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The REAL Power of Leverage

If one was to ask one of the many buy to let investors in this country why property is such an attractive asset class, over other asset classes, somewhere within their answer would be the term leverage. The ability to leverage, the ability to borrow from the bank, or other lending institution, and put in a small amount of your own money but take full advantage of the upside in either capital value increases or profit on a project. That's what leverage is all about.

I've often said, and truly believe, that property, particularly development, can be the ultimate test for any entrepreneur. Take a development or refurbishment project for example. You need to source an opportunity, research it, appraise it, raise the money to
do the deal, possibly navigate the planning jungle, manage the construction and professional team, deliver the project on time and on budget and then successfully market and sell the units to realise a profit requiring many skill sets to be successful. There are, in my opinion, easier ways to make a profit.

When one chooses a career in banking, recruitment, construction or marketing, one is leveraging their company's experience and track record within the market place to further their career and reputation. This is done all the time in the 'professional world'. Why can't you do the same in your property business? In my experience of working with buy to let investors for the past fifteen years it can be a lonely place to operate, both physically and mentally. Advancing one's property career by either joint venturing or working for a more experienced developer or investor for some time seems to me to be the fast route to success.  

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