So you want to Find investment property? That’s great, it really is, I will fully support you the whole way. However as I am also an investor I have to let you know about the downside of property investment.
YOU WILL VERY UNFORTUNATELY COME ACROSS PEOPLE WHO ARE DOWNRIGHT RUDE, INSULTING AND HAVE NO IDEA HOW TO FIND INVESTMENT PROPERTY THAT SUITS YOU.
Find investment property – When it goes wrong
Here’s my story, just as a warning. To give the company as a whole benefit of the doubt I won’t mention their name. But I was absolutely gobsmacked at the aggressive and abusive way I was treated by a member of their staff.
My assistant had contacted this company about an investment. In the subject of the email it said ‘7.5% income’ in the main content of the the email it said ‘7% NET YIELDS’ for investors.
Now, ignoring the difference in 0.5% yield change in the one email. Any 7% net yield is an extremely tasty investment. That would mean that after fees and expenses I would be getting 7%. Baring in mind that as a general rule of thumb, I look for anything higher than 3% net yield and am interested.
So the chap phoned me, rather than replying to the email. He launched into this fabulous spiel about the property and promised me that I would definitely be getting a high NET yield. Intrigued I got up my spreadsheet and told him to give me the figures so that I could work out the calculations.
Figures may not always be what they seem
He told me of the rental income and the cost of the property. So I asked him for service charge, management fees and any other fees associated with the property. He told me that wasn’t necessary and enthusiastically asked what did I think, it was great yield and a great property.
I inputted the numbers into my spreadsheet, estimated the cost of my expenses and calculated the yield. 1.98%!! What? I explained to him that he didn’t have his net yield calculation right, he had advertised the investment wrong he was giving gross yield (yearly rent / capital value = gross yield)., so it wasn’t something I was interested in.
TIP: Simple net yield can be calculated by: (Annual rent – annual expenses) / capital value = Net Yield
Anger when you can’t make a sale is NEVER OK
Angrily he told me I was wrong it was definitely 7% net yield and that there were other investors who would bite his hand off for it. So I told him that that was fine, but that it wouldn’t be interesting me and I hung up.
This guys colleague then phoned me and started telling me that I had no idea about property investment. He was shouting at me and being pretty nasty. I asked him to stop insulting me and hung up the phone.
Why I needed a call back I don’t know, but that wasn’t the end. I then received a text setting out more figures :(£750 x 12 = £9,000) / £150,000 = 6% gross yield. Another yield and again an example of gross yield.
What the problem was
SO it wasn’t the original yield they advertised. They were not 100% clear on figures, as it changed 3 times. For some reason they believe that gross yield is net yield. They aren’t prepared to let someone who just isn’t interested go without being horrendously rude to them.
It could also have been that they couldn’t explain their deal correctly in which case it is £750 after expenses. However if this was the case, why couldn’t they give me the actual rent they were quoting and the cost of expenses?
They claim to find investment property, but you’ve got to do it by listening to what their potential client wants. They also have to accept that if they haven’t got a good, honest deal then someone may not want to get involved!
Moral of the Story
If you are out to find investment property, don’t trust everything on face value. Unfortunately in this large industry there are people out there who don’t quite understand. That’s OK, we’ve all got to start somewhere. But it’s frustrating that they aren’t prepared to learn. Perhaps it might deflate their egos?
I really resent being made to look like a fool and being shouted at and insulted early on a Friday evening.
However, what makes it worse is that they could be playing this sort of game with investors who may not have as clear goals, or are happy just to take what they say first time.
Advice when looking to find investment property
Please always check the figures. If you need a third party to do this too, then so be it. Set clear goals and boundaries. If an investment doesn’t fit with your criteria, it’s absolutely fine to leave it.
Finally, this industry is actually a really great place to work and be. This negativity and aggression shouldn’t happen, but unfortunately it does. Standing up to it and saying it’s not acceptable is the best way of combatting it. I made a complaint to this company and will leave it with them to deal with internally and have moved on. If you experience this, then report it and just know that it isn’t a reflection of you and your investing career. You are probably in this industry to enjoy it, just as I am. Don’t let bad experiences take that away from you. Just have your eyes open to it!
Have you had a similar experience? How have you dealt with it? Let me know in the comments section below. If you found this blog useful don’t forget to like it and share it around.
NC
