“This book is about much more than just successful property investing. I hope that in addition to learning from some of my best successes and biggest mistakes, you will also take away a new approach to your business and personal life. My goal is that by acting on the ideas in this book, you will be able to BE more, DO more, HAVE more and GIVE more in life. I sincerely wish you the very best of success for the future.” ~ Steve Bolton
In Successful Property Investing, Steve Bolton shares the seven mistakes made by novice property investors. His book can be useful for any person who is new to investing, money management and personal development. Having made his first million aged 30, Bolton guides the reader through the mistakes that either he or others around him made when starting out in property.
The Seven Deadly Sins…(in property investing!)
The book is structured around the following seven most common mistakes:
- – Not Protecting Your Downside
- – Not Having an Effective Property Investment Strategy
- – Believing what you Hear, Read and See in the Media!
- – Not Operating with Integrity
- – Not Maximizing the Potential of Leverage
- – Not Investing in your Own Personal and Professional Development
- – Having a Bad Case of ‘Analysis Paralysis’
BE more – DO more – HAVE more – GIVE more
The tagline of the book and a theme that Bolton refers to are almost his personal pillars that he encourages others to embrace:BE more – DO more – HAVE more – GIVE more
Bolton begins by outlining why the reader wants to do this – goal setting is key. He then aims to convince the reader that property is the right vehicle for investment (but is careful to encourage the reader to do his or her own research before singling out property as the right vehicle). I’d agree and would always encourage you diversify your research – talk to people, read lots of books and stay up to date with the best blogs.
Moving on from the what and why of investing, Bolton then poses a question of time commitment and emphasises that unless you’re willing to do less of one of your activities (he uses television as an apt example) and commitat least ten hours per weekto property investment you will never be successful.
He places a great value on time early on and refers to Sarah Beeny’s “Property Ladder” show as a prime example of how even top property investors can forget to place a value on the time they spend on property management. Beeny’s show namely forgets to factor in opportunity/interest cost of money used in property for the deposit, refurbishment and fees. She also fails to factor in the time invested by the so-called ‘investors’ doing the work.
With a spoonful of faith, Bolton briefly touches on how property is a business and that the reader must consider the number of businesses that fail providing a common statistic that 90% of businesses fail within the first two years primarily due to a lack of adequate cashflow.
The latter pillars,HAVE moreand GIVE more fade away as the former is implied early on and the latter referred to at the end of the book where Bolton announces that all profits from the book go to charity.
Three Factors That Impact on a Buy-To-Let Portfolio
Bolton lists three major external factors that impact on a buy-to-let property investor’s portfolio and business:
- Interest rate rises pushing up monthly mortgage payments.
- A property market crash taking away the option of remortgaging or selling for a profit.
- Void periods, where the units are un-tenanted and there’s little or no rent coming in.
Although Bolton posits that high cashflow comes from Houses in Multiple Occupation (HMOs) that you manage as a hands-on landlord this is where his advice diverges from my desire to have passive income (where my time or location are irrelevant to how much money I make – I want to have my properties managed by an estate agent even if they take 13% of the rent each month for their work on my behalf). Bolton provides one of the few calculations present in the book (much to my disappointment) by explaining that a house in multiple occupation (with five or six tenants) can generate a £1250 profit every month (or £15k per annum). To help those who wish to be a hands on landlord like Bolton it’s worthwhile exploring the pages where he lists every aspect of property management, albeit in little detail (Chapter 3). I’ll admit that the list is long enough to make any novice investor’s stomach turn…
Your Property Investment Strategy
Your property investment strategy (he lists neither his own nor others in the book) should consider the following:
- Ensuring leveraged income exceeds your monthly expenses
- Ensuring you have multiple streams of income
- You are able to recycle your capital
- Minimising your tax liabilities
- Your exit strategy/ies
Each of the above can be summarised with further details below:
- Use your own capital first and aim to recycle as much as possible by refinancing after six months
- Choose a good accountant who has experience with property investors
- Know where you want to be, when and how you’re going to achieve the results in that time-frame
Ignore the Media
Similar to other investment writers, Bolton strongly argues that to be successful you need to be able to tune out any investment news that the media provides. He explains that, “the media always represents the worst-case scenario, based on sweeping generalisations.”
Contrary to what the media are saying, bad economies provide ample opportunity for you to purchase a property below market value.
A short section is devoted to having integrity in all of your business dealings and Bolton includes the oft-mentioned “Your network is your net worth”. The theme here of building strong relationships by offering your time and skills plays into Bolton’s fourth pillar for successful property investing, GIVE more.
Bolton ends on a strong note around ‘Analysis Paralysis’ where he argues that now is the time for action and that the “only bad time to buy property” is later. A somewhat valid point which is unfortunately does not support his entire book. There is no way that any investor can make £50,000 to £150,000 in two to five years from reading this book alone – which makes the title misleading.
The greatest frustration when reading this book is that Steve manages to completely avoid providing tangible advice on how to make £50,000 to £100,000 in two to five years. This would ordinarily not pose a huge problem had it not be stated in the title and therefore suggested the reader could act upon the advice in this book. A better-suited title would be – Get in the Mindset to be a Better Businessman – but understandably this is unlikely to sell as a well as a title that promises a certain amount of income in a short (relatively) space of time. There are a lot of thoughts on how to conduct business in a better way by thinking in a certain way but there is very little in the way of tangible actions. The book avoids providing any guidance to someone further along in the personal finance management who might be in need of detailed advice. One clear argument throughout the book (which Bolton builds a case for until he provides a convincing example of one of his clients, who by 40 is working full-time in property management) is that real success in property investing is not possible without becoming a client of Platinum Property Partners (the firm he owns). Unfortunately, this blatant self-promotion made it difficult to take much of the content seriously. Overall, I’d say it’s worth scanning this book – especially for those who wish to be hands on as a landlord.