electric oven, extractor fan, sink, taps, waste and handles.

If you buy at the right price you’ll make a certain amount NET per year from those properties, that’s not where the BIG money is. The big money is in the price that you pay and then the value that you add to refinance.

When you refinance you pull substantial amounts of money out of those properties and properties are increasing in value (all you have to do is look at the graph of property prices from when they started getting recorded, the line goes up, we’ve had crashes but it's always recovered). Your properties will appreciate over time and you can refinance and pull more money out.

The Value of Property Education for New Investors

Question 11: I’m 24 years old and working my way to buying an investment property, but doing some research I’m starting to think it’s not worth my while, is it?

Answer: If you don’t understand it and you’re Googling it, then remember Google is free and free advice is worth every single penny.

You don’t know that the people who are writing articles on the internet are real life, property investors themselves. They might just be writing about property investing, but not doing property investing.

If you ask an amateur a question, you’ll get an amateaur answer and everyone stays amateur.

Instead, you should get your information from a trusted source, and from people that you know are actively investing in a strategy that interests you and you would like to invest in.

Getting a property education is the best thing you could ever do. Get educated, from the right people, those who are where you want to be.

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