A Rolling Stone Gathers No Moss

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My brother has owned 3 properties in the last 5 or 6 years and not surprisingly he has lost money on each of them. The problem is with property you need to spend time letting the investment work for you.

This week he has been asking for advice and I will have to try and help wherever I can so he does not make any mistakes. Unfortunately his latest property he purchased 2 years ago is a flat and those types of properties have seen the values tumble recently.

New government regulatory laws have forced landlords who were renting their flats out to sell which has flooded the number of flats hitting the market. His estate agent warned him he should expect to see a loss on his purchase price anywhere between 7% and 15%. Really bad news as this is a £20-£30K hit and he should have been more aware of what was happening in the market. There are always signs and you need to pay attention. Maybe he cannot sell his property because that is the worse case scenario that one can never rule out and you have to be realistic.

This losing money on property is foreign to me as I have owned 5 and only had one bad result. That was not my fault as the underpinning of the property was hidden from the sale details when I purchased and was unaware until it came time to sell. The banks would not provide the buyers with a mortgage which were the same banks that had given me a mortgage so I had to do a deal with a cash buyer and broke even. The other two properties in the UK I did very well on doubling the return each time.

Currently I own two properties in South Africa and will more than double my investment as well when they are eventually sold. The difference between my brothers losses and my wins is the time owning the properties. Housing markets will always have their boom and bust periods and you have to just wait them out getting your timing right.

The UK property market has changed since I was there over 20 years ago and you have to pay careful attention to the areas. Not pointing out the obvious but Reading where he is currently living is not the same as it was 10 years ago and has gone downhill rather fast mainly due to all the migrants. This is just an observation I have noticed and is not an area I would ever consider to reside in. There are problems in the area and my brother was attacked last year which ended up with a burst ear drum. Diversity is a strength until it is not and it looks like Europe as a whole has gone too far.

I have told him if he has to live in the UK then I will help him, but my advice was to move to Eastern Europe because I only see serious civil unrest in the future for the UK. Look at Belfast tonight after an attempted beheading last night. I think the writing is already on the wall and there has to be bloodshed to fix this and there is no other solution. Maybe an extreme view for some, but this is the reality of what has crossed the borders as there is no thought of peaceful assimilation. His work is in the UK so I get that, but as a financial lawyer maybe he can do work from home contracts and not have to commute to London.