What does it mean to be an ethical property investor?

by Roberta Ward

When I was requested to write an article about ethics in property investment I was asked a few questions:

• Do ethics and property investment make easy bedfellows?
• Are there ethical dilemmas in property investment?
• What does it mean to be an ethical property investor?
To answer these questions properly would take much more than one article, so I’m going to tell you in particular how we choose to apply it to our business.

Dictionary definition of Ethical: ‘moral principles, morally correct’.

Dictionary definition of Morals: ‘a persons standards or behaviour, concerned with right and wrong’.

These are the guiding principles which drive our business. I am often asked – “What is ethical property investing?”  The three things it means to us are:

• Not getting involved with companies or individuals touting a ‘get rich quick’
methodology
• Teaching people the truth behind methods of investing- good and bad/ ‘warts and all’

• Being extremely careful who we link with – and by this I mean on any level-whether that is a text link out from our website to another company or literally the people we choose to work with and for.
In truth, it’s been a huge challenge keeping a moral compass within property
investing. There are many times when you are tempted by bribes or incentives to be part of something questionable. But, our own stance is to connect with and help people who have the same ethics as ourselves. We never directly recommend anyone we have not worked with personally. That way, if they prove to be not what they seem, then at least it’s just us and not any clients of ours who lose money. If we are not completely comfortable with them then we don’t work with them.

Our own code of ethics was developed over time because of the disgust we felt at the way property investing has been hijacked by marketing sharks who are really just chasing the quickest route to your money. The advent of huge ‘property networking’ events, which are little more than sales drives, has made the whole scenario very distasteful. It still amazes me why so many folks get sucked in by them.

As a company, we have to be very good judges of people, and we spend a lot of time examining those we do business with. The higher your profile becomes, the more people are keen to be seen working with you. This in itself presents a challenge and we have had to find ways to say ‘get lost’ politely! ( Not always easy-as those with poor reputations tend to be like a jack russell hanging on to a trouser leg!)

So back to the questions at the start of this article.

“Do ethics and property investment make easy bedfellows”- no not really, it’s complicated but it’s also very rewarding in the long term.

“Are there ethical dilemmas in property investment?” You betcha! Every day we come across new challenges, but business is about challenge after all.

“What does it mean to be an ‘ethical property investor?” It means having courage to stand up for how you believe business should be done and being prepared to weed out those who seek only to feather their own nest.

Roberta Ward is the owner of mypropertymentor.co.uk, a top 20 UK property blog, and teaches ethical property and wealth investment strategies for professionals via Joint Ventures, workshops and revolutionary collaborative events.

To rent or sell? That is the question.

My longstanding tenants gave me notice this week and will leave in four weeks and so I’m going through the traditional ‘shall I sell up?’, ‘shall I rent?’ dilemma.

I always start by looking at what’s for sale and to rent in the area and how much is being asked I know I know asking prices can be higher then actual recieved price/ rent – but at least you know the competition and the prices potential tenants and buyers will be comparing you with. After all you have to put yourself in their shoes and see what else they could get for their money.

I make a list of the properties in excel, grouped by price (£170k, £175k, £180k, £185k etc…), there were a few at either end and a lot for £175k so I know th

ere’s some choice out there – looking at the more expensive ones they had new bathrooms and kitchens whereas mine does not – neither does it have double glazing but on the plus side it has three double bedrooms and a long gar

den which backs on to a private park. Usually these victorian terraces back on to one another with little privacy outdoors.

Primelocation and Rightmove have always been my hunting ground s for t

his type of data – then a look at sold house prices in the area. This is free information held by the land registry but now made available in a variety of places – Nethouseprices is a good one. This Land Registry data is however 6 months old as it is compiled from the new registration of land titles and can

take time to become availabale. In a stable market this doesn’t matter but in recent years prices have fluctuated greatly over relatively short periods. The recent pick up this year for example won’t show in sold prices yet.

Then on to visit The Best Estate Agent In Reading. A former neighbour of

mine, fantastic salesman (I bought a house from him a few years ago) and trustworthy – the latter characteristic being the one i most value in an Estate Agent (or anyone for that matter).

He asked pertinent questions – how much did you buy it for? How long

can you afford to leave it empty? What condition is it in now? Have you updated, modernised? He’s worked this area for about 6 years and remembers the house, knows the road and I trully believe he could sell it for me.

The probalem is the market – 6-8 weeks fto sell, worst case scenario £170

k he says, best £175k – depends if you can afford to wait but the market is slow and doesn’t look to be heading to 2008 levels this year.

His advice? Rent and sell concurrently – ensure the Buy to Let mortageg is covered and start marketing the property – for the price of a HIP at £249 and nothing else to lose.

Finally, I was very surprised by the figures on Zoopla in terms of the pr

edicted value of the property. I first read about Zoopla in .nett magazine in sydney where they were profiled about 18months ago. Looking at the Board of Directors, the technology and knowing a bit about the market I could see great potential but the property data was simply rubbish. I knew my area nd t

he market and prices were way out. But they’ve obviously built up enough data and got smart enough about cleaning it up and kneading it in the right way to bake up a plausable Value Estimate of £176,979. The rental value was still way out – £626pcm when I know that going rate in the area to be around £750. Not bad though and another tool in the toolbox – I think we’ll continue to see good things from Zoopla.