Risk and reward in property investment

This week we talk 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? All whilst finding an investment approach that matches?

We talk 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 conclude that the key is to find the right point for you in the risk/reward/time triangle. Also, consider the relative risks that you’re happy to take on. Everyone has their prejudices and irrational fears, so to minimise them you should take that into consideration when setting your property strategy.

Our story this week was that one of the UK’s biggest private landlords is evicting all his housing benefit tenants. 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. 

We recommend 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.

Rob B also suggests 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!

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

Click here to find out more and download a free sample chapter

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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?

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