3 Reasons To Build A Property Investment Business

There are plenty of great reasons to build a property investment business.

Here are just a few of the most compelling ones.

Financial Freedom

This is one of the most compelling and attractive reasons to invest in property. 

From a very young age, we are conditioned to be good students, who work hard and follow the rules. We are taught to operate within a framework, in which tasks are set for us and we get rewarded for following instructions and completing those tasks to a high standard. 

Whilst we should all take pride in our amazing educational system, we must also be acutely aware of the threat it poses to our financial prospects and be careful not to fall blindly into the employment trap. 

It is almost hard wired into our DNA that we should study hard, so that we can obtain a secure job, at a reputable company, with great benefits and opportunities for progression. Good students make for good employees. 

Whilst a secure job with a great company is obviously preferable to being unemployed and thus unable to provide for yourself and your family; it comes with some major limitations and certainly doesn't tick the financial freedom box.

Let's consider some (but not all) of these limitations:

• You pay a tax at source, meaning that you're effectively working for the government and are powerless to do anything about it. 
• You're beholden to your employer, meaning that you have very little control over your life, during working hours. 
• In order to earn more money, you will need to accept promotions, which will often place greater limitations on your freedom and mean you have increasingly less control over your life. 
• As earn more, you will be liable to pay more tax at source. This means that the harder you work, the more limitations your employer is able to place on you and the more levies the government is able to raise against you. It is worth stopping and asking yourself ... are you working for yourself, your employer or the government? The latter parties are certainly extracting their pound of flesh from you.  
• You will likely be forced to make pension contributions. Whilst this sounds like a good idea in practice, the chances are that you won't be able to touch this money for a good many years and even then, you will have limitations placed upon the ways in which you can spend or invest your own money.  

As an employee, you are dependent on your employers for so much and in return for perceived security, you are sacrificing your own freedoms, so that they and the government can reap the rewards of your labour. 

Do not despair however, there is a far better and more powerful way of doing things. 

By building a property investment business, you can reclaim control of your life and finances. Let's consider how many of the limitations listed above, you will be able to remove by transitioning yourself away from salaried employment and into business ownership: 

• You will NOT pay a tax at source. This means that rather than working for your boss and the government, you will be working for yourself. If you run your property business in a smart and tax efficient way, you will be able to avoid paying a boss altogether and significantly reduce the amount of tax you pay to the government. There are many clever and entirely legal ways of doing this, but chief amongst them is using leverage and re-investing your profits back into your company, so as to defer any tax liabilities, potentially for an indefinite period of time. This is especially relevant, if you're playing the long game and planning to pass your assets onto future generations. 
• You're no longer beholden to your employer, meaning that you're able to reclaim complete control over your life and schedule. 
• There is no limit of the number of properties you can buy and rent out. Accordingly, in order to earn more money, you not need to sacrifice your time and freedoms to an employer, nor do you need to pay more money to the government. In fact, as your business grows, you will generate more profit, which can be used to pay other people to run your business for you, so that you can work less and enjoy more freedoms. 
• Rather than being forced to make contributions to a pension, you will be actively building your own pension and ensuring that your hard earned cash, is working as hard as possible for you. 

Financial Freedom can never truly be obtained, whilst working for someone else. It can supplement your efforts to build a profitable property investment business however, as your earnings can be used as seed capital to acquire new income producing assets. Always stay focussed on your big picture goals though and consider salaried employment as a means to an end, rather than an end in itself. With that in mind, if you learn skills whilst working for others, which will prove valuable when building your own business, so much the better. 

Security

What would happen to you and your family, if you were unable to work for an extended period of time?

You may well be entitled to certain benefits, as part of your employment contract, but will these support you indefinitely? 

Also ask yourself how valuable those benefits truly are? Perhaps you have a company car, medical insurance and 25 days paid holiday a year. Upon consideration you may discover that you could enjoy those same benefits for £250-£500 per month, if you paid for them yourself. In a worse case scenario, you could easily generate £500 per month in profit from a single property in your portfolio, which could be used to pay for these items, so that you can enjoy the benefits without ceding control of your life to your employer and the government. 

The bottom line is that if you derive either all or the majority of your income, from your own labour, you will face a serious challenge if you're no longer able to work for an extended period of time. 

If you build up a decent portfolio of incoming producing assets however, you will continue to receive an income each month, even if you're unable to work. 

To my mind, the true definition of wealth is being able to survive for an indefinite period of time, without having to work. 

Knowing that you will be able to continue supporting yourself and your family, in the event that you were no longer able to work, is something that should give you great comfort and a strong feeling of security. 

Focus on building your own financial fortress, on your terms and in a way that is not dependent on any 3rd parties. 

Financial independence constitutes strength and security. This is something that a property investment business can give you. 

Scaleable Income

People often use the term "Passive Income" in connection with property investment. 

In reality, this is rather a misleading term, which in this context is better phrased as "Scaleable Income".

It is important to remember that you're building a business. Businesses require management, which by necessity means there is work to be done and that the income derived from the business is not passive. 

In all probability, when you start building your property investment business, you will be on the front lines yourself and working extremely hard to get the business off the ground. Amongst other things, you will need to think about:

• Learning the required skills to build your business
• Connecting with all the right people, whose skills and services you will require
• Bringing capital into your business to fund your acquisitions and developments
• Putting business systems in place
• Building a team 
• Delivering a great service to your customers (tenants)

Whilst this may seem daunting and overwhelming, the wonderful thing about building a great business with solid foundations, is that you can derive a highly scaleable income from it. 

As your businesses starts to grow and produces increasing levels of profit, both in terms of capital gain and monthly cash flow, you will be able to re-invest those profits back into your business, to fund further growth and also pay for a team to run your business for you. 

In this way, you can work your way towards a point where other people are growing and managing your business for you, so that you're able to enjoy increasing levels of income each year without doing any extra work. In fact, the larger and more profitable your business becomes, the more freedom you can enjoy, as you will be able to pay great people to run your business for you, in a way that requires ever decreasing levels of input from you.