ASK490: Does The Ultimate Property Strategy still work? PLUS: How do I escape spreadsheet hell?

0:02Hi, I'm Rob. And I'm Rob. And this is Ask Rob and Rob. Welcome to Ask Rob and Rob, the show where we enhance your knowledge of property, all thanks to some brilliant questions sent in by our listeners. We've got another two great ones coming up today, as we do every week. And it all works because you send in your questions and you do it like this. Yeah, you head over to propertyhub.net forward slash ask. There you'll be presented with a wonderful buffet of options. You can ring up and leave us an answer for a message, or you can leave a message on your computer. And if that was enough, you even have the option to try and get your question in the Sunday times by writing in.

0:41Whatever you prefer, it is all in that link, propertyhub.net forward slash ask. First up, we've got a question in from Dan. Hi, Rob and Rob. Thanks so much for allowing me to post a question. I'm Dan. I'm from Essex. I've recently been reading your books and listening to this podcast. It's fantastic. Really helpful to get someone into property and thinking about other investments. I've always been an investor. I've always invested in stocks and shares and SIPs and other commodities such as gold and recently have been diverging into property, particularly trying to make use of the power of leverage.

1:20and I was really taken by the ultimate property strategy. And due to being a high earner, I find it more tax efficient to hold my property in a limited company rather than to hold them in my personal name. And I had a query, and I think the ultimate property strategy, as you said, where you would draw down by refinancing to have an income, that wouldn't necessarily apply to somebody with their holding property in a limited company and just in their personal name. But I did wonder if there is a version of that for people who have property and limited company instead. Otherwise, of course, the more simpler strategies, as you mentioned, probably become far more appealing.

2:02But I'd just be interested to get your perspective on this and if I've read that correctly. Thank you. Dan, thanks for your question, ultimate property strategy. It's been a while. So first of all, what is the ultimate property strategy? Well, that is an episode and a half in itself. But essentially, it's paying yourself with debt. Sounds a bit crazy, but with the detail, it makes complete sense. So why wouldn't it work for limited companies? Why can't you just pay yourself with debt for a limited company? Well, you'd be doing that through a director's loan. So you'll be loaning money from limited company back to yourself, which you can do.

2:40But you probably need to pay a bit of interest on that, which is fine. Interest rates are low. but you also have a limited time on how long you can take that cash out for before you need to repay it. So as it was, the ultimate property strategy doesn't really work in a limited company. It still works if you buy in your own name. And for some people, they do do that and it's the right thing to do. And that is absolutely fine. And it's still a great strategy. So if you do buy your own name and you do want to understand it as a tax strategy, the links are in the show notes. But what this has prompted, Dan, and thank you for your question, is us thinking about, okay, what are the more advanced tax strategies that we can discuss on the podcast?

3:17So we will go and dig those out. We'll go and speak to experts. And in the coming months, give us time, this is not something you can do quickly, but in the coming months, we will put an episode together on more advanced tax strategies. So look out for that one. But appreciate your question, Dan. If you've made this come up with some episodes, that's going to benefit everyone. Okay, let's move on to our second question now. This one's from Maggie. Hi, Rob and Rob. I'm Maggie. Thank Thank you so much for the brilliant content you share. I've been listening for a year now since starting out my property journey in earnest.

3:46You've been a huge help. We're just about to complete on our second flat using the BRRR strategy. Our next step is to do a few flips to build up our pot and also gain more development experience. The ultimate goal is to build an income generating portfolio as quickly as we can, probably including a HMO. I absolutely love finding and analysing deals, speaking to agents and builders. I even enjoy overseeing refurbishment so that's not my strongest area. The bit I really struggle with is the admin side of things. I've been diagnosed with ADHD and every time I sit down to do spreadsheets I fall down the rabbit hole and lose track.

4:28So I'd love your advice on how to stay on top of the business side of property. specifically I'm looking for a spreadsheet to track refurb costs and manage property project budgets a spreadsheet to analyze and forecast cash flow and performance both for individual properties and across the whole portfolio and also help with keeping on top of bookkeeping invoices and banking we've put our properties into a limited company we have an accountant and we're approaching our first year end. We also use a basic business account with a well-known online bank, which offers a range of accounting tools. But I'm unsure if these are worthwhile or if we should just stick with what our accountant offers.

5:11How do you guys manage this side of things? How much do you get your accountant to do? And would you recommend using the bank's admin tools? Any help or even a spreadsheet or two would be hugely appreciated. And thanks again for all the support and wisdom you share. Thank you for your question. It's something that a lot of people struggle with. And my suggestion is probably not going to come as a surprise to anyone who's been listening to the show for the last couple of years. But my answer is AI. AI is becoming my answer to everything. But there is a reason for it because I think it's a real gift to people who, like you, like many people, just don't enjoy that spreadsheet-y, analysis-y side of things.

5:50I mean, you said you enjoy analyzing deals and that's great. but then the actual spreadsheeting out tracking it all that kind of thing it's not everyone's thing so i can help you with this massively and you can use the conversation mode to do this as well so you don't even have to be able to write down in a structured way what it is you're trying to do i often do this where i'll just talk and just kind of like verbally brain dump what it is that i'm trying to do and what i'm thinking about it and then it is great and then taking it and structuring it and figuring out okay here's what you should be doing and it can even build the spreadsheets for you so you can work with it to figure out okay well what do I really want to be tracking here what's the best way of setting this out and then depending on your needs depending on the tool you're using it can either just flat out build the spreadsheet for you or it can describe to you how to set it out it can write all the formulas for you so you don't really need to have any abilities in that regard the other thing that it's great for is analyzing data so I wasn't completely clear from your question but it sounds like you're doing your own bookkeeping you've got an accountant but not a bookkeeper.

6:49If that's the case, especially if you're doing refurbs and there's quite a lot of transactions going on, I would consider getting a bookkeeper involved because it might only be for a few hours a month. It's not going to cost you that much. But if you use a tool like Xero, X-E-R-O, you're asking about tools for this kind of thing as well. If you use something like that, they can log and categorize all your transactions in there. And then once they've done that, Xero can spit out reports in any format to show you what's what. And then once you've got those reports, surprise, surprise, you can use AI to analyze them.

7:17So you can stick the output into ChatGPT or whatever and say, what do you notice about this? Where are the opportunities for improvement? All this kind of thing. And because it's not relying on you sitting there, going through it line by line, really analysing every cell, it might just be that doing it in this more conversational, chat-based way works better for you. So in your case, that would be something I'd suggest looking into. You ask what we do. In my case, I have a bookkeeper. I have an accountant. because my strategy is more long-term hands-off. I'm not able to look at it in the same way that you do for your strategy.

7:50So I'm a bit more remote from it, but I really would look at getting a bookkeeper involved because accountants tend to be good at keeping you compliant and filing what needs to be filed and maybe even doing more backwards looking stuff. But for you, what you want is forwards looking and you need to be looking at the most up-to-date data and being in a position to do something with it. So the key there is having it put into a format that you, maybe with AI, can do something with. so maggie thank you for your question hope that helps and good luck well that's just done for another week thank you dan thank you maggie for your questions we'll be back next week answering more of your questions until then take care have fun bye-bye