Your home is not an asset But it could make you rich!

“If you always do what you’ve Always Done then you will always get what you always got!” This report explains that what we were all taught in the 1970’s, 1980’s and even 1990’s (even if it did touch on financial education) could not have prepared you for life in the 21 st century and beyond. Your home is not an asset. Fact :  You will live longer*  Your pension will not be enough to make you self-sufficient**  Young people today do not need to own where they live or live where they own  Your home is not an asset This report will give you a better understanding of property investment and how to leverage your family assets to create on going financial security – for generations to come. Specifically why you are wrong to think your home is an asset – it’s not! The consequences of not taking this seriously …. finding out when you finally collect your long, long awaited pension that it is simply not enough to keep you warm, fed and happy. You will be a burden to your family (if you are lucky to have one that can afford to pay for your care), because let’s face it the government will simply not have the funds to care of the increasing and increasingly large aging population. * ** Albert Einstein

Assets and Liabilities?  An asset is something that generates money and puts it into your pocket.  A liability is something that requires you to take money out of your pocket to pay for it. This information may shock some readers because like us you may have been taught by your parents and grandparents that your home is an asset. We were all taught that what we needed to do was go out and get a job, buy a house on a mortgage and then work all our lives to pay for it, because it was an asset! The stark reality is that your home is not an asset. First let’s look at the difference an asset and liability. If you think about a house ….. If you buy a house as a home without any tenants to pay you rent, then all the costs associated with the property must be paid by you; the council tax, and house hold bills, they all come out of your pocket – so it’s a liability. Alternatively if you bought a house and rented it to a tenant and the rent covered the cost of the mortgage, the letting agent fees, the insurance and the repairs – then that house would be an asset. It would generate income for you and your family. “The challenge is not seeing new places, bit in having new eyes” Proust

The cost of leaving a home empty  More and more families are splitting up and reforming, often meaning one partner in the new relationship has a “spare” house.  Young people leave home or go to university  Or simply your house is bigger than you need. We want to raise your awareness to potential ideas that you could employ to start making your home an asset rather than a liability. In order for your home to become an asset it needs to start generating an income. Rather than leave a property empty with all the costs staying as your liability, in some cases a 2 nd set of costs, why not get creative? Now think about where you live and who might want access to your spare rooms (there is even a website by this name that can help!). For example if your child is at university and so does not need the room during term time, and you live near a university – maybe you could rent your spare room to another student. It could be professionals on a full time basis, or part time to professional that only need somewhere from Monday night to Thursday. You could also rent to students. In a May 2011 report* from the Government Office for Science, it was reported that in 2006 a record 13% of the population lived alone, and this could rise by 163,000 households per year! * “No sensible decision can be made … without taking into account, not only the world as it as, but also the world as it will be” Isacc Asimov

Get creative  Renting spare rooms?  Renting your driveway?  Extending your property – to make better use of the space …  How creative are you feeling? Do you live near a train station or somewhere where parking is restricted? Do you live near an event or venue? Then have you thought about renting your driveway ….. These suggestions are not just for people struggling with a shortfall in their income – this is a way to either grow your cashflow to just make life more comfortable or to actually generate more cash that can then be invested into property. It’s about thinking as a family how you can collectively generate more wealth and invest in property, maybe even using the extra income to buy more family homes for your children. Of course – please remember that income should be declared, and speak to an accountant. And please make sure that you thoroughly check any one that you plan to let into your home and use the current contracts recommended under the Housing Act legislation. We can help if you have questions. Above all avoid selling your 2 nd property, if you can, by keeping it you are automatically starting to invest in your own cashflowing property portfolio. You will also be avoiding the situation of selling a property at the lowest, slowest time in the mortgage market and property market. Before applying this strategy you will need to carry out your own due diligence and ensure that you carry out appropriate checks, contracts and change the insurance and mortgage to reflect that someone is now renting the property, or part of it, from you. “Do not wait until the iron is hot, but make it hot by striking” William B Sprague

Developing your rental income  Do you have or have you thought of building a loft extension in your home.  This is a great way to create more space which you could use as a rental studio flat for example.  How can you maximise and leverage the financial assets you already have – once you recognise that your home is not an asset? Any property development will need to meet the requirements of your local council planning regulations. Some loft extensions are possible under “permitted development” you will need to check the regulations and requirements locally as they are prone to changing. Again there is the possibility to develop in your garden or on your land. This will need extra care when checking but again if not being used as a “habitable space” so an office for example you can again use permitted development (subject to the rules). Any buildings that are to be used for rental or living purposes must conform to and have planning permission. There are strict rules about “beds in sheds”. Without building loft extensions, you can increase the value of a rental room by adding an ensuite bathroom. What changes can you start to do to your home to maximise its future rental income, could you start the process of gradually converting your home into flats or a house of multiple occupancy with private facilities? A room with private facilities is worth a higher rental charge than a room with shared facilities as you can imagine. “If opportunity doesn’t knock, build a door” Milton Berle

Releasing equity  Do you understand that you can potentially release capital stored in the value of your house – invest it – and generate an income? This might be something that causes some people a degree of apprehension. Well given that this report is entitled “Your home is not an asset” you should already understand why you need to release money from your property to generate an income for the future. You will need to check the details of your current mortgage if you have one, and we recommend that you speak to a financial professional – The Property Sourcers can recommend a number of financial advisors that understand about both money and property investment and that is crucial. When you have sought advice you will then know whether you are in a position to release equity from your home or not. If you are currently working and have a provable income this is easier than if you are out of work or past retirement age. However there are still options for you to consider. The important thing to remember is that the cash (or equity) that you release can then be invested in buy to let investment properties in order to generate an income that is more than if you just left the equivalent sum in the building society. The rental income from the buy to let properties will then pay the mortgage on the buy to let property and costs, and the surplus can then pay the mortgage on the residential property – leaving you with extra income in the family. “Science fiction writers foresee the inevitable, and although problems & catastrophes may be inevitable, solutions are not” Isacc Asimov

A real life example Vicki explains an example where she released 30% of the equity in a property £200,000 owned outright. She then used that money (and associated buy to let mortgages) to buy 7 investment properties (called “Buy to lets”). The properties provide a great return for the cash invested, on average generate £250 per month cashflow (after the mortgage, insurance, letting agent and repairs have been paid). This means a total of £1,750 per month additional income. Now there is the important matter of the new mortgage for £200,000 that needs to be paid each month. That currently costs about £500 per month, leaving Vicki and her family with a whopping £1,250 pure profit per month in their pockets all by Using Other People’s Money (ie the banks).Using Other People’s Money To provide additional security for the family (after all taking out a mortgage is a risk) they have 25% equity in seven other properties to mitigate that liability. This really is an exciting and excellent example of how to make more money for your family without using any of your own money. “Great minds discuss ideas. Average minds discuss events. Small minds discuss people” - Eleanor Roosevelt

The Property Sourcers The Property Sourcers At The Property Sourcers we offer clients the opportunity to examine property investment as a mechanism to increase their personal income, through our five step strategic conversation. The result of this 2 hour meeting is our clients leave with a clear understanding of their options, a clear property investment plan. 75% of our client’s do not have the time to implement their personal investment plan themselves so we act as project managers. We find, fix and fill a cash flowing property portfolio resulting in additional family income and a feeling of financial security. To find out how we can personally help you please call or send us an to arrange a free, in confidence conversation.  “Thank you so much for our Strategy Session last night – your no nonsense approach and willingness to share your knowledge has helped us enormously – I couldn’t sleep last night for ideas how to take our property business forward.” HA  “I can’t believe that I can retire so much early simply by using the equity in my home! In 18 months I could be on a tropical beach – carefree – thank you so much when do we start?” JN  “I just wanted to let you know that we are very happy with the new properties that you arranged for us. They already have tenants and just weeks later we have our first regular rent payments. This extra money will make all the difference to our quality of life now that I have been made redundant – thank you so much” LS 

Vicki Wusche and Loran Northey Vicki starting buying her own investment property portfolio in 2008 and by 2010 she had enough rental income that she does not have to work anymore – she can choose how she wants to spend her time. Vicki enjoys helping people discover how property can help them and through personal strategy sessions Vicki helps people think differently about money and their home. And that is why Vicki wrote two books entitled Using Other People’s Money; how to invest in property and Make More Money From Property; from investor thinking to a business mindset Using Other People’s Money; how to invest in property Loran is a successful entrepreneur with her own training and development company, including a Harley Street practice, since Loran and Vicki first met in 2007 and when Loran started to see the benefits of investing in property, she asked Vicki to help her. In 2010 Vicki helped Loran and her family recognise the financial resources they could access to start investing in property. Now Loran is financially secure and spends her time helping The Property Sourcers’ clients to become financially more aware and more secure, something we all want in these turbulent times

Summary page Facts:  You will live longer*  Your pension will not be enough to make you self- sufficient**  Young people today do not need to own where they live or live where they own  Your home is not an asset Why Property is a good idea  The government cannot afford to support an ageing population with fewer people paying taxes.  Property can provide that additional income you will need.  A property portfolio will generate rental income that can enable your family to choose where it lives and how it lives.  Inflation is eating into the value of your home, but you can make your money work for you, and give you a better return than the banks!

Financial Disclaimer The Property Sourcers, Vicki Wusche and Loran Northey are NOT a Financial Advisors, and do not give financial advice. Their role is to use their experience, knowledge and contacts to help you examine property as an investment opportunity. You remain responsible for any decisions you make. You must carry out your own due diligence. All decisions you make are yours and yours alone. The Property Sourcers; Vicki and Loran, accept no responsibility for any decisions you take, purchases you make or conclusions you reach. They are happy to refer you to any one of their team of professionals and financial experts - please ask.

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