There’s a property crash coming and I want you to get prepared
You see those prophets speaking out and saying there's a crash coming or this is going to happen, the prophets are always right because there's a crash that happens around every 10 years.
This is not such a big deal because property prices go up and down and you might have seen videos of people talking like they're prophets about the coming crash on different platforms, yes it’s true, the crash is coming.
If you go back to the last a thousand or two thousand years, you can possibly trace and see what happens is that, there's always a crash followed by a rise, followed by a crash, followed by a rise and the interesting thing is that, the crash never takes too long.
People ask what are house prices going to do in the UK?
Well, house prices in the UK don't follow each other and what I mean by that is, if you look at London, the prices might be going up but that does not mean that Manchester’s prices are going up at the same time.
You could get a massive boom in London and nothing happening in Manchester and then you could have a massive crash in London and a massive boom in Manchester therefore, there's always crashes happening and there's always booms happening and if you want to maximize off of property or any investment, buy when properties have just had a crash and wait for it to rise again.
If you look at the stock market, or any other business, the best time to buy is not when there's been a massive boom but during or just after a crash.
However, with property, I don't like to speculate too much and this is because capital appreciation does not pay my bills.
What I mean by that is, I’ve got properties that I’ve bought, they've gone up really high and it's fantastic because it makes me feel great.
It doesn't actually help me unless I’m going to refinance it and borrow against that property or sell the property and what I care about more than anything is the cash flow.
When there's a crash within the property market and prices go down, normally that's because of a recession as people are struggling and there's usually three reasons why a recession comes one it’s because the people run out of money, the banks run out of money or because of fear.
Therefore, when people are running out of money and the banks are running out of money which means they’re not lending, there's fear and what happens is that people stop buying and stop being able to afford to buy property as the prices start going down generally.
When that happens, people start renting more because they can't buy and when people are renting more, there's high demand of people wanting to rent making the rents to go up.
In the 2008 crash, the rents actually went up immediately after the supply was less than demand.
When buying properties, don't get too worried about the rabbit hole of what's going to happen to the prices as people always ask me what's going to happen?
Firstly, it depends what market you're in because every city has got its own economy and you've also got to get that every city even every town has got its own economy. I’ve had properties in Walsall center and then I’ve had houses in block switch which is two miles down the road and the houses two miles down the road have doubled in value over the last 10 years while the flats in Walsall have gone down in prices.
You need to study patterns, study what happened prior and work out what's the economy doing in the specific area where you're expecting to invest. Don't just listen to Robert Kiyosaki on YouTube and as much as I love Robert Kiyosaki, but talking about something very general in America and take it to your apartment in Walsall city center is just stupid.
You need to think for a minute, think about where you are and more than anything doesn’t worry about property prices going up or down because what matters is why are you buying the house in the first place? are you buying the house because you want it to go up and then you want to sell it? is that the strategy? because that's not my strategy and that's quite a bad strategy because you should be buying the house because of the cash flow that it gives you.
You're buying a house for financial independence which means that you've got a passive income or a recurring income that shows you don't have to be reliant on a job.
That does not come from a crash or a boom happening but from cash flow and if you're buying a property that’s got a positive cash flow, you could buy it for 100 grand and the rent is 600 pounds a month which is a fantastic deal.
Always remember that every city in every country has got its own economy and it's your job to figure out what's going to happen in the city that you're investing in and it's your job to make sure that the ROI is worth the investment.
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