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I’m sure you hear it alot, but what is a home-run business? And as a corporate employee, why should you start a home-run business? And how can you do it?

Basically a home-run business means choosing your own working hours and working on projects of your choosing.

  • Starting a home-run business can be a great way for corporate employees to take control of their career and financial future. Here are a few reasons why:
  • Financial independence: Starting a business allows you to be in control of your own income, rather than relying on a salary from an employer. This can lead to a greater sense of financial security and freedom.
  • Career satisfaction: Many corporate employees feel stuck in their current roles and may not see opportunities for advancement. Starting a business allows you to pursue your passions and interests, and can lead to a greater sense of fulfillment and satisfaction in your work.
  • Flexibility: A home-run business allows you to set your own schedule and work from the comfort of your own home. This can be especially beneficial for those with family or other responsibilities that make it difficult to commit to a traditional 9-to-5 schedule.
  • Innovation: As a business owner, you have the freedom to innovate and create new products or services. This can be especially rewarding for those who feel stifled by corporate bureaucracy and lack of autonomy.
  • Low startup costs: Starting a home-run business can be relatively inexpensive, especially compared to opening a brick-and-mortar store or office. This can make it a great option for those who want to start their own business but don’t have a lot of capital to invest.

This is unlike employment or your job where you have to work fixed hours and are doing work given to you – like it or not. 

You can work for yourself through the following ways;

  1. Freelancing – where you sell your skills and provide a ‘tangible’ outcome.
  2. Coaching – where you share knowledge or experiences in how to achieve a goal.
  3. Ecommerce – where you sell physical products online on Amazon or eBay for example.
  4. Affiliate marketing – where you sell other company’s products online as a referrer and earn a commission. Perfect for you if you don’t have your own product at this stage.

I firmly believe you should work for yourself for the following reasons;

#1 – High costs of living

With cost of goods and services rapidly increasing, we’re seeing that wages are not going up by the same rate unfortunately. It therefore makes it harder and harder to afford your current lifestyle – unless you have additional sources of income. This is why having your own business can provide a level of security that your job can’t. 

#2 – Uncapped income

Linked to the above, it’s so important to create multiple sources of income to secure your financial future. The best thing about starting an online business is that you can leverage existing systems and platforms, and scale up your income. That means the amount you can earn online is really up to you. £1000 a month, £10,000, £100,000 a month? There’s no limit.

#3 – Choose when you work

Sometimes life just takes priority. And this means that your work needs to take a back-step. This is why having your own business allows you to set your own hours – without having to explain to a boss or employer!

#4 – Leave a legacy

What do you want to leave for your kids or future generations? This might be skills, money or maybe you want to be known for something. I believe that you should teach your kids to become financially independent and pursue entrepreneurship where they can. Of course, being in a job is NOT a bad thing. It’s a noble pursuit. But – if you value freedom and independence, then owning a business is the best choice for you and your family.

The one thing that helped me launch my online businesses was the principle of ‘Authority Marketing’.

What is Authority Marketing?

Authority Marketing is a cutting-edge strategy enabling you to join the modern wealthy and make more money in less time, buy working smarter – not harder. It ends with you working for yourself, and not for anyone else. You can start a home-based business using the principle of authority marketing.

It’s about embracing today’s digital world by leveraging the power of online marketing systems to automate selling any product or service to any target audience anywhere in the world.

Basically…

Step 1 – Identify Profitable Niche

Step 2 – Pinpoint your Audience

Step 3 – Understand what they want

Step 4 – Create your Brand & Message

Step 5 – Launch Marketing System

Step 6 – Promote Offer and make money

Authority Marketing enables you to generate leads and sales online, 24/7, 365 days a year without ever having to chase or convince anyone – or spend your time posting all day on social media.

It even works when you’re not!

Expert affiliate marketing training for beginners

The Benefits of an Authority Marketing System?

  • Work from anywhere
  • Work when you choose
  • Answer to nobody
  • Total time freedom
  • Earn uncapped income

So, time to join the Modern Wealthy. Click here now to learn more about Authority Marketing and how it help you make the transition from frustrated employee to a more present-living Online Entrepreneur, EVEN if you don’t have your own product or niche idea at this stage.

Overall, starting a home-run business can be a great way for corporate employees to gain control of their career and financial future. It offers many benefits, such as financial independence, career satisfaction, flexibility, and the opportunity to innovate. However, it’s important to be aware of the risks and challenges involved and to make an informed decision before taking the leap.

The other day I was talking to a friend of mine Sean. And he said he was interested in starting his own online business – but the biggest thing holding him back was being so busy and lacking time.

Sean needed a way out of the corporate job but couldn’t find the time to start something online.

He is probably right in that his work, family, commute and other commitments take up most of his time in the week, and little time he has left is to unwind and relax.

But then I asked him – why did he really want to build an online business? He said the main reason was so he could finally leave his corporate job and create more time for himself and his family.

Fair enough. Sean’s ‘why’ for starting an online business was clear in his mind.

Then I told him it was exactly the same for me. I really wanted to start an online business but felt that I didn’t have time to go through the steps of building an online business. But the ironic thing is that – in order to achieve the dream of ‘time freedom’, we have to commit time now to the process.

If I can carve out 1 hour each evening to build my online business – I will be 1 step closer to my dream

What this means is – you have to sacrifice certain things in your day in order to build your business. You have to take the first step and say ‘ok i know I have limited time, but if I can carve out 1 hour each evening’ to build my online business – I will one step closer to my dream. (Not sure how – check out this article),

This is what I did when I started my online business training in February 2019. My thinking was – I really want to change my circumstances, and become a free man. In order to do this I’ll work every evening 9.30-11pm once I’ve done everything i need to do at home.

No TV.

It is a sacrifice, yes. But remember – nothing worthwhile comes easy.

So what I said to Sean was if you really, really want to change your life – then naturally you will do whatever is required to make it happen.

I then showed him the same online business training that I went through and just asked him to;

  1. Commit a time slot to his education and implementation of the skills learnt every evening, and;
  2. Follow the process taught – step by step.
  3. Reach out to me or the community if you are stuck (it happens).

So – if you find that a lack of time is holding you back from building a business, ask yourself how bad do you really want a business?

For me it was a no-brainer. Find time and commit to it 🙂

Expert affiliate marketing training for beginners

Creating an online income alongside your corporate job can be a great way to build financial security, gain skills, and achieve a better work-life balance. With the rise of the gig economy and the increasing number of remote work opportunities, it’s now easier than ever to create an additional source of income. That’s without considering the increased cost of living that we all face!

However, it’s important to remember that creating an online income takes time, effort, and dedication. Here are some strategies that can help you build a sustainable online business while working your corporate job.

  1. Freelancing: Offer your skills, such as writing, graphic design, or programming, as a freelancer on platforms like Upwork, Fiverr, or Freelancer. To be honest, these days you don’t even need to have your own skills. With the advance of AI (artificial technology), there are now more tools than ever that allow you to do things like; website creation, content creation, translating a language, copywriting, video editing, etc. It’s more more easy than ever and you can do these things at low cost. ChatGPT is great (and free) example of a hot AI tool that allows you to create content or get advise by simply requesting it! You advertise your services on freelancer platforms like Fiverr, and get the AI tools to do the hard work 🙂
  2. Online tutoring or teaching: Share your knowledge and expertise in a particular subject through online tutoring or teaching on platforms like VIPKid or iTalki.
  3. Selling products online: Start an online store and sell products on platforms like Amazon, Etsy, or Shopify.
  4. Affiliate marketing: Partner with brands and promote their products to your audience, earning a commission on sales made through your unique referral link. Affiliate marketing is a great way to earn an income around your job – especially if you don’t have your own product or service. You simply leverage an existing company’s products and go out and market that product. The company may even provide the marketing assets for you. On top of that, the company will deal with customer enquiries, refunds, fulfilment, etc, so you don’t have to! I am currently an affiliate marketer for four brands and it was my first online business while working in my 9-to-5 corporate job. When it comes to affiliate marketing, you really want to market a product you have used before and would happily recommend it to others. If you want help getting started with your own affiliate business – check out the same training that I used as a beginner.
  5. Dropshipping: Start a dropshipping business by selling products through an online store without having to hold inventory. Again, another fantastic online income source that leverages internet platforms like Amazon and its millions of customers. Before spending thousands on committing to a product – you should follow guidance on how to effectively build your ecommerce drop-shipping business.
  6. Blogging or content creation: Build an audience and monetize your blog or YouTube channel through advertising, sponsored content, or affiliate marketing. Again, ChatGPT can really help with this! But while ChatGPT (and other AI tools) can give you a start – you should definitely tailor the content to make it your own style.
  7. Podcasting: Start a podcast and monetize it through advertising, sponsorships, or affiliate marketing.
  8. Investing in stocks or cryptocurrencies: Invest your money into stocks or cryptocurrencies and earn returns through the appreciation of the value of your investments.
  9. Online surveys: Participate in online surveys and earn money for your opinions.
  10. Automated trading: This is a great strategy if you’re looking for passive income, i.e. invest once and earn returns daily/weekly. Automated trading or ‘trading bots’ will trade the markets for you automatically using a set strategy or settings that might tweak slightly. There are many in the market, but I use this one to earn me consistent daily positive returns, with a minimal investments.

By taking the time to get clear on your goals, identifying your skills and interests, creating a strategy, setting up a schedule, taking advantage of technology, outsourcing certain tasks, being consistent with your efforts, and learning from others, you can create an online income alongside your corporate job. Keep in mind that it will take time, effort, and dedication to make it happen, but the rewards can be well worth it.

Remember to also be mindful and keep the work-life balance healthy, the idea is not to burn out or neglect important aspects of your life, start small and grow gradually, review and adjust your strategies as you go and always be open to learn and evolve.

start a profitable online business today.

Have you heard of ChatGPT? 

It’s a form of AI (Artificial Intelligence) that can do alot for you – especially if you want to start an online business. ChatGPT reached over 1m new subscribers in just a week!

Starting and building an online business can be a complex and daunting task, but ChatGPT is a powerful tool that can help you every step of the way. 

Best of all, its a free service! Check it out here.

Here are 12 ways you can use ChatGPT to get your online business off the ground:

  1. Brainstorm and generate ideas for products or services to sell online. ChatGPT can help you come up with unique and interesting concepts for your business by asking it open-ended questions and letting it generate suggestions.
  2. Research your target market and competitors. ChatGPT can help you gather information about specific industries, products, and competitors so you can understand the landscape and identify opportunities for your business.
  3. Refine and develop your product ideas. ChatGPT can help you brainstorm product features, pricing, packaging, and more by asking it questions and getting its feedback.
  4. Create marketing and advertising campaigns. ChatGPT can help you come up with ideas for promoting your business and reaching your target audience by asking it questions about your branding, marketing channels, and target audience.
  5. Create your website or landing page! You simply have to tell ChatGPT the detail, i.e. what type of website you want, and what you want it to achieve – and voila!
  6. Develop content for your website or social media channels. ChatGPT can assist with crafting engaging and informative content for your online presence, including blog posts, product descriptions, and social media posts.
  7. Headline suggestions. Ask ChatGPT to provide headline or blog title suggestions, and it will come up with eye-catching headlines and copy for your websites and landing pages.
  8. Create email marketing campaigns. ChatGPT can help you draft email marketing campaigns that are tailored to your target audience and designed to drive conversions.
  9. Craft customer service responses. ChatGPT can help you draft responses to common customer inquiries, such as shipping and return policies, so you can focus on more important tasks.
  10. Research and analyze trends in your industry. ChatGPT can help you stay up-to-date with the latest trends and developments in your industry by asking it questions about specific topics and getting its insights.
  11. Identify potential partners or suppliers. ChatGPT can assist with identifying potential partners or suppliers for your business by asking it questions about specific industries or products.
  12. Develop a business plan. ChatGPT can help you outline your business goals, target market, marketing strategy, and more by asking it questions about your business and getting its feedback
chatgpt

Overall, ChatGPT is a versatile tool that can help you with a variety of tasks as you start and build your online business. 

Best of all, you simply have to type in the command box what you want it to do. The way you write your request is as if you are asking a friend.

For example:

Provide blog title suggestions for best ways to clean dogs... or

What is the html code for a basic landing page for a fitness niche, so subscribers can sign up to a free fitness newsletter.

With its ability to generate ideas, research markets, and assist with product development, marketing, and customer service, ChatGPT can be an invaluable asset as you navigate the challenges of entrepreneurship. Of course, ChatGPT is the starting point, and you will need to then customize its output to suit your project or business.

If you’re looking for expert guidance on how to properly start an online business, then I would highly recommend the Modern Wealthy training below.

It’s the same training I took 2 years ago!

Expert affiliate marketing training for beginners
Looking for another source of income?
money and time - paying off your mortgage earlier
Don’t wait around…start earning passively this year

An affiliate business is where you promote other company’s products to earn an income. This post talks about the best paid affiliate schemes in 2023.

As an affiliate marketer, one of the most important factors to consider when choosing a program is the commission rate. After all, the higher the rate, the more money you stand to make from each sale. In this post, we will take a look at some of the best paying affiliate schemes currently available.

1. Amazon Associates

Amazon is one of the biggest and most well-known e-commerce companies in the world, and their affiliate program, Amazon Associates, is just as popular. With Amazon Associates, you can earn up to 10% in commissions on eligible products that you promote. One of the great things about Amazon Associates is the wide range of products available, including books, electronics, clothing, and more. Plus, their cookie duration is 90 days, giving you plenty of time to earn commissions on referred sales.

2. ShareASale

ShareASale is an affiliate network that allows you to promote products from a wide range of merchants. With ShareASale, you can earn commissions of up to 35% on sales made through your referral link. They also have a large selection of merchants in a variety of niches, making it easy to find products that align with your own interests and audience.

3. CJ Affiliate

CJ Affiliate, formerly known as Commission Junction, is another popular affiliate network with a wide range of merchants and products. With CJ Affiliate, you can earn commissions of up to 8% on sales made through your referral link. They also have a long cookie duration of 60 days, giving you plenty of time to earn commissions on referred sales.

4. FlexOffers

FlexOffers is another affiliate network that offers a wide range of products and merchants. With FlexOffers, you can earn commissions of up to 50% on sales made through your referral link. They also have a long cookie duration of 30 days, giving you plenty of time to earn commissions on referred sales.

5. ClickBank

ClickBank is a popular affiliate network that offers products in a wide range of niches, including health and wellness, personal development, and more. With ClickBank, you can earn commissions of up to 75% on sales made through your referral link. They also have a long cookie duration of 60 days, giving you plenty of time to earn commissions on referred sales.

There are many great affiliate programs out there that offer high commission rates. By choosing one of the programs listed above, you can maximize your earning potential as an affiliate marketer. Just be sure to do your research and choose a program that aligns with your own interests and audience.

You can even search for a brand that you love using, and in Google type ‘xyz affiliate scheme’. This will take you to the company’s affiliate page where you can sign up, and start promoting the product and earning commission when you make a sale.

If you’re looking for guidance on how to properly start an affiliate business, then I would highly recommend the Modern Wealthy training below.

Expert affiliate marketing training for beginners
When there’s an opportunity that;
 
– Runs on auto-pilot
– Needs no prior experience
– Is recession proof
– Helps you take your slice of onlne sales..
 
You can’t let it pass.
 
If you’re keen to get started and want to give yourself the best start for 2023, check out Modern Wealthy.
 

It’s worth preparing your portfolio in the event of an economic downturn. This article presents some of the options available to protect against a significant drop in the markets.

It’s been over 10 years since the last recession, and as business cycles tend to last between 8 to 10 years, many are wondering whether we’re due a slow down in the economy and a recession.

A recession is essentially a business cycle contraction when there is a general decline in economic activity. Usually, key macroeconomic indicators such as GDP, investment spending, capacity utilization, household income, business profits, and inflation fall for at least 2 consecutive quarters.

A key financial market indicators is the 2-10yr Treasury note spread. This is difference in yield between the 2yr and 10yr Treasury notes, and indicates the general shape of the yield curve, i.e. positive (upward trending), negative (downward trend) or flat. When investors expect weaker growth, low inflation and easier Fed policy, the yield curve flattens or inverts.

See below graph of the 2-10yr spread, with the key recessionary periods (1980-82, 1990-92, 2000, 2008-09) highlighted. You can see that the spread is close to, or at zero just before the recession;

With the current spread at around 0.1% and the yield curves of most developing nations either flat or inverted, it makes sense to consider those assets available to investors as a ‘recession’ hedge;

Gold

Gold (and silver) has been a reliable medium for thousands of years because of its quality as financial insurance, a store of value, and its tangible nature.

Gold has long been known as a safe haven for investors in times of chaos in the general equity markets. The run to gold during recessionary periods (demand > supply) creates an uptick in the value of the commodity.

The most recent recession occurred between 2007 and 2009. It was a brutal and long economic downturn that was driven by the housing crisis and reverberated around the world. To give you an idea of how painful this period was for investors, the S&P 500 Index was down roughly 37% between December 1, 2007, and May 30, 2009!

But what happened to gold? The price of the yellow metal rose 24%! It wasn’t a straight rise — gold was down around 10% at one point — but it never fell as much as stocks. Overall gold held its value at a time when stocks just kept falling.

Exchange-traded funds (ETFs) like SPDR Gold Shares (NYSEMKT:GLD) or iShares Gold Trust (NYSEMKT:IAU) track the price of gold, and are probably the easiest and quickest way to get gold into your portfolio as you don’t have to worry about taking delivery of the metal.

Jewelry demand (makes up 50% of gold demand) is more resilient than you’d probably imagine. And with gold jewelry demand coming primarily from India and China, a U.S. recession won’t necessarily change the desire for jewelry in those countries. Gold jewelry is also a status symbol, and as these countries move up the socioeconomic ladder, demand for gold jewelry is likely to rise over time.

See below the annual returns for gold compared to the S&P 500 during the last recession. You can see that gold outperformed the US equity benchmark in this time;

Gold vs S&P (US equity) performance during 2008-10 recession.

Government bonds

The reason why bonds do well in bad times is that they’ve always been considered a risk-off or ‘safe’ asset. U.S. treasuries, and especially long-term government bonds, are thought of safe, solid investments as there is very little chance of default on those assets by the government. The U.S. is not likely to go bankrupt even during a recession.

During recessionary periods, Investors are risk-averse and tend to shy away from credit risk, such as corporate bonds (especially high-yield bonds) and asset-backed securities (i.e. mortgage-backed securities), since these investments have higher default rates than government securities.

Investors will therefore seek safety and invest into government bonds, say U.S. Treasury bonds. As a result, the prices of risky bonds go down as people sell and the price of Treasury bonds increases. See below a chart of 3 long-term government bonds (UK gilts, German Bund, US 10yr Treasury) compared to the S&P 500 during the last recession. Note that while the bonds provided positive returns in 2008 compared to the circa 37% downturn in equities, the volatility of the S&P 500 (helped by people piling into cheaper equities) resulted in higher returns in S&P 500 compared to the bonds in 2009 and 2010.

Of course, the introduction of the quantitative easing (printing money) programme and numerous rate cuts in the US, Eurozone and the UK after 2010 resulted in significant positive returns for those sovereign bond securities.

Consumer staples

Even in the worst of times, consumers still buy the same amounts of staple goods like toothpaste and toilet paper. Historically, consumer staples equities have held up best out of any sector during hard times.

When the S&P 500 plummeted 49% during the dot-com crash, consumer staples as a group were up 1.2%. Although they fell 29% from peak to trough during the financial crisis, they actually performed the best of any sector.

Another benefit consumer staples provide is their low volatility. Companies in the sector rarely experience sharp price declines. Because of this, they have had the fewest bear markets of any S&P sector.

Consumer staples perform well in downturns also because of their reputation as high-quality dividend stocks. If a company can pay out even in the worst of times, investors will buy it. In addition, many of the consumer staple companies paying dividends have actually increased their dividend payments year on year!

McKinsey found that earnings in this sector remained nearly steady in every recession dating back to 1980. Put simply, consumer staples are cycle-agnostic.

See below a chart from Gallard Research comparing the performance of the consumer staples subindex and S&P 500 during the last recession. While the subindex did lose value, it was less than half of the value lost by the S&P 500 during the period;

Cash

Risk-averse and unsophisticated investors will often stash their cash in money market funds when they get nervous about the markets. While these funds do provide a high degree of safety, they should only be used for short-term investment.

Moving a good portion of your portfolio to cash or a CD (certificate of deposit), you can still make around 2-3% (guaranteed) based on today’s risk-free rate. While it’s pretty modest, you’ve got to weigh a guaranteed return against the possibility of missing out on further gains or the possibility of losing money.

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Go short!

It’s very, very likely that if you’re anticipating a recession then the equity markets will undergo a large dip. If you’re willing to take a risk, why not go net short in the equity markets? As a retail investor, you can do this by investing in those ETFs that go up when the underlying equity market it tracks goes down. This is known as a leveraged Inverse/Short ETFs, and they seek to provide X times the opposite return of an index for a single day.

Of course, as they’re leveraged they carry larger than normal risk – so you have to know what you’re doing and have a stop in place! Click here for a list of leveraged short ETFs.

Conclusion

Recessions can be emotional times for investors and the general public. If you have an investment portfolio, ensure it is well diversified. The above asset classes are some ideas that can be implemented into your portfolio.

However, the best way to protect your income during a recession is to have a variety of income sources you can rely on (not just your employment or your investment portfolio). This is why I recommend starting an online business and generate a sustainable, passive income.

To learn more, click here.

Best

There are a whole host of investments out there, each with unique risk, liquidity and feasibility characteristics. I firmly believe in diversifying your portfolio, but for this post I want to share why I’m a fan of property investment and think that it’s something everyone should and can invest in. Not forgetting its an actual physical asset you can touch and feel – here are my 6 reasons;

Steady income with tax deductible expenses

The rental income you get on property investment provides a source of steady, passive income. This is unlike equity investments where not all companies pay out a dividend. In addition, you have control over the property (i.e choice of tenants, renovation, structure) whereas with equities – you have a negligible, if any influence over the strategic, operational or financial decisions of the company!

Owning a rental property is like owning a business, in that pretty much all expenses related to running the property are deductible from the rental income – which lowers your tax bill. Of course, there is no escaping property taxes but you can be smart and optimize your tax deductible expenses….legally.

Tenant pays down your mortgage

Most people take out a loan secured on their rental property, i.e. a mortgage – in order to purchase the property. As part of the loan, there will be monthly payments – which will include a mixture of loan repayment and interest. To service these payments, you rent out the property to earn rental income, and essentially this income covers the monthly mortgage payment and (hopefully) leaves a surplus/profit every month.

So basically, your tenants are paying off your mortgage. As a result, your outstanding loan reduces and the interest on that loan becomes lower (due to a lower loan balance). In time, you may increase the rent due to either a buoyant rental market or through your additional work/renovations you carried on the property.

Through this combination of lower monthly loan repayments and higher rent, your profits and cashflow increases. Eventually you want to get to a position where your rent pays off the entire mortgage, and you no longer owe the bank. This takes time, but it can be sped up with lump sum down payments where possible. T

The aim should be to get the property free of debt – making it a low risk, high return strategy in the long-run.

Inflation hedge

Property prices like most markets are subject to economic cycles and the micro-economics of supply and demand. However if you are prepared to stay invested in property for the long haul, you will find that the real returns of property are positive, i.e. after adjusted for inflation effects – the rental and capital appreciation of a property exceed the inflation rate.

This is not the case for all equities or fixed income investments. For the last 40 years both the US and UK residential property market returns have exceeded the rate of inflation. This particularly is due to the progressive increase in property prices rather than rental yields. Of course, the returns vary within regions, and that’s where location becomes a huge factor in your property investment strategy.

Sail through those economic cycles

Consider these economic scenarios that illustrate that if held over the long term, your property investment is a safe bet:

  1. Low interest rate environment => Cheaper to borrow/refinance mortgage => more house purchases => house prices increase. GOOD FOR LANDLORDS
  2. Higher interest rate environment => More expensive to borrow => fewer house purchases => mortgage payments higher => people more inclined to rent. GOOD FOR LANDLORDS
  3. Supply of housing exceeds demand => House prices stagnate/reduce => more purchases due to lower prices => eventually pushes up house prices. GOOD FOR LANDLORDS.
  4. Demand for housing exceeding supply => Can be good for house prices, rent or both. GREAT FOR LANDLORDS!

Of course, the above is just a basic implication model, and there are other factors that can contribute to the housing market, i.e. regional housing micro-structure, global credit event (i.e. Credit Crunch of 2008-2010), rental ceilings, property taxes etc.

Ariel view of properties

Leverage!

A key feature of property investing is the ability to benefit from ‘leverage’.

For example, to buy a £200,000 property would cost you just £62,000 (assuming 25% mortgage, £5k refurb, and £2k legal costs) rather than the full £207,000.

If the property price then increased over two years to £250,000, upon selling the property you’d receive £100,000 (£250,000 – £150,000 outstanding mortgage), a phenomenal 61.2% return on cash invested, while also receiving rental income.

While this is true, the reverse also holds. If the property value declines from £200,000 the investor experiences negative equity and his/her loss on investment is also amplified due to leveraging (borrowing).

Of course, the recent stamp duty changes and tax laws introduced by the UK Government on buy-to-let property has significantly reduced cashflow for landlords. As a result, investors have become less incentivized to acquire further properties fulfilling the Government’s intentions. Despite this, there are still many property investment strategies available to investors, including;

  • ‘Flipping’ (developing and selling the property in the short term)
  • House in Multiple Occupation (HMO)
  • Short-term lets including Air-BnB
  • REITs (Real Estate Investment Trusts)
  • Crowdfunding (see below)

On a budget…try Crowdfunding

Owning properties is great, but with the higher deposit requirement for buy-to-lets or rental properties, it means you can have a lot of capital tied into one property…not forgetting the taxes and any refurbishment costs.

Real estate crowdfunding allows you to invest in real estate along with other investors, usually through a platform that will propose real estate deals and take care of all the work, like listing deals, doing all the legal work, and then managing the property. This allows you to invest as little as £1,000 into a residential or commercial real estate project for potentially 8 – 13% annual returns based off historical data.

This beats the return from £1000 in your savings account! With real estate crowdfunding investing, there’s also physical asset that’s backing your investment – similar to direct investing.

In addition, crowdfunding is great for people who want the hassle of tenants or renovations and essentially want a ‘hands off’ approach once the investment is made.

Essentially, it allows an investor to invest in a variety of property deals (residential, commercial, industrial) with a much lower capital injection. Click here for a list of recommended crowdfunding platforms.

What about the recession?

The last recession in 2008 onwards was driven by irresponsible lending to house buyers, complex credit products and greed. On top of that, the banks and lenders had rubbish capital buffers and so suffered wild losses – and had to be bailed out, severely affecting the markets, economy and consumer confidence. This time around there is more regulatory scrutiny over financial products, lending and bank capital adequacy. In other words, we are unlikely to see large corrections in house prices – although that’s not to say they won’t be affected.

Consumer confidence is hit in a recession and people are less likely to spend and invest, which reduces house prices. And the property investor needs to be prepared to ride these out – especially if s/he doesn’t have a need to sell. Note that a recessionary environment also provides opportunity to purchase assets at a discount!

I would always recommend investing in property for the above reasons. Refer to Global Property Guide for a useful source on property trends, statistics and news across the world. As mentioned at the top of this article, rental properties should form part of a diversified portfolio thus aiming to spread risk. Of course, all investments should be entered with a thorough due diligence.

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