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Hands On Property Investing

hands on property investing

What are we covering?

Today we’re going to look at how you can be a bit more involved and get started with hands on property investing.

Who is hands on property investing for?

If you’ve got the time or inclination (or are just a cheapskate and don’t want to pay anyone else), then hands on property investing might be the way to go. If you’re on the fence, then this will give you an idea of what it takes to be successful at it, or at least know what you should be getting up to.

Why me, how am I qualified?

I like doing things the hard way, so when I first started out I did everything myself. When I went full time in property, I became a letting agent, then building surveyor, then mortgage broker. So I’ve done most aspects of property investing myself. It’s kinda fun, but it’s also a pain in the arse. Hands on property investing isn’t for everyone, but if you want to make this your career then it’s very possibly perfect for you.

Main Section

Using the same breakdown as we did when considering being a hands off property investor, let’s do the same for hands on property investing and take a look at things in the broadest sense. You’ve generally got to;

Find it

Two options here. The first is the one I follow. You look through all the main portals; Rightmove, Zoopla, etc. and you speak to agents and you look at comparable properties to see if you’re getting a good deal. There is a lot of grunt work involved, but it’s quite helpful to start building up your knowledge of an area that you’re investing in.

The second option, which I personally think is a nightmare, is to go door to door asking people if they want to sell their house. OK a lot of this can be outsourced; you can leaflet drop people, pay someone to drop off your letter, etc. but it’s a huge volume play. You’re hoping to find the right person who is desperate enough just when they pick up your leaflet to sell you a house

Hens teeth springs to mind. But, it’s an option.If you’re going to be walking round streets, then expect to buy one property out of every 2,000 – 5,000 properties you target. And it might take 6 months to get to that stage.If you’re trawling the online portals, then that is likely to drop to closer to 50 properties that you carry out some due diligence on before you move to the next stage. So 25 – 50 hours work maybe?

Hens teeth springs to mind. But, it’s an option.If you’re going to be walking round streets, then expect to buy one property out of every 2,000 – 5,000 properties you target. And it might take 6 months to get to that stage.If you’re trawling the online portals, then that is likely to drop to closer to 50 properties that you carry out some due diligence on before you move to the next stage. So 25 – 50 hours work maybe?

View it

You’re doing hands on property investing, so this is the fun part! You get to wander round other peoples houses and decide if you want to own it. I usually work on the basis of a viewing is 20-30 minutes and it’s usually the same in travel time. So call it an hour per property.

You will likely view 10-20 properties before you get to buy one, and that’s being generous.What you’re looking to do here is find what the issues are with the property, why is the person selling it, what can you do with it once you own it, will anyone else want to live there or buy it off you in the future, is the building itself in good condition, what’s the area like and are the neighbours decent enough humans.

There’s a lot to take in, and any one of those aspects can be the difference between losing tens of thousands of pounds or making a profit.

So stay focused!

Buy it

I know it’s possible to do your own conveyancing but honestly, I haven’t even bothered to look into it. Nor can I be arsed for the sake of this article. Just don’t do it.

Finance it

Google used to have a good mortgage comparison website, but that’s now disappeared. The other money comparison sites; MoneySupermarket.com, ComparetheMarket.com, etc. are a good starting point. But be aware that they don’t cover a lot of finance options.

You can find a mortgage really easily online, but whether or not it’ll be the best mortgage for you is a completely different matter.

So add in some time to do comparison with as many finance options as you can face looking through, and you can easily go through a couple of hours a day for a week before you settle on one you like.

Let it / Sell it

Looking at the sales side of things first, there are lots of new online estate agents out there now. Emoov.com, Tepilo.com, HouseSimple.com, PurpleBricks.co.uk to name a few. These tend to vary in prices, but are mostly under £1k. What they do for that also varies, but usually you’ll end up having to do viewings yourself. The online agent will handle that advertising and handling calls to arrange viewings, then some will do the negotiation at the end with the other side.

You get what you pay for in life, so don’t expect these to be particularly hot on getting people to your house or chasing viewers up with feedback, etc. If you’ve got a very easy house to sell then it’s possibly a good option, but if it’s a bit quirky – then sometimes an agent can be helpful. Another option is to put your place on eBay or Gumtree, but only investors are really looking there so you’re likely to get stuffed on price.

As for letting agents, check out easyProperty.com, Upad.com, PurpleBricks.com. Again these guys will advertise your property on the major portals and then leave the rest up to you.To be fair, letting a property is quite a bit easier than selling one. I’ve had success with leaving a phone number on the outside of a property while it’s been getting refurbished and had it let the day works completed.

You need to make sure you comply with all of the necessary legislation though. That’s the most important part that an agent can help you with. National organisations such as National Landlords Association or the Residential Landlords Association have a lot of free information that will help you get it right, but it can be quite time consuming and involve lots of admin! If you like that, happy days, if not, farm it out to someone else.

The critical thing to remember is that if you get it wrong, you can end up being fined thousands or might not be able to get access to your own property when you want to. So it’s vital to get that bit right!

Manage it

Same as above really, join a national organisation to make sure you aren’t doing anything stupid. The National Landlords Association has an advice line you can call and ask them what to do in your circumstances. Use them.

If you serve the wrong notice or not in the prescribed format, you can find yourself two months into an eviction process to only find you’ve ballsed it up and have to start all over again.

Or don’t register the deposit in the right way and you effectively don’t have one anymore, and can be fined up to the amount of the deposit.

Lots of sneaky shit like that you’ve got to keep up with.

So the actual managing of properties and tenants isn’t that difficult, it’s making sure you’re doing it in the right way that is the more time consuming part.

Maintain it

This is another one where there are a few degrees of hands on property investing levels. You can literally be the guy or gal that goes round and fixes the boiler (assuming you’re qualified), or you can be the one who rings round and gets the quotes and organises access.

If you have a trade then I’ll assume you know how this works so won’t go into it.

If you want to be hands on and organise people then this is reality of maintaining and managing refurbishment works.

You’ll need to ring 10 contractors to speak to 5 of them for 3 of them to turn up and for 1 of them to give you a quote.

Contractors are an absolute pain in the arse. If you’re reading this as a contractor – don’t be a pain in the arse and you’ll make a fortune.

If you’re trying to get hold of someone to do a small job such as fix a leaking tap or box in some pipework it can be even harder. It’s a tiny little job that for you as the Landlord isn’t really worth paying much for, but for the contractor that does it – it’s still taking up a couple of hours of time, and they don’t really want to do it.

So you end up throwing money at them to do small little jobs. Once you’ve got enough properties to be of interest to a contractor, then you can start demanding better (read quicker and cheaper) service from them.

Once you’ve got a decent list of contractors, then it does become quite a lot easier. But you’ll find that someone who was good eventually becomes too busy for you (because they are so good), or goes off the boil and starts letting you down because they take you for granted. So it’s a constant process of finding and maintaining relationships with these people.

Conclusion

So that about sums up how hands on property investing looks in the real world. It’s not pretty, but it’s sometimes fun, sometimes frustrating, and ultimately may or may not save you any money. When I started and was doing everything myself, I took the view I wanted to learn it all so I could do it for a living. If you’ve got a decent job and are earning a reasonable sum, and don’t want to do this full time, then I would give serious consideration to not doing any of this yourself!

Financially and on paper you’ll save more by doing it yourself than paying others, but if it takes over your life you’ve got to ask if it’s worth it. I know people who spend every evening and weekend doing property stuff. Whether it’s speaking to agents, viewing houses, finding contractors, or reading up on landlord law. Great stuff if you want to do that, but I’ve found most people I work with who start off saying they do, quickly realise how boring it is and how time consuming it is.

Is there an alternative?

As we spoke about in the last blog on hands off property investing, there is an alternative. You can do a mix and match approach.

So if you like the idea of finding places and meeting agents and figuring out what’s a good property – cool crack on with that. Then once you’ve bought a place, hand over all responsibility to an agent to deal with.

If you don’t want to deal with the agent either, then you can get me to Asset Manage your property for you and step in between you and the agent.

Equally if you don’t mind managing things once it’s set up, but don’t have the time to find the right properties in the first place, then you can see if someone like me can build you a portfolio of high yielding properties and hand you over a ready made portfolio. You can then be involved in the running of the portfolio.

As ever in property, it’s a case of figuring out what works for you and not being pushed down a route that works for someone else.

Hopefully you now have the knowledge of what’s really involved in hands off property investing and hands on property investing, so you can make the right choice.

Hugs and cuddles

Damien

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