PropertyInvesting.net: Property Investment News

More objective guidance and insights for property investors. Our aim is to help you improve your investment returns, flag key risk areas and stimulate strategic thought so you can position your portfolio to maximize gain, for our five thousand website visitors a day and the thousands of people signed up to your Newsletter. This Newsletter cover two key topics:

1. Best Focus on Property Investing and Not Brexit
2. Health Means Wealth - importance of staying healthy in mind and body

Brexit Distraction: Property investors should really consider Brexit as a massive distraction, regardless of how they voted. The strategy should be – whilst the rest of the population is spending many hours a week debating and reading news on Brexit, the property investor should be working hard on investment plans, strategies and actioning to increase their personal-individual wealth and that of their families. Just calculate how much time you spend considering the wider implications of Brexit versus the wider implications of your property investment portfolio and actions around your properties – the lower the ratio the better. The more time spent on property actions, and less on Brexit and politics the better. There is far too much politics going on – and its healthy to let them get on with it whilst you get on with running your investments. Don’t lame a bad investment on Brexit or show victim tendencies – its better to stay positive and focus on creating wealth.

Building Levels: Because of the so called “Brexit worries and uncertainties” – many builders are going slow just to mitigate the risk of financially over-extending - if a recession is on the horizon. Building levels are probably running at around 130,000 homes a year – however at least 250,000 and up to 350,000 homes are required each year to keep pace with demand – reference to the growing population and continued high levels of inward migration. This is particularly true pf London and SE England – anywhere within 60 miles of London – plus places like Bristol and Cambridge. This will of course lead to an even greater housing crisis – with property prices rising and rents also rising, also because of the recent draconian taxes on Landlords – the government both taxing property losses and adding an 3% stamp duty to new purchases.

Split Properties: For the seasoned property investors with large portfolios – a good strategy with these housing pressures is to split up large properties into many individual flats, especially in London. In areas of dense population in southern England, many people settle for a one bedroom flat – and high returns can be made converting large houses in up and coming areas into flats – particularly if you have a loft and basement to convert and the house can be extended out the back. There are less wealthy people with large families and more single and couples with no kids or one kids – all keen to get onto the housing ladder. One bedroom starter home spilt from large houses is normally a good strategy – particularly in in southern England in cities is all but the most expensive family orientated areas.

Trend Projection: Investment starts “in the mind”. It’s an idea, based on a trend – preferably a “growth trend”. When we look back at the last 70 years of property investment in the UK, many inner city areas firstly declined from the loss of heavy industry and increased crime – then many started coming up with the advent of high-tech – light industries, services sector growth and improvements in communications – rail, tube, bus, roads. Increasing employment and lower crime rates helped of course – and started “gentrification”. The trick for property investors is to look back, consider the present then look forward to try and predict which areas will improve further – become even more popular.

Heavy Industry and Globalization: We would advocate that heavy industry and manufacturing is never going to come back in the UK because of Globalization - lots of low cost places around the world that produce things cheaper than the UK. The Sterling decline and Brexit may give a temporary boost, but longer term – these industries are in decline, some in terminal rapid decline. This started in the 1960s or WWII– in part because Britain lost it’s economic “empire”. This is why we would not invest in Aberdeen (oil-gas production-development decline), Barrow-in-Furness (shipyard decline), or Middlesbrough (chemicals decline). Instead it will be more of the same – an ever increasing financial services and other related services sector growth – particularly post 2020 after Brexit negotiations are finalised and the UK gets onto an even keel. These services feeding off the rest of the world – with their centre being London. There should be some manufacturing growth in places like Derby (Toyota, Rolls Royce) and Sunderland (Nissan) – albeit these are still risky ventures and house prices would be impacted negatively if these large companies ever slowed investment or pulled out altogether. It’s best not have your property investment growth reliant on Nissan and the Japanese making decisions tens of thousands of miles away.

Boom Areas: If you look at places like Stratford in Manchester – the level of property price increase has been massive – but we think it will continue because of Media-BBC and technology companies moving in. Northern hipsters are moving in – a trends that started 15 years ago. Similarly – Exeter used to be a backwater – but after the Met Office moved in – prices went ballistic. Because of the housing shortage and Exeter being such a lovely place near the sea to live and fairly close to London by train, we think prices will continue to rise sharply – list more middle class people moving in from London over the next 20 years. Bath is another example – with new electric trains are due to take 15 mins off the train trip to London – making it faster to get to London than Brighton to London by late 2018. Any property along the Crossrail route will prices rising sharply also when this train line opens 2018-2019.
Oxford and Cambridge are other great places – where rich foreigners come to send their kids to the top schools and universities in London and SE England – expect prices to continue rising on a strong trend as the Tories stay in power for at least another 5 years (barring a catastrophic performance before the snap Election 8 June). The highly educated people from Oxford and Cambridge often stay in the city and start businesses or commute to London from this area – we see prices rising further. Winchester is another hot-spot.

London: Finally on London – no-one would have dreamt that Stratford, Whitechapel and Hackney house prices would have gone up 1000% in 30 years. Can this continue? We actually think it will – because of global inflation and money printing plus the increasing desire of foreign wealthy business people to settle their families in these places. The schools will improve, shopping, restaurants, cafes etc and crime rates continue to decline – and these previously desolate deprived areas will continue to increase in price above trend in the UK as more “Shoreditch hipsters” and techies move in – then start families and spend their money in the area. One could buy a flat in Stratford for £25,000 in 1990. 27 years later – a one bedroom flat cost £340,000. But don’t be surprized if such a flat cost around £650,000 in about ten years time. Places like Whitechapel will start having prices looking like prime London by around 2035. Crossrail, the Olympics, City of London growth and new technology ventures with a massive housing shortage and massively growing population will all drive prices far higher in Shoreditch and Whitechapel.
Investing Close to Home: However, this may not be for most people because its generally best to invest close to home – for the following reasons:

• If letting agents and/or tenants know you live locally, they are more likely to act promptly on things, pay their rent on time and are less likely to mess your around
• You have more direct control over your investments
• You are close by in event of an emergency
• You can get better deals with contractors locally
• You can wait and seize on opportunities – by monitoring locally and snapping up bargains
• Your local knowledge of business, areas, where jobs are being creating and where areas are improving is often helpful in selecting the best investment property
• You can do handyman, DIY and other work yourself on your property to save money – for instance cleaning and decorating
• You might be able to find tenants yourself and let the property out directly – therefore saving on letting fees

Depressed Area: The problem with investing locally could be that you live in a depressed area where property prices are declining and unemployment is rising, so in such an instance, it would be advisable to look further afield. Another disadvantage about having local properties and tenants is – you might not want the tenants to easily be able to contact you, or knock on your door. Having tenants complaining on your doorstep would of course be a highly stressful incident for most landlords. You may even feel threatened by some types of tenants being so close by.

Best in Boom Town: If you live in a booming city like London, Oxford, Cambridge or Salford-Manchester - you can of course capitalise on high demand, high yields and high capital value increases. Re-development opportunities for large properties in such areas are exceptional – for instance you might be able to convert a 3 bedroomed terrace house with an unconverted loft and basement – into a property with four flats/studios – and achieve exceedingly high rents – a very lucrative opportunity.

How Can I Add Value: As a property investor, wherever you go – you need to constantly ask yourself the question – “what can I do to add value”. For instance, building a garage might cost £15,000 but add £30,000 in value and hence have a return on investment of 100% - you double your money. But building a conservatory might cost £15,000 and only add £8,000 to the value of your property – this destroys a massive £7,000 whilst being a risky building venture.

Loft Conversion A loft conversion, particularly in London – is normally a winner with regard to value creation. It might cost around £40,000 and add £80,000 in value – and if you rent the loft out as a studio in London, it might rent for £750 a month, particularly if it has a separate WC and shower, plus small kitchenette area.

Basement Conversion: Converting a basement in most areas in northern England is likely to destroy value – it might cost £80,000 and add £70,000 in value. However, in West London – converting a basement might cost £110,000 but the flat would be worth around £340,000 once completed – and hence you would almost triple your money on the initial investment.

Self-Build: Building a home from scratch can be an extremely lucrative project, but there are many pitfalls not least getting planning permission, then dealing with building controls, and successfully building the property to the desired and regulatory standards. Most mortgage companies will not lend on self-build properties – so if you have cash, it can be a successful way of making big returns, but it will take time, is high risk, and be a huge effort – even if you are just the overall project manager. Finding a suitable piece of building land, then getting planning permission with all the Nimbys complaining is the first big step. Then it’s the design, tendering, selecting a builder who you can trust, then having the home successfully built on budget is a giant risk. But if all these things come together – you can double your money in about 12 months from start to finish, if you have time and can successfully manage the whole process. In southern England, if you buy a building plot for say £80,000 then manage to build a 3 bedroom home for £130,000 – its likely to be worth around £380,000 – after other costs you might have made around £160,000 on paper.

Investment Criteria: Now just a few ideas about UK areas that are good to invest in. Firstly, a few criteria you can use to assess an area:
• New businesses and jobs moving in
• Gentrification and regeneration taking place
• Good schools – both state and public/private – improving trend
• Close proximity to Universities
• New infra-structure being built – rail, road, tube, buses, trams, cycle lanes
• New shops-retail
• New arts/cultural or tourist attractions
• Good area for holiday homes or second homes
• Shortage of homes being built
• Good rental demand
• Increasing populations
• No noise/pollution from airports – quiet side streets
• Reducing crime levels
• Private sector – finance and/or technology jobs

Hotspots: Some areas that tick all the boxes are fast regenerating areas like Shoreditch, Forest Gate and Hackney in London. Other areas are those to be positively impacted from Crossrail such as: Whitechapel-Shoreditch, Acton, Abbey Wood, Ealing, Paddington, Tottenham Court Rd, West Drayton, Maidenhead, Reading, Forest Gate and Stratford. We particularly like Shoreditch because of the booming high-tech start-up businesses that will prosper and grow in years to come – with rich young families moving in. A real growth hub.

Population Boom: Areas with booming populations are Stratford, Forest Gate, Bow and Canning Town – plus Oxford and Cambridge. In the latter two cities, building cannot keep pace with demand. Bristol is another boom area, along with Bath. There is a shortage of rental properties in Southampton whilst property prices are quite reasonable – worth considering.

Dyson Hullavington: On the new jobs front – one of the best areas has got to be Hullavington in Wiltshire where James Dyson is investing a gigantic £2.5 billion in his technology company – by converting the old airfield close to this village just north of the M4, between Bath and Swindon, and on the edge of the beautiful Cotswolds. Lots of new high paid jobs – are bound to send the property prices skyrocketing – and rental demand from professionals will of course be very high in the next few years, along with demand from builders. Has to be a winner!

Brexit Distraction: Finally, just a quick word on Brexit. You may have noticed that property prices have hardly been affected by Brexit. There are a few reasons for this. Firstly Brexit uncertainties are keeping interest rates low. Then Sterling crashed by 20% which means foreign investors are still snapping up properties. The Brexit uncertainties have also curtailed building – levels of building are dropping. Then high stamp duty and taxes are preventing people from moving, so there is a dearth of properties on the market. Far from the house price crash predicted by Osbourne, prices have motored on quite nicely. The property declines in West London set in before the Referendum because of the gigantic punitive stamp duty increases – which will of course lead to lower tax returns as levels of prime home sales drop dramatically. Another failed tax policy with unintended but highly predictable consequences. Longer term, the -13% decline in Chelsea property prices should actually be seen as an opportunity, in five years time we believe they will be far higher again.

UK to Boom in 2½ Years Time: Whilst everyone is worrying about Brexit and Trump – all the canny property investors are busy doing conversions, seeking out bargains, adding value and generally making money. So this is our steer – be action focussed, go out and make money and don’t worry too much about Brexit. It’s more of a distraction – politics in play – than anything else. We are pretty sure that in 3 years time, once this divorce is finalised, the UK economy unshackled from its unelected socio-liberal European neocon elite – will start performing like Singapore, Switzerland and Norway, possibly as a re-defined tax haven – rather than stagnating like Italy, Greece, France and Spain. Those people voted Brexit – so we better get used to the idea – and drive forward with pride – and look forward to re-establishing old friendships with the commonwealth countries plus every other country on this planet that we have not been able to conduct a trade deal with – because of the EU. It’s also rather delusional to think that the result of a second referendum would be any different to the first – if anything it would be more clear cut. Best be positive about it!

2. Health Means Wealth

Health and Wealth: Every once in a while, being analytical and scientific thinkers, we like to give advice on health, simply because “without health there is no wealth”. There are very few examples of people with severe health issues – like mental health, disability or terminal deceases/illness that go on to make millions. The top priority is safety and health, with the money following this foundation of life. If you want to destroy your wealth, then hard drinking, drugs, heavy smoking, over-eating, having accidents and getting no exercise are all good ways to start.

Insights: What we are going to describe is some exceptional insights we have on health – that we are frankly too busy making money out of property to concentrate on developing and proving beyond scientific doubt, but we thought we should advise all our readers, because it might help you live a long and wealthy life. This is our objective and it’s probably yours as well, otherwise you would not be reading this Special Report. Almost all people desire a long healthy and wealthy life.

Data Quantity: Scientific studies and correlations are progressing at an astonishing pace, partly because of the sheer quantity of new data on people’s health – accessible to academic and medical institutions. When we look across all these data – there are some key insights we would like to pull out that could alter your daily habits and improve longevity and wealth.

Muscles: It is our believe based on many recent studies that the key to longevity is “muscles” – the comparative muscle mass versus fat. The larger your muscles compared to your fat (or flab) the better. The leaner and/or larger your muscles are and the less flab you have is key. We believe the key reasons for this – and we can’t prove these yet – they are hypothesis – are that:

• Muscles process and burn deadly cancer forming chemicals day and night – during exercise and after, also during sleep
• Muscles burn sugar and fat that cancer feeds on
• Muscles give the body strength – in the limbs, chest, stomach and heart – that aids blood circulation – as the heart pumps fast during muscle exercise, it flushes the circulationary system vessel of artery clogging substances
• Muscles means an older person is able to stay active for longer, exercising and hence process out the environmental toxins that we consume and absorb in our 2017s lifestyle
• Muscles and exercise also create Endorphins that give an uplifting positive and exhilarating feeling after during and after taking exercise.

Dangers of Muscle Deterioration: As the body gets older, of course the key is to retain muscle mass – try and delay the withering of muscles and strength that inflict all elderly people – indeed any man over 30 years old in a gradual sense. For example, take a look at the size of muscles in a man of 75 years old versus 25 years old and you will see what we mean. Note in women, around 45% of strength is lost around the time of menopause.

Older People Put On Weight Normally Because Muscles Deteriorate: As people get older, there metabolism drops in large part because there muscles reduce in size – and if one eats exactly the same amount of food and calories, then obviously the excess calories will always be stored as fat – and lead to being overweight then eventually obese. The trick for aging people – which is everyone – is to keep exercising, developing muscles as best possible and reducing calorie intake to match the likely reduction in your muscle mass. If you build muscles, you will of course be able to eat more and stay slim at the same time – because when you are relaxing and asleep – the muscle will burn off the flab.

Risks to Developing Your Muscles: The obvious risks to this strategy of keep your muscles large and your fat levels low are – in getting exercise, you injure yourself – bones, ligaments or muscles – either by pulling them or having an accident. Stating the obvious, you need to avoid having accidents – play it safe – don’t take unnecessary risks when exercising. Avoid extreme sports. Avoid skiing.

Cycling: Interestingly a recent study from a group of medics in Glasgow studied 250,000 commuters and found that people that cycled to work – on average 30 miles a week – had almost half the incidence of death through heart decease, heart attacks or cancer, when normalised for smoking, weight etc, compared to people that drive to work. This fits our hypothesis that people with large lean muscles – remember the largest muscles on the body are the thigh and butt muscles that get developed from cycling – people that are leaner – have almost half the incidence of cancer and heart decease. The chance of getting killed on a bicycle in 2015 was around 17 times higher per mile than driving by car, but interestingly slightly less than walking (as a pedestrian by mile). It’s still three times safer than driving a motorcycle. You just need to be very careful and aware of danger areas.

Safe Cycling: You can of course reduce the chance of getting killed on a bicycle by designing a route that goes through parks, cycle paths and quiet roads if you are worried about an accident. You will need to be very careful as well. Cycling to work – the study quite rightly pointed out – is a routine and becomes part of daily life – so it takes the “dreaded” out of the equation – you just need to be discipline and keep to the routine. It’s just a mode of transport. If you can continue cycling regardless of the weather or season – this is of course far preferred. This is easier than trying to build going to a gym or swimming pool into your routine – because there will always be a hundred reasons why you can skip it the gym – after work drinks, invited to lunch, not feeling so well, feeling tired, or more exciting things to do. When cycling, to reduce risks – wear a crash helmet, hi-visibility gear, lots of flashing lights in the dark etc and cycle defensively – don’t jump lights.

Saving Money and Routine: The other positive thing about cycling – apart from saving money commuting and being part of a good steady routine – is that its good on the joints unlike running and jogging. You are far more likely to preserve your joints, far less likely to pull a muscle or twist an ankle or wear our your cartilage in your knees or hips. A healthy compromise though is cycling to work and back every day, with some jogging at the weekend – to develop a slightly different muscle set through running. Walking will also help building muscle mass. If you can’t run or job, then walk – it’s a good substitute.
Upper Muscle Strength and Mass: Regarding upper body strength and muscles. Some 2-3 kg bell weights, stretches and any chance to get on a rowing machine will develop and tone up these muscles – which are very important. Also, if your upper body muscle tone, mass and definition get well developed – it will do you no end of good from a “feel good about yourself” factor – regardless of whether you are a man or woman. Having toned abs and a good body profile should boost your self-confidence. You will be able to wear body hugging cloths that show off your figure.

Weight Gain – Getting Fat: Regarding weight – or people getting flabby – the only really sustainable way of losing weight and flab/fat – is by developing muscles. The best way of building muscles is by walking, running, cycling, rowing, swimming and going down the gym and pumping weights. If you worry about your weight and getting fat or flabby – its crystal clear in our minds – you need to focus on building muscle then your fat will evaporate away. The more muscle you build – the more your fat will vanish – it’s as simple as that. The reason is – muscle burns energy (or fat) whilst fat stores energy (sugar is converted to fat only if it’s not burnt by muscle (including the heart, and to a lesser extent some other organs like the brain). You can try going on diets – but the most effect way of losing weight is developing muscle – period. You just won’t read many books describing this – because they are all trying to sell diets and food. If you want to lose weight – you need to get active – and in doing so your muscle mass will increase then you will burn the fat – “simples”.

Aging Process: As you get older – and you follow this advice – or these tenets – then you will notice that:
• Your peers around you will be getting rounded, flabby, out of shape and looking a lot older than you – you will stay lean, with young body profile
• You will have more energy and a more positive younger outlook on life
• You will be able to handle more stress
• Your increase in positive mental and physical energy will allow you do more and better property deals – and gain-retain wealth
• You will have a far higher chance of living longer and avoid the twin major risks of heart decease and/or cancer.

Diet: We have written extensively about food-diet before, and we won’t go into much detail here, but the key is to:
• Avoid refined sugar
• Avoid drinking too much alcohol (it’s also a type of sugar)
• Try and stop smoking
• Avoid illegal drugs of any kind (its destroys motivation and leads to mental illness)
• Avoid eating too much wheat and carbohydrates
• Eat loads of vegetables, fruit and nuts
• Eat plenty of lean meat and fish
• Avoid eating too many acidic foods like refined sugar, fizzy drinks etc
• Drink alkaline water – for instance pH 7.5-8.3 non fizzy mineral water (or tap water in SE England and other hard water areas – e.g. areas with limestone/chalk bedrock-aquifers)
• Take a multi-vitamin tablet each day, plus vitamin D

It’s our belief that acidic diets lead to cancer and the furring up of arteries – cancer feeds off sugar and acidic rancid fat – so if you keep your body in a neutral-alkaline state you will risk mitigate against cancer and heart decease.

Vitamin D - Critical: Just a word on vitamin D – it’s absolutely essential and one reason why we think the Scot’s life expectancy is so low compared with people in southern England. There is very little sunlight in Scotland for 6 months a year. Vitamin D is more like a special hormone – essential for good health. It take 3 months to build-up Vitamin D levels in your body from sunlight (if you don’t take tablets) and 3 months for these levels to drop off again– so the most deficient period in Scotland is end March each year. The winter mortality rate is also high during this period – Jan-March. There isn’t a direct correlation of course, but what were are hypothesizing is that “peak health risk” and “peak depression” is March each year in Scotland and northern countries – before the Vitamin D levels start to slowly increase in the body. People in southern England get far more sunshine especially in the autumn and spring – so this deficiency is far less. So if you live in Scotland or any area which sees little sun like Ireland, Wales and northern England, you really have to take Vitamin D – it could be a life saver – especially in the winter. For Scots, even late April your Vitamin D levels will still be very depleted – still a risky time of the year – until they have built to the highest levels around end August – after those long summer nights and albeit of relatively weak sun.

In summary – build muscle and steer towards a healthy alkaline diet – and you will be on for a winner.
We hope this articles has given you some interesting insights into health – and will get you thinking about the value of “muscles”.

Overall, we hope this two part Newsletter has helped frame some ideas for your property investment portfolio – given some insights. If you have an queries, please contact us by email at enquiries@propertyinvesting.net .