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Simon Zutshi: Can You Still Make Money From Property?

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Speaker 1  0:01  

The purpose of wealth talk is to educate, inform, and hopefully entertain you on the subject of building your wealth. Wealth builders recommends you should always take independent financial tax or legal advice before making any decisions around your finances.

Christian Rodwell  0:19  

Welcome to Episode 208 of wealth talk. My name is Christian Rodwell, the membership director for wealth builders joined today by our founder, Mr. Kevin Whelan. Hello, Kevin.

Speaker 3  0:28  

Thanks, Chris. Good to be with you again. Yeah, lots of things happening on the news. doom and gloom everywhere. And I guess we've got a good voice today to penetrate through the through that gloominess and give us all hope for at least one of the wealth building pillars, but more of that in a moment, I guess.

Christian Rodwell  0:48  

Yes. Well, yeah, we are focusing predominantly on property today. So out of our Seven Pillars of Wealth, the property portfolio pillar is number four, and maybe worth touching for a second, you know, we will introduce our guests who actually is Simon zushi. So stay tuned, because Simon always has some wonderful insights into the market. He has been investing for a long, long time. But of course, you know, there are multiple pillars, which you can use to build your wealth property is a very popular one. We know that in the UK, Kevin, but we're going to be talking today about markets you said about change. You know, the news is always doom and gloom. And sometimes you have to adapt, don't you as a wealth builder?

Speaker 3  1:24  

I think I think there's a key distinction to make here. That as a wealth builder building assets, you've got a job to do, which I think is best articulated by saying this a wealth builders trying to create certainty from uncertainty, right? In other words, how do you get a predictable stream, multiple streams of recurring revenue, to make you financially bulletproof from all eventualities in all economic circumstances, whether they're in the rise were in the fall, whether in the wax all the way, you've got enough of a diverse range of assets that you own or control, you don't have to own everything. Controlling an asset is just as important as owning it. And I think Simon will touch more about that, as well with the lease options, for example. And, and more on that when we debrief, I guess, but the when you recognise that life is uncertain, but you're trying to create certainty. The joy of this is knowing that uncertainty is permanently there. Right. And there are two types of uncertainty, Chris, disruptions, disasters, and there are two types of two impacts, macro, and micro. In other words, then it disruption is something that happens, that affects your current flow. Right. So an interest rate increase. That's a disruption. It impacts on the fund flow. It's a macro. In other words, it's happening to everybody. But how you deal with it is uniquely you. And this is really important. Because how you deal with something. If you're a true wealth builder, you look at how are other people dealing with it. Because wherever somebody sees an opportunity, somebody sees a problem. You know, we all know this, this whole concept in Simon talks a lot about motivated sellers. But that's just another way of framing the same thing, which is somebody seeing a problem, you see an opportunity, they want to get rid of something, you can acquire it, or you can control it. So that's the disruption. And the disruptions are either proactive or reactive. So you choose to do something you disrupt yourself, like you choose to give up the rat race. That's you. A reactive one is you having to react to Something's happened to you, you've just been fine. Now you're going to react to that. And so there's always going to be disruptions, big ones, little ones, things you choose to do things that happen to you. And I think the joy of being a wealth builders you can always choose. You can always choose your response, which means you're always responsible. And that responsibility means to be aware of what's happening macro micro, be aware of what's happening in markets, be aware of changes, like AI, the use of new tools, and be constantly on vigil. And that way, it's just a joy to be a wealth builder. You know, where other people are seeing doom and gloom, I see opportunity where Simon has been around for a long period of time. He sees opportunity. He doesn't say doom and gloom. You know, you'll listen to Simon You never feel doom and gloom with Sam and he's, you know, yeah, he's pragmatic, is not just an optimist is a pragmatic guy with lots of experience. And I think it's really important to tune in to what other people say, not to do what they do, but to listen to what they have to say and decide, how do you choose to react to that, and the the Kiyosaki point, which I love. Robert Kiyosaki is your your wealth is determined by the ability you have to make distinctions and distinctions is about is looking at the situation, and seeing how you choose to react, and getting lessons from other people to help you sharpen your saw, so that you can react in a way that serves you, not to the disadvantage of others, but it serves you and solve somebody else's problem. You asked a very short question I gave you a really long answer. Sorry about that.

Christian Rodwell  6:16  

Would that's okay, it was very well delivered there. And it's the setting of your sail, isn't it as Jim Rohn always said, you know, the same wind blows on us all, but we can have a different reaction. And depending on that, a different outcome, some will end up exactly where they choose to be, and others will let the wind blow them in all sorts of directions. So let's listen to Simon as always, really enjoyable conversation. And hope you enjoy listening to this too. And we'll be back with the debrief right after Simon. Welcome back to wealth talk today. How are you?

Unknown Speaker  6:49  

I'm really well, thanks, Christian. Thanks so much for asking me back.

Christian Rodwell  6:51  

Ya know, it's always pleasure to have you on the show Simon. And, you know, many of our listeners, of course, will know you, the founder of the property investing network, you've been investing, I believe this year, is it 28 year anniversary of beer this

Speaker 4  7:03  

month, actually is my 28th anniversary of buying my own home, which I lived in and, and rented out some of them. So I came a living landlord. But it wasn't until 98, when I moved out of that first house bought another one that I moved into with my friends and that first house became a student property. So that's 25 years of being an actual landlord, and then 20 years of teaching other people how to do it.

Christian Rodwell  7:25  

Yeah. So I think it's fair to say, you know, you're the the longest running consistent trainer in the UK, that's been investing all the way through. And of course, we know, every market has its cycles, the property market is no different. And we've seen some cycles over the last 20 years, haven't we? So we're in another period of change now. And today, we're going to talk about, you know, can you still make money in property? Simon?

Speaker 4  7:48  

Yeah, absolutely. And you know what, it feels easier to make money when the markets going up. And in the UK, as I always say, because we live on this island with a limited amount of accommodation and increasing population, generally, the values and the rents go up, especially with inflation right now, that kind of helps those things. But every market is cyclical. It doesn't always go up. It has corrections, we always had the huge property market crash in 2008. That was caused by as the global financial crisis and it was, you know, people were losing money and banks weren't lending, etc. And I don't think we're going to have the kind of crash we had back then. But we're definitely seeing a correction prices are coming down. I think they've got further to go. And I think we'll probably correct back to where prices were before the pandemic and before the surprising boom we had during those pandemic years.

Christian Rodwell  8:37  

Yeah, yeah. Because lots of people are, you know, understandably bit nervous at the moment. They're scared. They're, they're waiting to see what's going to happen, right. But does that actually make it easier to find deals?

Speaker 4  8:47  

Yeah, it does. Because, obviously, in a booming market, we have a seller's market where there are more buyers than there are sellers, which is what we have last couple of years. It's harder to find deals, but then in the current market conditions where the values are coming down. And there are still lots of people who need to sell and I say increasing numbers of people who have lot more landlords who are just fed up or the interest rates might be too high, and they are looking to get rid of those properties. We've got homeowners who maybe can't afford their home mortgages they're looking to sell or people just have to sell because they're relocating whatever it might be. So there's a big supply of property for sale on the market. And yet there aren't as many buyers because as you said, Christian, a lot of people are nervous, they're worried as well. If their families are coming down, maybe we should wait till it hits the bottom or that they're trying to buy they're struggling to get finance etc. So there are less buyers in the market more sellers. So it's a buyers market, and actually, many people are waiting, but I think that's probably the wrong thing to do. If you know what you're doing. You have a bit of courage getting out there and picking up some really good deals while prices are coming down is definitely the right thing to be doing.

Christian Rodwell  9:54  

Yeah, now, there's so many strategies in property you teach me and I'm probably most of them Simon. You And certainly, you know, one of the I guess the entry level strategies is by select right. And people are doing the numbers at the moment. And they're simply saying, Well, that just doesn't stack up. Right. So so let's begin with your thoughts on that.

Speaker 4  10:11  

Yeah, you're absolutely right. So over the years, and I've been teaching 20 years now, we've always used the an interest rate of 6%, when we're looking at a property to stack it up to see where it makes money. So we always use an interest rate of 6%. That's because prior to the credit crunch, the Bank of England base rate was about five and a half 5.7. So that was the kind of rate we were effectively paying on mortgages, then the credit crunch came, and interest rates actually came down. So for the last decade, the Bank of England base rate has only been half a percent. So what that meant, there are lots of people who've got mortgages, before the credit crunch, and their effects, you're paying two or 3% on their mortgage. And if they had a single equity, they were making lots of money on their single property. And people who were investing after the credit crunch, were buying and again, getting mortgages, maybe three 4%, they were making good money on their property. But the reason we use 6%, we knew that interest rates at some point would always go up. Now, they've shot up in the last 18 months, probably quicker than most people expected. But we knew that would happen. So all of my clients who have trained with us, they've stacked their promises or 6%. So even though their cash flow has reduced, they should still be making money. But there are many people who maybe didn't train with us, or they just worked out the mortgage cost based on the mortgage at the time when they bought the property that was maybe three or 4%. Now they're paying six, eight, some people I know are even paying over 10%, because they've got variable mortgages. And so what that means is many people have got properties, the interest they're paying each month is more than the rental income coming in. So those properties are not making money, which obviously is not good. Now, bear in mind, you have to be just aware, I'm only talking about people who want variable mortgages. If people have had a fixed mortgage, they've not been affected by the interest rate rises yet. And it's something like 1.8 million mortgages are on fixed times, which are due to come to the end at some point during, during 2023. So that means for a lot of people, homeowners who might have had nice low mortgages, I've seen people where their mortgages sometimes tripled or quadrupled. And that suddenly is unaffordable for many people. And then also investors same thing, they've had a nice though motors, suddenly it's gone. Now, to be fair, rents have also gone up over the last couple of years, maybe as much as 20%. That's definitely helped. But there are some landlords who've got problems with property that don't stack up anymore. And if you're buying a property, you know, you might be paying 6% on your mortgage, but the stress tests that banks are using might be seven or even 8%. And so they just don't make money. So many people are saying property investing is dead. But that's because they think that property investing is just vital it but as you alluded to earlier, Christian, there are many, many strategies we can use. And so my recommendation and the current market conditions, there are two strategies you really should be looking at. One of them is the good old HMO house of multiple occupation, we take a house, rent out individual rooms, and you as the landlord genuinely pay the bills as well. And what you're doing, you're providing really affordable accommodation for people who don't want to live on their own, can't afford to live on their own, because if they lived on their own, they'd pay the rent as well as all the bills. So living in an HMO is far more cost effective. But it's also very profitable for you, because you're getting all that combined rent. And even after paying the bills, you still get much more income than you would on a single property. Now, the one caveat to this question is really important is in most areas, there is an oversupply of HMOs. So you might think, Well, why am I saying you should do HMOs The distinction is we wanted to very high end, what we call co living HMOs. And unfortunately, most HMOs are very average, they've got Magnolia walls and not very good furniture. If you're going to do HMOs, you have to do a very high quality product, which means not only do you attract a better quality tenant who's prepared to pay a bit more, but also those tents will stay for longer. And the distinction I also want to make is it's not just about selling a room in a house, if we create this CO living community, they're buying into a community and we can do things in the property like in the kitchen diner, make sure there's a table big enough for all of the housemates to sit around, make sure there's communal space outside. So sitting space barbecue areas, so you're really trying to create this community and people don't want to leave that community. So HMOs when done correctly, high end is absolutely one thing you should be doing. And then they do stack up they do still make really good cash flow despite the high interest rates despite high energy costs. And then the other strategy is serviced accommodation, where we're renting something very short term For a couple of nights and it could be to contractors could be to holidaymakers or whatever, they're paying a short term rent. So it's much higher rent, now, you don't have it occupied all the time, and the tenancy can go up and down, it's not as stable as HMOs might be. But you can make really good money. And on average, you're aiming for about a 70% occupation rates. And that's what you should be targeting. And you want to make sure it stacks up at least 50% occupancy, otherwise not a good enough deal. And again, those can be very profitable. You get financed on the right now they stack up. So these are the two strategies that work incredibly well, in this current market where money is tight for people. But there's still really good demand for those two strategies. And they both make good money for you.

Christian Rodwell  15:43  

Yeah, absolutely. And I know on previous podcasts, we've talked about another strategy, which is purchase lease options as well. I imagine in a market like this, that would be another good strategy.

Speaker 4  15:53  

Yeah, absolutely. And you know, what, I refer to purchase options as a strategy. But actually, they're not really straight. They're a tool, a purchases option, we'll explain what it is, who aren't sure, it's a tool that you can use in conjunction with any other stress. So if you're doing HMOs, you could do a purchase option to acquire that property essay, if you're doing development commercial, to residential development, if you're doing single, it's still in a bind to that you can use an option. And what it is, basically is it's a tool that we use to control a property that we don't own. So we find someone who wants to sell the property and want to get away from the hassle, the responsibility, the liability of the mortgage, and we step into their shoes, we take away that hassle for them. And we pay them a certain amount each month to kind of guaranteed rent. In the same way, if you had a mortgage, you've got to commit to paying a certain amount each month, the owner, we pay that for them. And the idea is we rent their property out in a more profitable way. So maybe it's already an HMO, but they just weren't managing it very well, that's an empty rooms where we add value and manage it correctly and make sure it's full. Or maybe it's a single, we turn it into an HMO, we turn it into essay, obviously subject to mortgage approval, and planning permission and leases. So we need to make sure we do things correctly. But we basically rent it from all we pay the landlord, so we can make cash flow on an asset that we don't own. And because we don't actually own it, we haven't bought it, we haven't got to put it on a big 25% deposit, we haven't had to get a mortgage, which in the current market, even if it stacks up takes three, four or five months. So this can be done very, very quickly. So we can find the right kind of motivated seller, or within three or four weeks have the legal paperwork done, which we always do through solicitors take on the property and start generating cash flow. So it's great. And certainly back in 2008, when it was very difficult to get finance, you had people who wanted to get rid of the property, the liability we couldn't actually buy, but we could take it on a purchase option, take on the responsibility. And we basically agreed that we're going to look after it for them, we're gonna babysit their mortgage, if they have a mortgage at all. And then it may be sometime in the future, three to five years, we look to buy their property from them. And we fix the price today. And hopefully, although the markets coming down a bit, there's enough time for it to recover. And the future price that it's worth is more than the price we're paying. So we kind of we can actually afford to pay the owner, theoretically, the full market price right now. And sometimes people say, Well, this sounds great for you. But why on earth would an owner agree to this? Well, if they're going to sell a property, maybe worth 200,000. Now realistic in a declining market, they might only get 180 for it, but we can offer them 200. So we can give them the full price they want if they're prepared to wait for when they get the money. And that's the big caveat. This strategy only works for people who want to get rid of a property, but they don't need the money. Now, now most people selling a property they're selling because they want to get the equity, they want to use it to pay off some other debt or maybe invest in a business or pay for their daughter's wedding. So they're selling the property because they want to get the equity, that's the majority of people. But there's a smaller group of people who are just selling because they don't really want the property. So it could be people like landlords who are retiring and we're seeing more and more of those right now, or someone who's inherited the property don't really need the money, they don't want to spend the money doing it up, they just want to get rid of it. So we can take those properties on. So people who don't need the money now we can actually offer them more money than someone else would give them if they're prepared to wait for the money. So that's a big advantage. We take the hassle away. And it can be done in three or four weeks instead of three or four months if they have an actual buyer. And also remember we pay them a small amount each month, maybe that's to cover their mortgage and a little bit of profits. Or maybe there's no mortgages more than they have make if they sold and put the money in the bank. So not only are they getting eventually a higher price for the property than if they sold right now. If you add up the extra income they've had over the three to five years, they're also getting more money there so they can actually get more money from it as well. So if you understand the benefits to the seller, you could find those particular sailors, it can be a real win win for everyone involved.

Christian Rodwell  20:05  

Yeah, yeah. And I guess those are some of the skills that you need to learn, you need to really be able to, you know, position it to the, to the owner, right. So they see those benefits,

Speaker 4  20:13  

you got to get your head around it, first of all, why it's good. And for many people, that doesn't work, you know. And it's a mistake I see people make all the time they learn about this incredibly powerful property investing tool. And they try and use it on every deal. And it's just not going to work on the majority of deals. And they think, Oh, this doesn't work, but they're just not using it, right. So you actually want education to learn how to do this properly is really important, which, by the way, is why I'm sure you know, I'm finally finally about to release my next book, my first book is nose property magic is an Amazon bestseller over 100,000 copies in circulation, my new book, which is lease option, magic, is coming out very, very soon. And I think we're going to put a link in the show notes for people. And what I'm doing is people who buy the book during the launch period, we're going to give them a whole load of extra free online training to complement the book to help build their belief and show them how they can do this. And the book, the book will will tell people what to do. But it's more about raising people's awareness of what exactly can they use these powerful tools for? When are they appropriate? How do they find people who want to do this? And then how do they do their legal paperwork and how they move forward. So I can't teach everything recently enough to get going. And it's really going to help a lot more people understand this, because I don't know about you, you interview a lot of people you speak to a lot of people, I think a lot of people have heard about this tool, but they don't really know how to use it. And they kind of dismiss it. And that's a real shame. Because just like it was back in 2008 2000, is there going to be a far more popular tool to us right now? In the current market conditions?

Christian Rodwell  21:52  

Yeah, that sounds brilliant. If you could share a link, I will absolutely make sure that it's in the show notes. So anyone listening now, click on that and register and lease options. Sometimes I hear people say, Oh, it works in certain parts of the UK, not so much in others. What What's your comment on that?

Speaker 4  22:06  

Definitely. And again, often people who are making these comments don't actually know because they haven't done them. So remember, it's all about the circumstance of the seller, if someone wants to get rid of the property, they don't need the money right now, then that might be an appropriate solution. And we've had people do options literally all over the country, the one thing I will say, you can't actually do them in Scotland. And that's because the Law Society in Scotland, they don't really like them, they think, you know, you could get problems in the future. So we have people who do do something similar in Scotland, but I technically say, Look, if you're in Scotland don't do it. We have a lot of people in Scotland who are doing it south of the border, kind of Newcastle kind of air, etc. So that's the one restriction but yet it works everywhere. We have a lot of people who've picked up options in London, and people think, oh, surely in London, you can easily sell the property, well, maybe not. That's always the case. And you've got to be when you're investing, you got to be very careful about your beliefs about what's possible, and what's not possible, because your beliefs will either propel you forward, or they will hold you back. And sometimes we we have a belief based on our experience and our knowledge. And I'd encourage everyone when you're investing always to challenge and question your beliefs, because they may not be supporting you. Does that make sense? Fisher? Yeah,

Christian Rodwell  23:21  

absolutely. Hear? No, it certainly does. And, you know, I guess there could be two types of people listening to the podcast now, Simon, someone who isn't yet in property, and they're, you know, again, nervous, can you still, you know, reach financial security, financial independence and what, you know, if they pick the right, you know, strategy from the beginning, obviously, sometimes you try things, they don't always work, you have to readjust, but, you know, is there any reason why someone should not progress with property as their main

Speaker 4  23:47  

salutely? Not, I think, I think, you know, property is one of the many ways as everyone listens is there are many ways you can make wealth but, but if you think about it, property is probably one of the most stable and, and safe ways to invest as long as you normally do it. People do lose money sometimes because they don't educate themselves, or they make expensive mistakes that can happen. But if you think about it, if you go to a bank, and ask them to borrow money to invest in shares, that they probably won't want to lend you money to do it, but they will lend you money to invest in property. Why? Because they know it's the safest asset. And you know, it's sometimes people compare the stock market, the kind of returns you get on average to property. So well, stock market goes quicker than property. And yes, it does genuinely. But generally, you don't get leverage in stock market. You can if you're very excited, you can get leverage. But the whole point about properties, you generally use some of your money, but most of other people's money and you can partner with a bank, here's the great thing about property, you can partner with the bank, as long as the deal stacks up and makes money. They'll lend you three quarters the money you put a quarter of the money in 25%. You pay them interest, and then as the value goes up over time, which it does because we live in this island with a limited amount of combination in 1020 years time that project might have doubled doubled again. But guess what, you just have to give the bank their 75% back, and you get to keep all the profit. How cool is that that's how you could work with banks and use their money or their leverage. So absolutely, you can do that, you do need to educate yourself, you do need to pick the right strike, there were certain strategies you don't want to do in a falling market. A common strategy, a lot of people start with a buyer house, they do it up, and they sell it on for a profit profit is called flipping property. That's a great strategy in a rising market, you don't really want to do that in a falling market. Another strategy people do in a rising market is they do Off Plan purchases, that's where you find a developer who's building block of apartments or a number of houses, and you put down a small deposit. And then by the time you come to buy the point, once it's built, because it's not built yet, in a year or two, hopefully the value has gone up over time. Now in a rising market, that's a great strategy in a falling market, you really don't want to be doing that. And actually my points of view, if I can give a couple more tips, if you've got time to do that question, I don't think it's a good idea personally, to buy brand new properties. And they might seem attractive, might think low maintenance, tenants like to live there. And yes, they do like to live there. But it's a bit like when you buy a brand new car, and you drive it off the forecourt, the value kind of comes down a bit, you couldn't sell it the next day for the same amount, because when it's no longer a new car, you've driven it, by like a new building, you buy a building, you got to pay a premium for this nice new building. But as soon as you've got tenants in there, and they've been in there for six months, well, it's no longer a brand new building, someone's been there before. So the value kind of you couldn't sell it for the same amount of money the next month. So So I think you need to recognise that. And if you buy brand new buildings, you're buying at a premium, it's much better to find older secondhand buildings. And by the way, I prefer houses to apartments, because it gives you get better capital growth over time. And I've been doing this a long time I've seen experience, I've got houses or apartments, and I can absolutely tell you had my time again, I would only buy houses now. But it's like London, of course, most things are apartments. But rest of the country, if you can afford a little bit more money and buy a house, that's an older house, and you can add some value to it through refurbishment, you can then refinance it and take some or maybe even all of your money out, you've got the asset, making you money, keeping it long term. And remember, property is a long term thing if you follow my golden rules for my first book property magic, which are very quickly five golden rules number one, we want to buy from motivated sellers. And in this current market, there are more motivated sellers than ever before. So a great time to buy if you know what you're doing. Well, number two, we only bind an area with a strong rental demand. So we know the current tenants leave, we can easily and quickly find other people who want to live in this property. And we've seen a huge boom in rental demand and rental rates going up, you've got a good property and a good area, you should always be able to rent it out. Number three, we must make cash flow, it must stack up. In other words, at the end of the month, after we take the rent less than mortgage insurance, the maintenance management fees, there must be profit leftover. If there isn't, it's not a good deal, we don't want to do that it must put cash in our pocket every single month. Rule number four buying for long term. So we're holding long term, well, number five, we must have a little bit of a cash buffer some money put aside just to cover the things that may not be covered by insurance in case something goes wrong. So we can get the property fixed, get it rented out, again, to make sure it's an asset, putting money into our pocket. So if you follow the five golden rules between particularly number two, three, and four, you know, you can rent it out, you know, you can make cash when you're holding long term. It doesn't matter if you buy something now, and maybe in six to 12 months later, six or 12 months later, it's gone down in value, that doesn't matter. Because we're holding long term we know the value is going to come back. So those are principles that you can use in the declining market we have right now. And even if someone's completely new, you could use strategies such as purchase lease options, where without even having to buy the property put in a deposit and get a mortgage. You can you can see do I like doing rent to rent to buy? Do I like doing sa Do I like doing HMOs and it's a great way to test the market. And you know, if if I, God forbid if I lost everything, and had to start from scratch with the knowledge I have right now, if I was starting completely new, the thing I would learn would be purchased lease options, because they can be used in conjunction with every other stressor rather than working out to I want to do HMOs to ones USA to under single let's just learn options, which is a way of acquiring property without a deposit without a mortgage. And then you could apply that to any strategy you want. That's what I would do if I was starting.

Christian Rodwell  29:45  

Yeah, no, that's good advice, you know, both for the new people and for existing people because people are certainly fearful and those with portfolios now are looking at other ways to maximise those profits. Right

Speaker 4  29:58  

one other thing I Just add here as well, which is establishing point there are a lot of landlords who are selling, some are selling up completely retiring. But you know, I've been a landlord long time myself, every year, I look at my portfolio and I might sell one or two properties that are not doing so well. And I reinvest that money in better property. So I'm not particularly growing my portfolio, but I'm just making it stronger over the years. And so anyone listening to this, who's got properties, and maybe it's a single, it's not such a good rental view anymore. Actually, you can use purchase lease options to sell your property to what we call a tenant buyer. So this is someone who's a tenant at the moment, they'd love to get their foot on the ladder. But they can't do it, particularly right now, with the difficulty of mortgages. Well, as long as you know, they could get a mortgage in the future, they got enough income, or they will have enough income, you could put them in as a tenant buyer for a few years, give them an option to buy. And as a tenant buyer, they put down a little bit of getting started money, three to 5000 pounds, you get a bit of cash up front, and they've got a different mindset to a normal tenant, is there a tenant buyer, it's their home, they might spend money on a new kitchen, because they're adding value to their property, a normal tenant wouldn't do that. A normal tenant, something goes wrong, they call units come and fix it. Well, they've got to fix it because it's like their own hope. So if you've got properties you're struggling with at the moment, you're not got normal tenants, you can see if they want to become a tenant buyer, or even get rid of them put some new people in, find some people who want to get their foot on the ladder, make them a tenant by they get an option to buy the property, they look after the property, you don't have any management fees, you don't have any maintenance costs, they take it on, and he can increase the profitability of existing property for you. And it's a way of selling properties that you don't actually want. And it's helping those people get a foot on the ladder get started. It's a true win win.

Christian Rodwell  31:44  

Yeah, no, I love that. And I imagine there's a lot more tips like that inside the book. So I'll remember it did I remind our remind everyone to definitely click the link to check out the show notes. And again, it just reinforces the importance of having the right like minded people around you being part of a community, your events, Simon, they're back up and running after the pandemic, if someone wants to check out a pen event and find out where the closest one is, where should they go for that?

Speaker 4  32:10  

Yeah, absolutely. So so we have 50 meetings around the country. When COVID came we anticipated we very quickly switched to virtual meetings and continued throughout the those difficult times. And then we've come back and most of the meetings now physical, there are a few that still virtual and actually is not just UK when people listening from around the world. We now have meetings the Netherlands have metres the Middle East as well. So you can go to pin, I'm sure we'll put a link in the show notes, pin And you can come and check it it's I think 20 pounds, it's come to a meeting or something like that 2025 pounds, and come and try but I tell you what, Christian, I think you actually have a voucher code that we can put in the show notes as well. So as a gift from from me and from Christian and from Kevin, if you've never been to a pin meeting before, look in the show notes, go to pin meeting dot cote UK, pick the meeting that's relevant for you scroll down check, you can make the date and then where it says pay, click on Pay with a voucher code, use the code that's in the show notes. And come and check out your first pin meeting as our guests completely free and come see what you've been missing out on because you're getting a community like minded people who when you say you want to replace your income in the next year or two, they're going to say, Oh, great, how can we help rather than what you mad, which is the reaction you might get from family, friends and work colleagues. So you got to get the right people around you particularly in a time when you know there is a lot of uncertainty. And the general public view would be oh my god property, I'm not sure that's a good thing to do. If you listen to the wrong people, you will miss what I believe is one of the best buying opportunities of this decade. So get the right people around you get the right support, get the right knowledge, get out there make the most of this incredible buying opportunity, which might only be here for 12 to 18 months.

Christian Rodwell  33:55  

Yeah, no, Simon, thanks so much. It's always a pleasure to hear your your wisdom over the last 25 years of being an investor. So thank you very much for sharing everything with us today so

Unknown Speaker  34:04  

much, and thanks for asking me.

Christian Rodwell  34:07  

All right, then. So a good few points. I'm sure we can dive further into there, Kevin. Before we do that, let's head over to Trustpilot and read out one of our latest reviews this week. And I'm going to pull out one from Darren who says Kevin Whelan kindly agreed to have a chat with me regarding my personal pensions, and to make sure my trust has been set up correctly. I've picked up some very useful information for the wealth builders podcast, and I hope to improve my knowledge and explore new things and take further action moving forward. Thanks again, Kevin for all of your help.

Speaker 3  34:40  

That's very nice. And then you know what he's also offered to give me a game of golf at the belfry so now it's on record Mr. Blank but anyway, he's he's always reminding me saying when you come in Kevin when you come in, so we have to get out and about and when our wealth builder trail we've got some new events We'll be doing soon, Chris. I don't know whether any of those are worth signposting. But certainly we'll be getting out and about and I've got to get to the Midlands to have a game of golf at the belfry within. So, Ian, thank you so much for for that. And I hope the shout out is worthwhile for you.

Christian Rodwell  35:15  

And yeah, sure. So event wise, we are definitely finalising the next few events, the best place to go if you want to check in see what's coming up is wealth forward slash events. Okay, so onto Simon then. And well, look, the question that we posed was, can you still make money from property? And I think Simon answered, Yes, you definitely can. So whether you're just starting out, or whether you're an existing property investor, you know, perhaps you need to change tact. You need to review your portfolio, he said that that's something he does annually as well. Something any wealth builder would review their assets, right, make sure that things still work, no matter what the pillar is.

Speaker 3  35:52  

Yeah, I think there's a there's a notion spread by, I don't know where it ever came from. It's an odd one. I hear people talk about passive income. You hear it a lot, don't you? You know, oh, yeah, I want to build up a supply of passive income. But the whole point about wealth building is it's never passive. There's always some level of participation you need, whether it's to review how your portfolio is doing, whether it's review, when your interest rates are affected if you're borrowing money. And reviewing the sources of things, because one asset you've got in one place today, is fundamentally different. So the double edged sword of debt, for example, we know that interest rates have gone up. We know that borrowing money is still always available for property, Simon explain. But the underwriting can often be tighter. But people forget this money right under their own noses. You know, they can use their pension as a source of funding in appropriate circumstances. And as always, we give guidance, we don't give advice, and wealth builders, but for many, many hundreds of property minded entrepreneurs within wealth builders, we've helped them see that that pension that they've got, which has been earmarked and parked almost for 2030 years down the line. They can bring that money into play today. So they could build assets today, and acquire assets today that will increase in value these potentially, I'd take on board Simon's view, but the long term Island nature of our country and our love affair with property in the long term property prices go up. And that's certainly been the case. But hey, I said earlier on, you get disruptions, you get disasters, will we have a fundamental property prices go down forever? I don't think that will happen. There's no evidence that will happen. But Will there be a correction or a crash? Well, that always says, you just have to expect it to happen and understand that your flow is interrupted when interest rates go up. And when underwriting is tight, if you're borrowing money, but then you can change your flow by getting funding from from elsewhere. So So I think the creativity is what's needed when in uncertain times. So that creativity comes from understanding all the pillars, understanding all of your assets, being aware of what they are, where they are, what they do. But in addition to that is to be aware of that sometimes new tools are created, a new tools are created. And that's leverage as well as Newquist we know this through wealth dynamics is the leverage of working with other people. And their distinctions you can get leverage from that. But also, it's the leverage of new tools and new technology. And AI is certainly one of those tools. And I think although we didn't mention it, I think Simon is running a bit of a programme soon on how to use AI to help you find the opportunities. Although I know you didn't discuss it in any detail, but we've we've touched on AI many times now and using the technology to help you. So look out for that or we maybe we can even signpost that quiz, but but just a tool of lease options. For example, purchase lease options, is about control of an asset. You don't necessarily at least at this point, have to buy the asset and therefore spend your money borrow money at high interest rates, you can control the asset and that can be very powerful at a time when the circumstances to your finances or are not suitable. In other words, you can keep going even though your finances tell you ordinarily you couldn't. So that distinction of lease options and really calls into question In the micro position where you know, the world is affected, but some landlords want to sell. Some landlords don't need the money right now. We've definitely seen that happen in businesses, we've seen business owners who want to retire. But they don't necessarily need the money. Right now, because they've done well over the years, they want that business to carry on, like, talking to someone about schools, you know, private schools, they just want the schools to carry on, you know, the less concerned about the money. And similarly, it's the case, I've seen that with Bed and Breakfast, there are some Bed and Breakfast owners who are kind of retiring. But they want, they don't want this to go into residential, they, they want it to be maintained, you know, they love their area, but they're just too tired. So you have to look at that in an ageing demographic and see, well, where will those disturbed, disrupted people come from. And disruptions are happening every day, to almost everyone, we all go through life being disrupted by something, whether it's a health problem, a job problem, a finance problem, or whatever problem. And how people deal with that is critical. And I think the wealth building skill is to ethically solve the problems of others, never to take advantage. But those opportunities are always there, if you can arrive at a true win win. And I've seen Simon try and do that and teach that. And I applaud him for doing that. And I think he's always coming to our table, and others with enthusiasm, and a desire to help people do a better job for themselves and create wealth for themselves. So, you know, I think there was some good lessons in there for sure.

Christian Rodwell  41:50  

Absolutely. And, as was mentioned, you know, education always being that first step, it certainly is the first step in our wheel of wealth, which we show our members and help them to understand process to generate capital or cash flow from any asset, any strategy. And education comes in lots of different forums, you know, listening to this podcast, joining a Facebook group reading a book, you know, you don't always have to pay for education. But sometimes people choose to take that step. And, you know, very grateful for Simon for offering the opportunity to, to download and get that copy of his book, when that's released very shortly.

Speaker 3  42:24  

Well, absolutely. Because normally you find publications are creatures of their time, you know, so when I wrote save a fortune that was 2004, you know, for, if I, if I did an overlay of the interest rate examples and stuff I did, then they'd be not relevant today. So it's good if there's a tool that's really fresh. So definitely look into the Book, because that's giving you a tool that's available right now that you can use today isn't something like The Richest Man in Babylon, which is principles based and written 100 years ago, it's something you can use right now, not that I'm against principles, I'm fundamentally for principles. But the other thing, I think, is hugely relevant, Chris, and I think Simon touched on it, but didn't dwell on it, which is, you touched on the idea of the pin meetings, for example. Now, other meetings are available. And that's not for us to say, but the pin meeting is an example where people are going to a venue or on a zoom. So in a room or on a zoom, where their purpose is to share, connect, and to build a community. And I think that's hugely powerful in in, in uncertain times, because everybody's going through the same thoughts, and then how they deal with it gives you those distinctions. So whether you join the pin community, and it's great that there's a offer, if you've never been before to go, free of charge, and thank you to that to Simon for that game. But similarly, we'll be inviting parents who want to be great money, role models for their children to join a community of parents. So you're not left to your own devices. Goodness means toughen up being a parent, right? I'm not trying to teach parenting. But I would say we can teach through case studies and community, what other people are doing that are really influencing for the positive. their children's lives in a in a world where we're always looking to build our assets. And in the end, you think about this one, Chris. In the end, if you build assets sustainably, they will outlive you. So you've got to think about how you're going to pass those assets on. Now, some people who've got children, that's fine. You deal with that legacy in the most positive way. Give wisdom In an encouragement to children not to be entitled, so that they can take those assets in a form of stewardship and build them for future generations, or philanthropically? Yeah. Who do you want to leave your money to? And how are you going to make sure you deal with that? So these are all parts of the decision making around wealth building. But the starting point, I guess, for most people is to get to the place where they build their wealth. And right now, so many people are sitting on the fence hesitating, waiting for something to happen to them. And my answer is, it's not going to happen to you. Disruptions happen to you, positive things, generally don't just happen. You've got to make them happen by taking that response. ability.

Christian Rodwell  45:51  

Very well set once again. And if you're not already connected to either ourselves or to Simon, then hit the link on the show notes. And certainly join the wealth builds community, it consumes some of our free resources through our website, go and find out what others are doing and get connected. And yeah, we'd love to see you at future events, as Kevin just mentioned, as we certainly push on with the mission to help the families you know, from cradle to grave.

Speaker 3  46:17  

Yeah. Well, thank you very much, Chris, for the having a very good interview with Simon today. And yeah, 20 What did he say? 20 years a landlord 20 years teaching it nearly as long as me so. Listen to Sage people, every now and again. You know, we're not gurus. But we are, I suppose guides and guidance is given free. So hopefully, you know, we've given a distinction or two today that will help somebody become a wealth builder instead of a fence sitter.

Christian Rodwell  46:50  

Yeah, maybe help a few more. If you enjoyed this episode. If you think someone else you know might also enjoy it, please hit the share button, send it to them as a little gift and help us build the community and spread the message as far and wide as we can. So thanks for listening today. As always, we'll be back Same time, same place next week.

Unknown Speaker  47:09  

Yes, we will. And until then my friend so yeah.

Speaker 1  47:14  

We hope you enjoy today's episode. Don't forget that we are constantly updating our resources inside a wealth builders membership site to help you create, build and protect your wealth. Head over to wealth right now for free access. That's wealth

Episode summary

In this episode, we dive deep into the dynamic world of property investment with property entrepreneur, author, investor and mentor, Simon Zutshi.

Join us as we explore the ever-evolving landscape of property and answer the burning question on every investor's mind: "Can you still make money from property?"

With years of experience and a keen eye for market trends, Simon Zutshi guides us through the intricate pathways of property investment. Simon unpacks the strategies and mindsets that can lead to profitable ventures, even in uncertain times.

Tune in as we unravel the secrets to success in property investment and gain valuable insights from an industry expert. Discover how to identify opportunities in the ever-changing property market, leverage creative financing techniques, and harness the power of networking.

Whether you're a seasoned investor or just stepping into the realm of property, If you're curious about the potential of property investment in today's world, this episode is a must-listen.

Resources mentioned in this episode