In this blog I am going to share with you one of my property investing tips that will make you a more successful investor. So one of my favourite sayings is you don't know what you don't know. I've been investing in property since 1995. I've been pretty successful. I've also made lots of mistakes. I recognise it's far wiser to learn from other people's mistakes rather than making them yourself. This is why specialist property knowledge is so important. Having an open mind, recognising you don't know everything is a really smart thing to do. You can always learn from other people.
I sometimes meet investors who've been investing for 10, 20 years, and they've been really successful. They've had a particular strategy. They've just done that one thing and they've been successful. But because of that, they think they know everything about investing without further successful property knowledge. That's a very dangerous place to be. You will always learn from other people who have got different experience . Maybe you can integrate some of the things they know into what you do.
Keep an Eye on Changes in Legislation
Wherever I go away, I like to connect around the world with people I know. A friend of mine is a Real Estate Agent in New York. He sells property in Manhattan, Brooklyn, in Queens and in the Bronx. He doesn't sell individual apartments, instead he sells entire apartment blocks.
In Manhattan you are surrounded by apartment blocks. These usually go for typically anywhere between 5 and 100 million dollars. That's not the kind of size property that I would generally buy. But I thought this guy has got to know something that I don't know - that I can use. We were chatting and it turns out they have protected tenancies on some properties in New York.
“We were chatting and it turns out they have protected tenancies on some properties in New York.”
I think this is interesting because there's talk that if the Labour Party get into the UK government, one of the things they might introduce is protective tenancy. I was curious how it worked in New York. What it means is the local council designates some properties as a protected tenancy so the landlord cannot charge whatever they want. They can't charge the free market open rent. They have to charge a restricted rent. They can also only increase that by a certain amount each year. As the rent is capped, it means that the value of the property is also less than it would be if it was a free rent - where they could charge whatever they want due to market prices. So if you buy properties that have restricted rental income, the value of those is less.
Consider Alternative strategies
There was a strategy for this until literally a month ago. They've stopped it recently but this used to work for many years. You could actually buy a block that's got some restricted tenancies in them. When those tenants move out, you basically spend money renovating the property. If you renovate it to the extent that you increase the rent over, I think it was $2,700 per month, then that's outside of the protected tenancy rental range. It's no longer a restricted property, it's a free property.
Over time you can convert these properties from restricted to free rental, which I said has a massive increase in the value of the apartment block. This is a way of having forced appreciation. There are things that you can do to your properties to increase the value much quicker than if you're just waiting for the market to go up.
You can do things like you can extend into the attic and add an extra bedroom or two. You can sometimes convert garages into bedrooms. You can move a kitchen into a living room and turn what was a kitchen into a bedroom. There are lots of things you can do to cause forced appreciation. But I thought this was just a very neat strategy you could use in New York.
The point is I didn't know about it. I guess most investors don't know about it. It comes down to specialist knowledge. And if you want to be more successful in property or in life in general, you need to have specialist knowledge.
“This is an example of because I had specialist knowledge, I had some skills and knowledge that other people didn’t have.”
Leverage your own experiences
When I was a kid, one of my hobbies was magic. I got given a Paul Daniels' magic trick for my birthday when I was seven, I absolutely loved it. I started to collect Paul Daniels' tricks. My dad who was a GP, his business partner was also an amateur magician. He told us about a magic shop in London called Davenports. I used to save up my pocket money and every year, to go to this magic shop and buy some magic tricks.
At this particular shop called Davenports, they started a club for young magicians. I would go along there and I would learn a magic trick from a professional magician every week. I got better and better because I was learning from other people rather than just learning myself. We used to do a big Christmas show each year and I would learn from them in terms of their presentation style and the jokes they'd use. I became a much better magician by learning from those people. I became so good that actually I started to do children's parties.
When I was 15, 16, I'd do a 40-minute magic show. This is back in the mid to late '80s, and I'd get paid like £20 for a 40-minute magic show. This is while some of my friends were starting work. They would work in the local news agents and get paid £15 for an entire Saturday to work there. This is an example of because I had specialist knowledge, I had some skills and knowledge that other people didn't have.
Being able to apply that, I was able to earn a lot higher money because of those specialist skills.
Find people who Have done this before you
The great news for you is if you want to be a successful property investor, you can find people who are more successful than you who've done this before you. You can learn from them. There are many ways of gaining specialist property knowledge in the UK. Learn by reading books, by listening to podcast, or by watching some of my videos.
But one of the best ways to learn is attending events. You can go to an event, a training event by someone who's done what you want to do. If they've become very good at teaching that and they've got lots of successful students, you can learn a huge amount in a condensed amount of time. You can get specialist knowledge, learn things that other people don't know which then gives you a competitive advantage. So my friend in New York, who sells these blocks, had a real competitive advantage because he had specialist knowledge that other people didn't have.
So I'd encourage you to always have an open mind. Recognise you don't know what you don't know. I'm always learning after over 20 years of investing in property, I learn from my students, I learn from other people. I bet that's one of the reasons that I've become even more successful. Invest in yourself, make sure you keep up-to-date, and keep on building your property knowledge.
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