“The Blairs and Property Do Not Mix”

February 20, 2006 by lifemadesimple
Filed under: Wealth Coach Diaries 

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Annie says:

Once again the Mail Group newspapers are at the cutting
edge of investigative journalism. Yesterday "The Mail on Sunday" informed us that the Blairs face a loss
of £675,000 on their Bayswater (London) town house.

Perhaps the most telling sentence in the whole piece is
this one: “The Blairs have privately admitted that they and property do not
mix.”

Certainly some people have more of a flair, and a taste,
for property investment than others.

But property is not just about flair. As we learn on the Money Gym, it’s also
about opting for a strategy and sticking to it. Useful strategies include:

  • setting clear criteria for the kind of property you want to buy and sticking to
         them
  • selecting rental property that tenants will want to rent,
  • and, as the Passive Investment
    people and other property experts, like Peter Stanley and Money Gym coach Tim Birch, repeatedly tell us, it’s about buying property under market value and thus making your profit when you purchase it.

The Blairs are said to have assumed their Bayswater house
was a bargain because the owner cut £300,000 from the original asking price of
£3.95 million. Less than 10%, in other
words, on a large house that was in need of modernisation.

As further proof that property and the Blairs do not mix,
the Mail adduces their Islington house that they sold in 1997 before the London
house price boom, and the 2 Bristol flats sold for £60,000 less than Cherie
paid.

By selling their Islington home in 1997, according to The
Mail, the Blairs lost a potential £1 million. The Mail makes it sound positively careless. Three questions arise, however: first, how were the Blairs to
foresee the property boom; second, was it the most appropriate decision at the
time; and third, have they subsequently leveraged the money they made on the
sale of that property?

If they had spent it all on dining in discreet Italian
restaurants in Islington, that would be a loss. If they reinvested it, then they may have
made their profit elsewhere.

What’s so interesting about this article is not what the
Blairs did, or did not do, with their money, so much as the underlying
attitudes of the newspaper and, allegedly, the Blairs.

The Sunday Mail appears to suggest that property is a
tricky business; one false move, you get your fingers burned and that’s the end
of it. Such is the teaching of
short-termism.

Curiously enough, a different perspective emerges week on
week from their Property supplement.

Assuming that The Mail on Sunday is right, as ever ;-),
then the Blairs have bought property, without the mindset of property
investors.

Ultimately, nobody, not even the Prime Minister, can be
all things in all spheres of life. But
there is more than one way to become a property investor, just as there is more
than one way to buy a property.

Since what you think is what you get, it’s not hard to see
how swiftly “we and property don’t mix” goes from being a limiting belief to a
self-fulfilling prophesy. What you
don’t mix with you’re hardly likely to find out about.

Gill Fielding says: “Ignorance is expensive.” And
“knowledge”, so the cliché goes, “is power”. The best thing about knowledge is that you don’t even have to learn
everything yourself. A lot of knowledge
is just about doing good research; identifying a reliable source of the
information you need, so you have access to it when you need it.

That’s just one of the things that makes The Money Gym
such a great resource.

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