In today's episode we discuss additional ways in which you can turn your home into a cash-flowing asset. Make sure to tune in to find out how.
Following on from episode 15 where we heard examples from three members of the WealthBuilders community on how they have turned their home into an asset, Kevin and Christian reflect on some of the lessons learned, and discuss additional ways that you can turn your home into a cash-flowing asset.
Resources Mentioned In This Episode:
Rent a room scheme [UK] - https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme
Save A Fortune eBook by Kevin Whelan [Free Download] - https://membership.wealthbuilders.co.uk/free-access
Click Here To Find Out More About The WealthBuilders Foundation Programme
Links and a full transcription of this episode can be found at www.wealthbuilders.co.uk/wealthtalk
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Join the WealthBuilders Membership Site for Free and get access to free Wealth-building Resources: https://membership.wealthbuilders.co.uk/free-access
Unknown Speaker 0:12 Hello, welcome to another episode of wealth talk. This is Episode 16. My name is Christian Rodwell, the membership director for wealth builders and I am joined back with Mr. Kevin Wayland after week. How did you miss me? Yeah, how you feeling now? I'm feeling a little better devices just about recovering. But you did a great job last week, interviewed three wonderful people some great insights, I thought Yes, yeah, it was good. We, you know, we started to switch it up a little bit and hear from some of the members of the wealth builds community as the different ways that they're interacting with the assets and the Seven Pillars. So we kicked off last week looking at pillar number one, which was home capacity. Yeah. And it's great to have you back today, Kevin, because I'm sure everyone, you know, had some good ideas and thoughts, but it'd be great to hear some of your distinction.
Unknown Speaker 1:00
around what we discussed last week as well and I know that there's also other ways that income can be generated in that pillar as well. Yeah, I mean it's good the insights from from Bob from from Stephanie from Carol all really very useful did you pick any kind of threads out of that would be useful just to remind our listeners of and then I'll maybe go on to describe some of the other ways that other clients have done it too would have been inappropriate to get a dozen people on a webinar but but nonetheless any anything strike you what they were doing, obviously three different strategies. We started with Bronwyn who talked about you know, using the Airbnb model, so they went for a year traveling and use their b&b to let out their property and kind of put all their furniture locked away. Yep. And, and then actually also to do house sitting so almost on the other side of things going into someone else's house and looking after that and not costing any money, living rent free.
Unknown Speaker 2:00
She needs the money but you know living men free is a has a wonderful thought if you can do that, and of course she's in a position where she's able to do that anyway.
Unknown Speaker 2:10
Because you have to be in a certain financial position to follow your husband around the world. You know, not not really caring too much about anything else because what belies all of this, of course with someone like Bronwyn very smart, very sophisticated lady, is she's putting lots of systems and practices into a business. So they're managed without her being there. So you can't really take one pill on its own, Chris, it isn't the home capacity thing. That was the lesson from wrong when he was I've got my business sorted, so I can afford to do this. You know, so it's a different story, depending on different people. Yes, well, we, you know, had to pull pulling back a little bit because they often refer to some of the other pillars specifically, you know, pillar number two pensions because yeah, they they do it's time they do to do into mix and it's understandable. They get excited.
Unknown Speaker 3:00
pillar two and more about that when we get there because that probably almost as underutilized as the as the home capacity side. But yeah, it was good. Yeah. And then we obviously we heard from staff who again had a similar story and generating income from her home. Yeah through and letting that out. And then Carol's example was slightly different, which was refinancing a property in order to be able to secure a really, really good low market value deal with the, you know, Stephanie's was was very interesting. And certainly, I think, because she's got a London based property and you know, she does work internationally as well and her family from Geneva. So lots of reasons for her to want to be abroad too.
Unknown Speaker 3:44
But the thing about Carol, which was the lesson I would pick up, is you have to have a change in mindset. So if you remember, she came from a background of kind of financial caution. And I think she believed at that point, that
Unknown Speaker 4:00
Any form of mortgage debt was bad debt. And consequently took a little while to overcome our own feeling that there is some debt which is good. And some debt, which is potentially quite bad. But debt is just the double edged sword. You know, it cut both ways both ways. If you took her example, where she used leverage from one property, and was able to buy other properties, which you wouldn't have been able to get a mortgage on. So in other words, unmanageable properties, which gives gave her the enormous capacity to create more value, drive value, because she was really not in competition with other buyers, let's say, and then was able to very quickly pay that money back so that the debt position she was in was temporary. So she was moving her money around the different pillars. He was moving from property that she owned in a capacity to do
Unknown Speaker 5:00
leverage to them by other properties, which then rented out and created an ongoing income. Whereas if she didn't do that, she just lived in a property mortgage free. Not bad, but not brilliant thinking at the highest level. And obviously Carol demonstrated that. Yeah, kind of ties back into Episode 14, where we talked about becoming a value creator, and well flowing, money flowing. Yeah, absolutely. Always thinking about that, but always being willing. And what's great about listening to others experiences is you you can get a different perspective that you didn't have but somebody else has. And that perspective can make a difference to you. And, and I think they were great examples of that. But there are loads more in the way that people can use home capacity. If they can change their thinking. It's always about right under your nose, always the source of leverage, leverage, but people just don't get it. There's a there's a I don't know
Unknown Speaker 6:00
Muslim, an acceptance of what we've got as what we have and don't do too much about it so and the realization as I've said before, with own capacity often comes too late. So one example of where it comes my not too late, but very late would be love this one was one of my clients is a little older, I'd say so not like some of the interviewees the other day, but older, certainly into retirement realizing hoops, you know, the planning hasn't gone well. But we get introduced to them quite late, never too late, stop wealth building. And in that situation, this particular lady lives in New Heathrow, in fact,
Unknown Speaker 6:47
and has a great benefit. Of course, living near Heathrow, is, you know, lots of pilots, lots of people in airlines. And what we kind of worked out there was by creating a rather large annex
Unknown Speaker 7:00
To her property, so, the property had capacity in that capacity with space, but not in the existing property, you have to build on that. So,
Unknown Speaker 7:10
it was a very large L shaped annex. And that was built out. And of course, there was a huge demand for, you know,
Unknown Speaker 7:17
members of the, the airlines to occupy that space and serve two purposes really want to provide an income. So she wasn't redeploying that in another asset. She was taking the income and spending it you know, needed the money really. But the other thing is, it's kind of like a house as well, you know, you've got the opportunity to you know, have people around you because, you know, there's there's a connection between one part of the house and another and that's not a bad thing. So multiple kind of benefits in that one as well. Albeit, she came to the the property capacity party quite late in life. similar scenario, actually, at the end of last year, when I was writing my book and I went down to Dorset.
Unknown Speaker 8:00
lovely family home down there with capacity in their garden, right so they have usually installed or built like a wooden snug, and it was looking out over the fields and they had all the shade room It was lovely, good place to write the book. And that was extra capacity they had, which they've now generated in income from by renting that out again through Airbnb, you know, and there's a I'm going to see a business soon where the the very essence of the businesses the creation of wonderful, unique bespoke treehouses in parts of the country, which are, you know, of natural beauty. And so, you know, the capacity for the places themselves, and then the capacity for the business owner, to to find and negotiate places to put these treehouses in where people want to connect with nature and you know why they're not. So yeah, that's a good one. And there's there's many other smaller ones we could think of, you know,
Unknown Speaker 9:00
Again, I live in Wimbledon. So tennis is coming up pretty soon. All right, there'll be people renting out their driveway, you know, short live but nonetheless you know, an opportunity. I know.
Unknown Speaker 9:09
I'm a football fan and occasionally if I go to watch, you know, football games in London, there's always people renting out, you know, their driveway for football games. So there's always there's always something that can be done. I remember another one of my clients, Chris was
Unknown Speaker 9:26
live near to a dancing school.
Unknown Speaker 9:30
And from time to time, she she she let the space he almost like a b&b. So she created a home a little bit like a b&b. And of course, you know, there's a whole system the government recognizes that you can rent room. I mean, the rental room scheme has been going for years and years and years. And I think now the tax free amount is seven and a half. I mean, seven and a half thousand tax free. I mean, if you could, if you're the sort of person who's young or you don't or you wanted to
Unknown Speaker 10:00
company, or you had a spare room in your home? Why wouldn't you do that and then take that money that could pay for education to build your wealth, he could pay for a connection. He could even start to build investments in multiple ways where that money can be used to get that extra bang for your wealth pound if you like.
Unknown Speaker 10:24
So what can people do to build their capacity Kevin, or first become one, you can build it obviously, as logical, but I think if I look at one of the businesses that I work with, as well who property experts in my part of the world, in Surrey, and in Kent, and they're always looking and they've got wonderful software for it to almost sky scan every property in the neighborhood and they can see where there's just that extra piece of land, where they could negotiate with the owner of the land or the garden.
Unknown Speaker 11:00
turn that into an opportunity for income for both sides. And it definitely not unusual for mega clients, we've had a very large piece of land, they they kind of
Unknown Speaker 11:12
pave off one part of the garden, they might even go live in the smaller houses they retire, and then let out a larger property or even create multiple apartments or create a capital some. So there's so much scope within property, whether it's a smaller room as large as the garden. And just the conversion of something is a process of forcing and appreciating value. And that appreciation of value can turn into capital or income, both of which are the raw material of creating and building more wealth. And the key, of course, is always when you create that extra capacity to do something with it. Yeah, that's right, unless it's too late and then you the very act of doing that creates the income you spend. But it's better if you could
Unknown Speaker 12:00
it on your wealth building journey now. So that you take that money, you deploy that. And that's why the pillars are interconnected. So the lessons I would say, for our listeners is don't just take the lesson of home capacity. Because if you don't have a home, you don't live in home, or the people do. You know, so that software that I mentioned, it's possible to get that or I've got another client who rides a bike everywhere
Unknown Speaker 12:28
instead of getting in a car rides a bike and he's looking for small plots of land or something that you know where the roofs are not aligned where you could say, well hang on a minute there's there's they're using three stories next door, why can't we use three stories here and then add the negotiate with the, with the owner of the property to upgrade it and certainly on commercial property, but as well as buying properties from landlords and converting them into HMO is a multi unit property. So the scope is only is limited
Unknown Speaker 13:00
Only to your own imagination. And because there's like how much you so many ways you can create revenue from land and from property and from spaces inside and outside. So it's just a huge, huge, huge opportunity, rather than just sitting and
Unknown Speaker 13:18
in your property, but I think you probably were meaning something else were you when you said how do you create capacity. But there is a way you can create it if you don't have that imagination or you don't have the time. There are ways of course that you can take if you've got a property now, and you want to do like Carol did, which is quite leveraging that property is to start finding ways to build the equity in your home. So if you got a mortgage if your house is worth 400,000, your mortgage or 200 How do you create more equity, and there are many ways and I wrote a book on that called save a fortune, how to completely eliminate your mortgage loans and credit cards past and in that
Unknown Speaker 14:00
Book Pro 12 secrets to building more equity in your home. I mean, I could mention two or three, but I'm not going to get into 12. Or why don't we put the link for people in the show notes so that if they want to read get a copy of that, and yeah, yeah, yeah,
Unknown Speaker 14:14
I love that. So let's do that. Happy to do that. But let's take a couple of examples right now. Yeah, I mean, I suppose one is
Unknown Speaker 14:25
I'll give you three. Okay. So one, whenever you can shop around for the lowest interest rate, that's true of all that. So that applies in any situation. So if you can get to a place where you're you've got a trusted mortgage broker, and we've got lots of those we trust and you can shop around for your mortgage and you constantly constantly constantly paying the lowest rate, the lowest rate, the lowest rate,
Unknown Speaker 14:51
then every time you save money on the mortgage, pay a higher level of money to the mortgage. So
Unknown Speaker 15:00
That you're building equity, because sure is x is x Chris interest rates are going to go up at some point.
Unknown Speaker 15:06
The second would be one of the ways I used absolutely was brilliant A long time ago now was connecting money that you own to money that you owe. Now, what does that mean? Well, it means there are many mortgages, where they're called offset mortgages. So you can have money in savings.
Unknown Speaker 15:28
But you want to keep, say, for rainy days or for all sorts of reasons we mentioned before, and the mortgage but the money talks like a virtual calculator saying click click click, you've got this much in savings for you're paying less interest. And as a result, you pay off your mortgage more quickly.
Unknown Speaker 15:46
The third one is always make use of extra streams of income or windfalls to eliminate your mortgage of that your preference. So for example, if if you get a small inheritance or if you
Unknown Speaker 16:00
Get a pay rise. Or even if people work with us as a some kind of referring capacity and they receive regular payments from us, it'd be thrilling for me to know that checks that we send to people, every single month, have been used to pay off their mortgages or build their wealth. So there's ways to become an affiliate, there's ways to create value from what you're doing day to day in your life. So whether you just shop around to the lowest interest rate, you connect your money and your income, or you find other ways to get a small windfalls small streams of additional income however you do that, and take that money and deploy that in ways that build your equity. Then, of course, you could re mortgage at a later date to take some of that equity out to do what Carol did, which is to buy property or whatever else you want to do. Yeah, there's anything else that we haven't covered around pillar one. Would you say Kevin?
Unknown Speaker 16:56
I think we're just about done on pillar one, but would be great, though.
Unknown Speaker 17:00
Because we're always open minded for new insights, don't we? What is one of our audience done? You know,
Unknown Speaker 17:06
who's done something that we haven't mentioned? You know, we've mentioned probably 20 things over the course of the last few podcasts on pillar one, which is using your home to create more value more leverage more income or capital. What have you done? I'd be thrilling to know that because then we could bring them into a case study in some point in the future, certainly give the lessons that they've learned to others, because we're always learning. Yeah, you know, I, you know,
Unknown Speaker 17:33
I look for every, every day is, you know, I talk about that ROI, that euro was one relationship opportunity, your idea for something completely changing, and I genuinely look for that every single day. So while I'm normally the source of inspiration and education, I'd love to get it back. Because then you go, Whoa, how can I share that? You know, so, yeah. And if you're listening right now, and you have got an example you're thinking, Hey, you know, you've not talked about this idea or
Unknown Speaker 18:00
I've done it slightly differently and had a great result, then please do leave a message. Easiest way to do that would be to head on to wealth builders.co.uk forward slash wealth talk, you'll see an orange button there and hit that it's called speak pipe. And you can leave us a short message and tell us what you've done. And of course, we have the wealth builders Facebook group, where we have just under 1000 members, we're so close to hitting that milestone there. And you can you can share your experiences and learn from lots and lots of other wealth builders in there as well. Okay, so I think we should be looking at pillar two next time editor is pensions. Yeah, it's the one that you know mass majority of the population in the UK depend upon, but they use them so poorly in the pOH so poorly served, and I'll cover lots of reasons why that's the case and why actually, you know, we can fill rooms now. With more than 150 people excited for the
Unknown Speaker 19:00
First time ever in their life about pensions, I'll share stories of people who discovered money in the hundreds of thousands they didn't even realize they had they pushed it to one side and thought I don't have anything. Kevin, have you checked? Have you checked and when they check, they find there's money and I'll share those stories as well. Yeah. So we'll have some more members from the community sharing their experiences and looking forward to that one. Thanks for today, Kevin. Okay. I'll be feel better soon. I will do
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