20th March, 2013 BACK TO ALL PODCASTS

Welcome to the first ever “The Property Podcast” brought to you by Rob Bence and Rob Dix. Each week will discuss all things property cutting through the bull to give you straight forward property investment advice.

In this episode you will learn

  • A website all newbie investors should check out
  • The first book all property investors should read.
  • 7 ways Property Investment can change your life.
  • Who your hosts are!

Links Mentioned

RMP Property (Rob Bence’s Company)

Mortified Cow (Rob Dix’s Company)

The Property Geek (Rob D’s other podcast)

Property Tribes

Richest Man in Babylon



Speaker 1: Welcome to The Property Podcast, the home of news and debate about building long-term wealth from property investment for beginners and experts alike. And now for your hosts! They may not be as cool as me, but they do know their property, its Rob and Rob!
Rob B: Welcome to the Property Podcast, the new podcast for property investors, new or experienced. This podcast is for everybody who has an interest in property investments. Today I’m joined by my co-host, Rob Dix.
Rob D: Hello!
Rob B: Rob, good to have you today.
Rob D: Thanks very much, good to be here!
Rob B: Rob, before I start, you better explain where you are today because we’re not together.
Rob D: We are not. I am in Ao Nang in Southern Thailand at the moment where it is about thirty five degrees outside. But I wouldn’t feel too jealous because I’ve been stuck inside trying to find a plumber to sort out a blocked bath all afternoon. So yes, same problem, different location. But yeah, I’m a long way from London at the moment.
Rob B: Yeah, well. I am in London. We’re not quite at the same temperature and it’s a bit grey outside, but I’m not jealous whatsoever.
Rob D: Good to hear.
Rob B: We’ll explain in a bit why you are where you are. But let’s go and see what we’ve got coming up in this episode. We’ve got a brief introduction to ourselves. Don’t worry, we’re not going to do this every week, this is not to serve our egos, it’s just to let you know who you’re listening to and why you’re listening to it. We’re going to have a look at what’s in the news and what’s caught our attention this week. We’re going to cover our main topic, which is ‘Why Property Can Change Your Life for the Better’, so we’re going to have a look at that. And we’re also going to offer you our resource of the week; something that we feel will be able to benefit you as a property investor.
Now, I think it’s important to point out to you that this podcast is going to be on-going and we’d really, really love your support. One of the ways you can do that is through iTunes. Now this is through, available through the iTunes store, its free to download. But if you can give us five-star reviews, it will really help this podcast gain momentum and we’d really, really appreciate it. So if you could go to the iTunes store, go to podcast section and look for The Property Podcast and leave a review, we’d be really, really grateful. And of course, anybody who’s kind enough to give us a review we’ll read out in our future episodes.
Rob D: And it’s particularly important at the moment ‘because we want to hit the ‘new and note-worthy’ section, which will give us more exposure on iTunes. And I think we’ve got six weeks from when the podcast start, so the clock is ticking. So reviews now really count.
Rob B: Yeah. That’s a really good point; really appreciate your support because this podcast is for property investors, happy to give our time every week. So let’s get news information out there. Let’s get the support, and in the first six weeks, if we can get in the ‘new and note-worthy’ section, that’s going to be a massive, massive help. So we’d really appreciate it.
Rob D: Alright. So should we start with talking about ourselves?
Rob B: Yeah! This is one of my favourite subjects. So I’m Rob Bence. To make things easy, we’re both called Rob. I’m Rob Bence; I’ve got the slightly Northern accent, as you may have already picked up. And Rob’s a little more refined from myself. I run a property company called “RMP Property”. That’s rmpproperty.com. It’s a property company for new investors or people with experience who really want to get back on track with their property investment or get started. We look at where they’re at and where they’re trying to get to, and help them put a plan together. And then we’ll find properties that match their needs. I’m also a property investor. So I’ve been in property investment for seven years and I’ve also worked in property investment industry for the last eight years. So, I’ve seen a lot, I’ve been through the credit crunch which was fun. So I’ve been there during the booms, I’ve been there during the blow up and I’ve sort of come up on the other side. So it’s been an interesting eight years.
On the side of that, when I’m not doing all things property, I’m a bit of an adventure junkie, so from mountain climbing to marathon running, you name it, I’m interested if it’s seems my heart rate’s going to get up a little and it’s going to get the adrenalin going. So, that’s myself. Rob, do you want to get a bit of background so maybe explain why you’re halfway across the world.
Rob D: Yeah, will do. So, I’m a property investor in London and Liverpool. And I blog about property at propertygeek.net where I’ve also got my own podcast, property geek podcast where we did the first series last year and it will be starting the next one soon. I’m also working on a book about property investors, so all very geeky indeed on the subject of property just ‘because it’s something that’s fascinated me long before I got involved myself.
And that geekery crosses over into my day job as well, which is running a web design in copywriting business called ‘Mortified Cow’. I run that with my wife and as you mentioned well, we travel around a lot, because we’ve got the kind of jobs where really, as long we’ve got an internet connection we can work, we figured we might as well take advantage of that. So for the last year or so, we’ve been working while we travel around the world. And bizarrely, we don’t have a home of our own at the moment, despite having to sell houses and so we have to arrange short-term lets when we’re back in London, which is weird. And pros and cons of being on the move so much and we might talk about property investing from a distance in another episode maybe, ‘cause it’s always an interesting subject.
Rob B: Definitely.
Rob D: But, on the whole it’s a lot of fun.
Rob B: It definitely sounds so. I know I’m probably not the going to be the only one who gets occasionally jealous when we talk about where you are and what you do. You should definitely check out some of Rob’s websites because not only it’s a great content, they look fantastic! Okay, so let’s have a look at what’s caught our attention this week, Rob, in the many we saw. In this case, a website called ‘Property Tribes’. Now before we jump in to the story and why it’s caught our attention, if you’re new to property investment, one of the first websites that you need to get yourself on to other than our own is propertytribes.com. It’s a great community full of experienced and newbie investors who are sharing the knowledge for free. A great website, some interesting topics going on there, well worth a look and have a bit of a dig into some of the contents and see what they’ve got for you.
Rob D: Definitely. I think the main thing about Property Tribes is its very supportive, but it’s not moderated with a heavy hand, but it kind of self-moderates. So you’re not going to find anyone trying to sell you dodgy deals or anyone trying to give out dodgy information. It’s a place where you can ask questions as a newbie but also as someone more experienced, you can always pick up something new. It’s a site that I log on to everyday.
Rob B: Definitely, I must agree. It’s nice not to see, which you do see on some of the websites, the hard sell not happening.
Rob D: Yep.
Rob B: So as soon as someone new to property posts in there, they’re not suddenly attacked by twenty different people trying to sell their killer products. That is a good point. Okay. The blog we’ve picked out today is by ‘to let morally wrong’? Do you want to pick this up, Rob and talk about why you were interested in this one?
Rob D: Yeah. It’s one of those topics where it’s easy to kind of look at it and go, ‘It’s a housing crisis, lots of people are forced to rent and there are all these people who own tens or hundreds of houses. This is wrong; they’re keeping everything to themselves.’ But the reality I think we all know is a lot more complex than that. And I think Kevin Wright made a really interesting point on the thread, which is, if there are residential buyers on the market, they’ve got a double advantage over investors because they can get a higher loan-to value and they’ll be willing to pay a higher price normally. So they’ve got a different set of incentives from somebody buying as an investment. So it’s not like greedy investors are hovering up all the houses, it’s just that investors are the only people who are in a position to buy at the moment. And once they’ve bought they provide a service, they provide somewhere for people to live. As long as they do it properly, there’s nothing wrong with that.
Rob B: Yeah. And I think as long as people do it properly, that’s the key point there. People are going to expect us two to pick the side that we carve. Of course they are, but I think Vanessa, in the first original post, she makes a few points. But, I think it really hits the nail on the head, where are all the people who rent privately going to live if there are no landlords? People offer a service and it’s a good service then you should feel proud of what you do, because you’re helping people meet one of their basic needs which is shelter. So if you’re a good landlord and you offer them good property and you’re fair, then you’re actually, you should be proud of what you’re doing ‘cause you’re helping people out. Just like a business owner should be proud when they employ people because they’re giving people jobs. It’s the same as investing, you should be proud that you’re giving people a good place to live. Read the article, it’s really good. It goes on, a lot of contribution there and we’ll link to it in the show notes as well so you can find it, obviously, which is thepropertypodcast.com. So if you go to thepropertypodcast.com, there’ll be show notes there including this blog post on Property Tribes.
Okay, let’s get on to our topic of the week. The topic of the week is “Why Property Investment Can Change Your Life.” Now it’s a pretty big title for our first episode but I think it’s important because so many subjects we’re going to cover for the coming weeks, but let’s have a look at the main reasons why we’re even here in the first place. Why are we doing property investment? Yes, it can be fun; people enjoy investment and so on. But actually, this bigger reasons and that’s what we’re going to look at. So Rob, do you want to take us through the first point that you put down.
Rob D: Yeah. Well’ we tried to break this down into different areas, haven’t we? And the first one that obviously springs to mind is that it can give you financial freedom. And the definition of financial freedom that I think is in ‘Rich Dad, Poor Dad’ which is a book that a lot of property investors made a big difference to their lives when they first started is that its a point at which your monthly passive income exceeds the amount of money you need to live each month. So if you’ve the point where you’re renting out some properties and the rental profits after expenses is more than you need for your own family to live on and maybe you’ve got your properties fully managed as well, then that’s freedom. You’ve got as much money coming in as you need and you’re free to have a lot of time to do whatever you want to do. And even if you’re managing three big HMOs on your own, you can still do that in less than a forty-hour work week. So once you got to that point, you just have to systemize what you do, get someone else to do, and then get on with what you want to be doing. And obviously, it’s easier said than done, but I would argue that you can become financially free with property faster than you can with any other type of investment, assuming that you take a sensible level of risk.
Rob B: Yeah, absolutely. I mean, I think if you ask most people why they go into property, they may use different terms, but ultimately, the majority of people are going to mention financial freedom. So, it’s definitely why that’s point number one.
Rob D: Yeah.
Rob B: Point number two sort of follows on from that. Not only can you set yourself up and give yourself choices and financial freedom, but number two is set future generations up because you can leave a legacy by building a portfolio. Now, most pensions, if that’s your choice of future savings, once you die, that’s it, it ends if you’ve bought annuity. But, by investing property, you can pass on financial for future generations and give you peace of mind that you’re not just setting something for yourself up, but you’re helping out whoever, maybe a direct descendant: sons, daughters or nieces and nephews, whoever. You’re doing something that’s not selfish. You’re helping other people, you’re helping future generations. And if you’re wise you can educate them on what you’ve done, so not only can they benefit from what you’ve done but expand on it. So that’s another great benefit from investing property and how it can change your life.
Rob D: Definitely. I was talking to investor for my book recently and he’s going to be point now where he’s talking about, he’s thinking about succession planning, he called it, and ways for figuring out not just the most tax-efficient way of passing things on, which is something I’m sure you know a lot more than I do. But also, making them realise the benefit of it so they don’t just inherit all these stuff and immediately sell it off ‘cause they don’t know what to do.
Rob B: Yeah.
Rob D: It is a great way of setting up your family for generations to come, definitely. Okay. The next point is that you can get better returns than the banks. That’s obviously not a difficult thing to do at the moment, but I think the reason why you always get a better return than the bank is because of leverage. Most of the time, you’re going to be using a mortgage for say, sixty – seventy-five per cent of the purchase price. So that means even if you net yield is only say, four – five per cent then you’d hope it would be higher. But if it was that, then your actual return on cash invested is going to be higher because you borrowed a lot of the money you used to buy the property. And there aren’t many other asset classes where you’re going to get people lending you money so you can multiply your returns in that way. But even if you don’t take on a mortgage, most of the time you’re still going to be getting a better return than you would by just keeping it in the bank or under your mattress.
Rob B: Definitely! And I think return on investments or ROI; it’s a big point there. It’s something we’ll probably discuss at a future podcast because being able to calculate ROI doesn’t just allow you to assess different properties, but also property against all your investments so it’s definitely something we’ll come back to.
Okay, shorter life time changes. So we still got the long-term financial future for yourself, for your property, but shorter term you can also benefit as well. Now these aren’t such radical changes. But because property in this market can give you really good returns and really good cash flow little things can happen if you chose them, you don’t have to. But for some people, it may be that the extra cash flow they’re generating in the short term might allow them to hire a cleaner, or go away on short weekend breaks or go out to eat a little more regularly than they used to. This is not to say that you should throw away all your profits and never re-invest them, but it’s also something worthwhile taking on to say that you enjoy your work as well. Maybe re-invest the majority of the money you’re making from your property, but if you’re finding yourself spending six hours a week cleaning your home, then a cleaner might actually make quite a big difference to your life. I know it sounds silly, but actually that’s the first step in making these lifestyle changes because it’s valuing your time and saying, ‘Okay, I’m actually making this from my property. I can save those six hours by paying a cleaner to clean once a week and that’s going to make a big difference to my life!’ Back up some free time for you then all the better! It’s one small example, but property can make changes in your life, pretty early on. Yes, well off and big money comes further down the line but short-term you can have some benefits, too.
Rob D: Yeah! It’s a great point. I think we can easily get caught up in the big picture and forget that you know, you need to see some of the fruit of your labour along the way ‘cause that’s what’s going to give you the motivation to keep going and realize, ‘Oh I’m on to a good thing here’. And you can use that, like in your example of freeing up some of your time to produce more wealth for yourself, then all the better.
Then the next point is that as well as helping yourself, you can help others through your property investment by being a good landlord. That’s something that we touched on earlier when we talked about you have to property like a business, you can’t just look at the number. You have to look at the people, as well. I gather you’ll get a kick at providing a service. I love it when I speak to my tenants and they say.. They tell me stories about their friends who have been trying for three months to get their shower fixed and stuff like that, or the heating doesn’t work. They sort of realize how lucky they are that they’re not in that situation. I really enjoy it. It’s just a case of treating other people as you want to be treated yourself. And my view that for everyone who’s in one of my properties, that’s someone who’s not going to have to have the pain and the hassle of dealing with a landlord who doesn’t care about them and doesn’t do their job properly. So it’s a wider good as well as a personal good.
Rob B: Yeah, and I think what people are going to find out as these episodes go on, we both have a slightly different approach to how we manage our properties. So I think it’s going to make for some interesting talks and topics. I won’t go into too much now, but I think the common ground that we’ve got is that being a good landlord is important. Now, whether you’re more hands on or hands off, even if you take the hands off approach, you still make sure you look after your tenants by making any fixes needed to doing quickly, charging a fair rent and just general good behaviour. I think again, that’s another topic to maybe debate on and talk about in a future episode, something that will make interesting listening.
So how can property change your life? Well actually, it gives you business experience. Now, a lot people I talk to on a daily basis are business owners already who invest on property and if they’re not, a lot of people actually say they would like to. Now property investment is a sign, a way of learning business discipline. The last thing you should be doing when you go into property is just buying blind and hoping it will work out. You should be putting plans together like you would a business, set up targets like you would a business and then operating your property like a business again. It doesn’t mean you have to be working forty – fifty hours a week on your property investment, far from it, you set up systems. And this is all experience you’ll learn from running a successful property portfolio. And by gaining that experience, if you then wanted to move on and start a business, then you’ve got the ideal foundation and knowledge from running your property portfolio. There’s so many lessons you can learn and we’ll all talk about them in the coming weeks, but the business experience you learn and should implement as well, business disciplines, since your portfolio is huge. So I think as what we’ve talked about, it’s a big plus point.
Rob D: We’re going to talk about it; we’re going to bore everyone silly with our love of systems and everything else. That’s going to come through in future episodes, I’m sure.
Rob B: Yeah, we’ll give you plenty of that about systems, its coming up so you can give yourself a free week. What else have you got for us, Rob?
Rob D: Okay. Point number seven is that you get to meet like-minded individuals and that’s something that I haven’t really thought about before I got started in property. But then I got so interested in the people involved in property, I’ve started writing a book about it. People who invest in property tend to be very interesting people because they’ve done something that most people will never do. Despite all their mates apart telling them the horror stories about the things that will go wrong when you try and invest in property, they’ve done their research, they’ve taken a risk and they’re reaping rewards for doing something a bit different. Also, I think people in property tend to very success-minded that they’re looking for reasons why and not reasons why not and because of that maybe, they’re positive and they’ve very generous with their knowledge.
Now on the social side, you could easily fill your entire calendar with networking events and you could spend all day on twitter and all the Facebook group and they’re people I’m pretty sure do spend all day on twitter and the Facebook groups. Even if all you do is make a couple of friends who you have coffee with every month and talk about property and business and life, you’re guaranteed to have some interesting conversations. And a lot of the time, you might officially have nothing in common with these people and meet people you’ve never come into contact with otherwise, but because you’ve got a similar outlook on life and what you’re trying to achieve, you’re guaranteed to find it interesting.
Rob B: A prime example is we found each other, it probably sounds like a dating website, we’ve met each other through property investment. If we didn’t have that common ground initially, then this podcast wouldn’t have taken off. It’s such as an important point that meeting like-minded people, because property at the very beginning, as you’ve explained to me, if you’ve start on it down the pub, nine times out of ten people are going to think you’re crazy, you know? You’re a bit weird and out there, so by finding people who have those same belief systems as yourself, it’s something that makes you feel a lot better and gives you more confidence to go forward. It’s definitely a big, big plus in property investment.
Last one! And we’ve put this last because often people will talk about this first and make it sound a lot easier than it is. But we’ve it last because it’s not as easy as people make out and that does create huge wealth. You can make a lot of money from property, but this is not garage-quick. I’m sorry if people are tuning in to this podcast hoping that we’ll give you quick ‘get-rich-quick’ secrets ‘cause if we knew then we’ll just be implementing them every day. Property can be ‘get-rich-slowly’ and huge wealth can be made through property investment if you’re prepared to take that long-term view. And we’ll talk about some strategies that you can implement in the coming weeks, but it is possible. Although normally people talk about the wealth and riches you can make through your property as the first thing the first thing they’ll ever talk about. Yes, it is possible but we put it last because it sort of comes at the end, there’s lots that come before it. So it’s possible, but it takes time, it takes effort and putting systems and plans in place as well.
Rob D: Yeah. You said earlier that you’ve been doing pre-crash and through the crunch and still doing it now. I’ve got a bit of a different perspective ‘cause I bought my own house in 2006, I think it was, but I didn’t start buying for investment until come out of the other side and all the loopholes we’re using in a ‘get-rich-quick’ kind of way had been closed up. I never really saw that side of it. For me, it’s always been ‘Oh you know what, do all this now and I’ll make a little bit of money every month, and then eventually everything will be great. But it seems like that’s kind of how things always used to be and how things are now, but there’s this weird period on the middle where you could kind of really do bonkers things really quickly. I think of the people who are trying to tell you, you can get rich now are still trying to flag the ideas that worked for a couple of years back in the mid-2000’s but now those do not apply anymore.
Rob B: Yeah, that’s such a good point. You see it on the internet, glad to say it’s less, but unfortunately its still there. People do tell property’s a get-rich-quick mechanism. Now, if these people knew how to get rich quick through property, why not implement it themselves? Why are they selling you the knowledge? If it’s that easy to make money really quickly through your property and suddenly become a millionaire overnight, then just keep making your millions overnight. You don’t need to sell me £2000 clause. It sounds really obvious, but so many people go on them. They’re also very good at marketing.
Rob D: That’s a whole episode in itself, at least.
Rob B: Yeah. You can see the passion in my voice coming through there. It’s something that I definitely got a few opinions on. So that’s our topic of the week, Why Property Investment Can Change Your Life. I hope you find that useful. We’re going to expand on a lot of those points over time. But if there’s anything in particular you’d like us to cover, we’d love to hear from you! Jump on the website, there’s few ways you can leave us feedback. Go to thepropertypodcast.com, jump in there, leave us your feedback, any questions or anything you’d like to cover in future weeks, please do let us know!
Let’s have a look at our resource of the week. That’s our resource of the week. This week we’re starting with a book. We’re going to recommend a book to you that you should read. When we were putting together notes for the show, I gave Rob the title of this book and he hadn’t actually read it. It’s called “The Richest Man In Babylon”.
Rob D: Yeah. “Rich Dad, Poor Dad” and “The Richest Man in Babylon” are always the two books that seem to come up when people talk about what kind of gave them the inspiration to start out in property. I’ve never gotten around to reading it, so I’m hoping you can tell me now where I should go and order on Amazon straight away.
Rob B: Well, first reason is, it’s a quick read. “The Richest Man in Babylon” I think actually, should be the first book people buy if they haven’t gotten into property investment even though it doesn’t talk about property at all.
Now, “Rich Dad, Poor Dad” is fantastic, many people refer to it as the property bible and so many people talk about how it’s change their life. And that’s fine, it’s a great book and I’m sure that we’ll recommend it in the weeks to come and even talk about it. But, “The Richest Man In Babylon” talks about financial discipline and it’s a great book because it’s a story of parables based on Babylonian times years gone by and it’s really well put-together. It’s a quick read and makes a lot of sense when you go through it. But the reason why I like it is its all common sense, the principles that are given in the book, but sometimes because they’re so simple, we overlook them. So it’s about saving, the most effective ways to save, how to create wealth, so many nuggets of gold throughout the book. Actually, if you read it, there’ll be nothing in there that don’t know already, but sometimes you just need to be told it again. And when you read it, because it’s put together so well that I think you’ll get a lot of value from it. It’s a book I always recommend to our investors who contact me and the team here.
We always talk about “The Richest Man in Babylon” and “Rich Dad, Poor Dad”. But if you’re completely new to property, we always tell them about this one first because it’s about learning those disciplines because if you don’t have financial discipline, then they could fail in property.
Rob D: Yeah, it’s funny, isn’t it? The books that have the biggest impact on me are often the ones that don’t tell me anything new at all. They just tell me stuff that I already knew deep down but I just never thought about in that way before. That often makes far more an impact than books that are full of real hand-on stuff and technical detail. So I can totally see why that would be a great place to start and get the right mindset. If you get the mindset right, then it makes everything else a hell of a lot easier.
Rob B: Definitely. That’s the genius of the author. He took some really simple principles and put them together in a way that can make and create a lot of impact. It’s a great book. If you haven’t read it yet and you’re new to property investment, go buy “The Richest Man in Babylon”, we’ll link to it in the show notes. It’s a cheap book to buy; quick read and I think it will offer you a lot of value. So go read that book.
Okay! I think that’s it today, Rob! We’re close to covering everything we wanted to talk over today. How’ve you found it? You’ll be back next week?
Rob D: I think I’m literally going back. I’m going to be back with you in London next week. I feel like yeah, in the course of doing this we’ve come up with about ten other topics that we want to talk about in more detail. We have to reign ourselves a little bit. So there’s plenty more episodes where this came from, I reckon.
Rob B: Perfect, agreed! Thank you for listening. We’ll just ask once again, if you’ve enjoyed this and you’d like more episodes to come out, we’re really happy to put them out. We just need your support. So if you can go on iTunes, leave a review, we’ll read them out in the weeks to come. We appreciate your support so we won’t let it go unnoticed. Have a look, let’s try and get the ‘new and noteworthy’ section of iTunes. Also, jump on the website, The Property Podcast, and leave any questions or comments you have. If you want to subscribe to the podcast, you can do so through the website, too.
Thank you so much for listening to our first podcast. We hope it’s the first of many!
Rob D: Hope so! We’ll see you next week!
Rob B: See you! Thanks, Rob!
Rob D: Bye!
Speaker 1: Thank you for listening to The Property Podcast! Don’t forget to check out the show notes and join the mailing list at thepropertypodcast.com.