This week we talked about risk and reward. You’re obviously taking on some level of risk by investing in property rather than keeping your money under a mattress, but how do you calculate the risk/reward balance that suits you and find an investment approach that matches?
We talked about the notion of risk and reward with particular reference to:
- LHA tenants
- HMO strategies
- Off-plan property (also see episode 33)
- “Normal” buy-to-let (and why there isn’t actually any such thing)
We concluded that the key is to find the right point for you in the risk/reward/time triangle – and also consider the relative risks that you’re happy to take on. Everyone has their prejudices and irrational fears, so to minimise your sleepless nights you should take that into consideration when setting your property strategy.
Resource of the week
We recommended what we’re calling the Dan Andrews Productivity Procedure, in honour of the host of the Tropical MBA Podcast who we heard about this from.
So next time you’ve got a huge list of things to get done, partner up with someone else and:
- Say what you’re going to get done in the next 15 minutes, and set a timer
- Work intensively on just that one thing for 15 minutes
- At the end, spend 5 minutes telling each other what you actually got done and what you’re going to do in the next 15
- Repeat until one or both of you loses your grip on sanity
Rob B also suggested the 30/30 App as a good way of tracking the time on each task.
We tried it last week, and it’s incredible what you can get done in just 15 minutes when you eliminate all distractions and feel accountable because you said you’d achieve a certain outcome.
Give it a try and let us know how you get on!
This week’s news
Our story this week was that one of the UK’s biggest private landlords is evicting all his housing benefit tenants. In terms of our episode theme, he weighed up the risk and reward and decided that it would be more favourable to him to take only professional tenants from now on.
Apparently only one in five landlords will now consider renting to tenants who claim LHA, and the uncertainty around Universal Credit certainly isn’t helping.
Mentions this week
Rob D’s new book became available for pre-order today!
It’s called “Beyond The Bricks”, and it’s a series of longform interviews with successful property investors who have each reached financial freedom in a very different way. The stories are fascinating in their own right, and they’re also packed with insights that you can use in your own property business
Tell us what you thought of the show!
What type of risk are you most worried about?
How do you decide what level of reward is appropriate for the risks you take on?
Let us know in the comments!
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