James: What is up everybody? Welcome back to the Dentists Who Invest podcast, where I am sat opposite, familiar face on the Dentists Who Invest podcast, Harry Singh from way back in the flipping day, Episode number one, I believe. Harry, our catch up has been long overdue. How are you, my friend? 

Harry: Yeah, no, really good. Thanks for inviting me back again. As we said, it seems like it was yesterday when we recorded. Podcast in the back of your bedroom. Obviously I wasn’t there with you, , and it looks like you upgraded your office now it looks middle of Cane Wolf. Yeah, 

James: It’s cool, isn’t it? It’s my flat, but this is not the private quarters.

This is the kitchen there this time. But I’m actually, interestingly, I’m actually moving back to Ireland in a few weeks, so I’m gonna have to same up for wells to this place rather shortly, unfortunately. How have you been watching you in your life since we last? 

Harry: Yeah, no really good. Time flies. So as you know, I’ve got Dental Property Club, BTC Bot Toxin Club and our Aesthetic Clinic. So yeah, what we did was we changed location, got a new high street location in Steamless heart Forsure really big premises, but we also do our training here as well, so no hotel venues, et cetera. And it’s really good having a dedicated office. One, the wife’s happy cause I’m outside away from the house.

But yeah, I’ll see more. Production being done more productive because got dedicated office going here’s work mode straight away. And also like you, I’m quite sociable, like to banter with a team to see them every day. And compared to at home, I found it quite hard to work from home. Too many distractions, but also kept on eating, putting too much weight on with all the biscuits and cakes there. So my, when my kids were younger, I could blame their kids cause they were only four and five. They couldn’t speak. But now they can answer back. No. Daddy nicked all the food. Not so is good there. So yourself busy? 

James: Yeah, Always busy.

Always busy. My friends, yeah, things are really going places. I’m really excited to see what the future holds. There’s a lot of stuff coming my way. And the biggest, I feel like the biggest. One of the biggest skills, or one of the biggest tasks that you have is managing it all and also getting good at delegating as well, which I used to be not so good at whatsoever.

I used to try to do everything but the upper. The fact is, you only have 168 hours in the day, and if you’re spending, you know, a few hours doing the unnecessary stuff, whereas you’ve got the bigger. The things that you can delegate versus the things that you have to do yourself. That’s actually a skill in itself and I’m getting better at it.

Super cool that I saw you were hanging around with none other than Richard Branson not terribly long ago. I feel like that’s a flipping Dentists Who Invest podcast with happened. Can you, can you pull some strings there, Harry? 

Harry: Yeah, maybe, Maybe. You never know. I tried again to have some Botox. He wasn’t too keen there, so Yeah, no, it was a, yeah, it was a really good experience.

Last December, the biggest hurdle was getting my wife’s permission, cause obviously he’s freezing in winter December and I’m going to the Caribbean and the British Virgin Island in Bermuda, shorts and Hawaiian shirts. I think I had to borrow a couple of your Hawaiian shirts, didn’t I? 

James: I’ve got a few spare. I’ve got a few spare. 

Harry: Yeah. But no, it’s really good like you. I’m a big believer in networking. So the circles I was hanging around with they had this private week organizing. They kind and they needed 50 people. So they got me involved. But the hardest part, you’re not gonna feel sorry for me is getting there.

So you go from London to Antigua. I spent a couple of extra days in Antigua just to get a customized and tell the wife it was extra from Antigua to you go to Beef Island and it’s like one of those small planes. It’s only 12 seats. I, I’m quite good at flying, but like I was shitting my load on this.

It’s like every cloud I went through is that turbulence that times 10. And that the pilot was quite funny. He was on his mobile phone all the time, so like he didn’t really. But once you get to Beef Island, you take a boat to Necca Island, and this boat’s going up and down, up 20 feet into air. I was also sick about three times.

Then once you finally get to Necca Island, oh my God, is that paradise? And it’s a bit like life business investing. You are gonna get ups and downs. It’s not gonna be a smooth wide all the way through, but once you reach your end destination, your final goal. It’s all worth that sacrifice our effort. 

James: I love that metaphor.

That is so cool. What’s Richard like in the flesh? 

Harry: He was meeting us for breakfast every morning. He’s really interested. And like we say, there’s always be interested in the person, be more interested on them, and he’s really interested what everyone was doing, et cetera. But no really for, but he, he trains three hours every day.

So he has one other… 

James: God, He’s huge. He’s, he’s actually huge, like his arms, he’s massive. Like when I saw him in that, you were in the back of the golf caddy and he was like, you could just see his back and you’d like a little selfie, right? Yeah. And I was like, Does Richard Branson work out? Because he’s a big guy.

He’s a big guy.

Harry: Yeah. He plays two hours of tennis. So what he does, he plays one out of tennis on one court. Then the other court is about three quarters a mile away from the other part of island. So the tennis coach gets a buggy to go there. He swims. To the other part of the court. Then he has another lesson, then he has one eye in the gym.

But no, Yeah, he’s super fit. And then as we always say this, yeah, you could be the richest person on earth, but if you’re not gonna survive or live that long cause you’ve got unhealthy habits. But he’s that token that where yeah, health and business has to go together. 

James: You, you’ll often find that about very well, not even necessarily very wealthy CEOs, but definitely CEOs, you know, that they actually take time outta their day to prioritize their health.

And the thing about it is I used to be a real stickler just for sitting on the laptop. 15 hours a day. Right. And doing that and not doing anything else. And actually for me, because I really enjoy that, it’s harder for me to not do that than do that. Right. Which is not con like I appreciate, it’s not everybody’s idea of fun.

Are you with me? Yeah. So what I had to do was I had to actually say to myself, No, James, out of your priorities, you actually need to prioritize your health even more, even though you find. Even though for most people that’s easy and that’s hard for you. That’s where you need to go. Okay. Yeah. Yeah. And the way someone explained it to me once was, Okay, well actually there’s two little, two little anecdotes I’m gonna quickly share on this one, right?

The first one was, you can make as much money as you like, but when you reach that end point where you’ve hit your whatever it is, your retirement figure is, if you have no health to actually enjoy it, then what the hell was the point in the first place? Yeah. And then the second thing somebody said to me was, this was from my pte, and he said, James, you’re a dentist.

How important it is? Is it to you to brush your teeth when you hear about someone not brushing their teeth? Right. How crazy do you think that is? And I thought it was pretty crazy, cuz I’ve seen that so many times. Yeah. And then he was like, you know, whenever you don’t exercise, It’s like you not brushing your teeth except for your body.

And you know what, that always stuck with me cuz now I was like, it’s insane, you know, to get out of your bed and not brush your teeth, you know, it just saves you so many problems further down the line. And it’s exactly insane that when he put it like that, I totally grasped it. I grasped it before, but I grasped it on a whole other level.

Harry: Yeah. And I was like, You, I’m a workaholic. And because you love your work so much, you don’t take any breaks. . 

James: This is fun. Like seriously, you know, this is because it’s fun. It’s harder to not do this, than do this. I do, for me personally, and I always feel as well, you know, again, we’re gonna, we’ll pull this conversation back to where it’s supposed to be, which is on the topic of ours, very short.

But yeah, Pathway of the entrepreneur, you know, I actually feel like it has to be whatever the thing is that you choose, that you wanna put your energy into, it actually has to be fun as a prerequisite versus doing something you don’t enjoy. Because the thing about it is you can only actually put 18, 19, 20 hours a day into something, which is 100% necessary, by the way, if you enjoy it.

Cuz if you have to spend energy on those 18, 19 hours a. Then you have to recharge at some point and there’s not enough hours in the day to recharge. Whereas if whatever you do gives you energy because you enjoy it and you find it fun, then guess what? You get more energy on it to put back in. Yeah, and it’s like a positive feedback cycle.

Harry: Perfect. Yeah, definitely. Yeah, 

James: 100%, man. Anyway, Harry, speaking about your passion property is what we’re here to talk about today. The property market at the minute is looking a bit bubbly, just like, I mean, just like flipping every market, you know? I mean, I get it that there’s been a bit of a correction recently, you know, but things were pretty overvalued. What are your thoughts? I mean, I bet you get this question. I’m flipping million times a. Good time to buy. Time to buy. 

Harry: Yeah. Dentist go, When? When can I buy? When can I buy? When’s the best time to buy? I go. But if I knew exactly from the date and ever, I’ll be a billionaire. So if anyone says exactly what they know’s gonna happen in the future, one a mile from them there.

So, but obviously we can talk about what’s happening in the past doing lockdown. Everyone thought because there was a non-economic recession that price will go down. And there was a combination of factors of the chancellor getting rid of stamp duty holiday. A lot of people in my area that were moving from London to Har for sure because they didn’t have a garden there was stuck at home.

They wanted to have a garden and moved to more rural areas where our prices went up. So there’s a combination of factors where, just a fake bubble where people paying 10 20. So they were saving 5% on stamp duty, but paying 10, 15% more than the market value there. So it wasn’t a good time to buy. Very good time to sell.

So if you had any properties to offload, That was the perfect time. But what we did find, the vents stabilized as well, so I thought the vents would be going down, but actually our events did stabilize cause there there were gonna be some people that could never afford to buy anyway. So the vents stabilized and actually because we had good quality.

Cause I always talk about. People talk about their long term plan, one by a property three shape value in 10, 15 years time. That can only happen if you’ve got good tenants. So we are very strict with our tenants and even doing lockdown where some of them lost their jobs. We are very proud to say with over 30 properties, we didn’t have any defaulting rents from a single actually offered to say, Oh, if you’re struggling, you can do like your rent for three.

No one took it up. Every single tenant paid on time there, and that’s what a lot of property investors forget is the quality of tenant that’s gonna give you that financial freedom over the long term. 

James: Do you know what would be super cool? Obviously that’s something that’s planned out pretty well for you, given what you’ve just said. What is your performer, What is your method of selection for those tenants? Or if there’s like a really precise, you know, detailed take would, would take like 20 hours to explain process. Even if you can just explain the main points or the main parts, I think that would be so valuable. 

Harry: Yeah, so what I’ll do is, let’s say I’m investing in a new area. I will go and visit every single letting agent and pretend to be a tenant. Say, I’m looking to rent a property. Then I see what process they have. Do. Are they polite? Are they Curtis? Do they show me the properties I want straight away? And then I never, ever agree to obviously rent a property. Then I want to see what their follow up is like.

If they don’t follow up, I’m not gonna use them myself. If they phoning me every two other days, go, Are you interested? You’re not interested in that one. We’ve got this one, which are very proactive. Then I’m gonna pick that net. So B, put yourself in the shoes. A tenant, are they, do their marketing property world, do they show you?

Are there time do that timekeeping and do they follow up? Are they really practicing? Cause if I’m gonna put a property with them, I want them to go guns blazing to get me a tenant as quick as possible. So once I’ve chosen my net agent, The second thing I do is we go 15, 20 pounds below the market rent.

Cause I, I rather have 50 tenants to choose from than only five. So let’s say events, 900 pounds a month. We’ll put it on for 8 75. We will get 50 to 60 tenants and then we’ll pick the cream of the cream, pick the best ones. So proactive letting. And you can be greedy and choose from one out of 50 tenants.

James: You know? That’s so cool and so interesting. And even though property is not really my bag and a little bit about it, you know, from secondhand information, I actually think that applies to business as well. I would rather spend. You know, there seems to be a risk to the bottom in terms of wages and things like that. And if you’re paying somebody 14 pounds an hour versus 13 pounds an hour or whatever, the 13 pounds an hour is like a badge of honor. But I’m like, I’d rather pay someone 14 pounds an hour, who’s gonna put twice the effort and then generate me twice the profits. You know what I mean? And it just, it’s totally like that. It’s a false economy. I love that. That’s really cool. 

Harry: I was, yeah. One of weren’t expecting to talk about that, but it is . 

James: That’s cool, man. I love that. No stuff like this is what makes the content valuable and you know, people who are the property, there’ll be all areas for stuff like that. So from our last podcast, I remember you talking that broadly, there are two reasons that you’d invest in property.

One is capital appreciation and the other is rental yield. 

Harry: Yeah. Yeah. Maybe good.

James: What you’ve just said about the market, How does that affect the investors who are interested? In investing based on either of those two metrics, as in, let’s say at the moment because things are bubbly. Maybe you want to gear your investments more towards rental yield, or maybe you want to do less rental yield. I’m not sure, and I’m curious how the current market situation affects what we’ve just said. 

Harry: Yeah, so we are expecting, never guarantee, obviously a dip in the price is a correction to property market. So obviously you going back yet, if you investor capital appreciation or cash rate, let’s go back. If could, there’s two types of people that getting to property investors or developers or sellers.

So with the price, price correction is not gonna be a good time to be a developer or be selling properties because you’re going against the market plus the cost materials are so, It’s gonna erode all your profits, so you’re gonna be holding for the long term. That’s the first thing. Then capital appreciation’s never guaranteed.

I always go for cash flow, but that is gonna be so important in the next two to three years. You want to be gained for high yielding cash flow properties more compared to capital appreciation because we’re not gonna get much capital appreciation and what we found in the last session or that last session, When prices go down, rents go up. So for example, in Steam Edge 2008 when you were still school in, weren’t you James? 2008 ? 

James: Probably. That’s hilarious. Actually, I think I just finished high school. How crazy is that? 

Harry: So 2008 average fee, bedroom, house, steam edge, I was getting rental. 750 pounds, 2000. One year after the recession, still, during the recession, we were getting 1200 pounds.

Rent for that same property, seven 50 to 1200 because people were scared to buy. They want to offload their properties as quick as possible. Cause they fought the recession was gonna last forever. So more people end up renting because it’s not enough properties. You can increase your rents. So it would be a really good time for those long term investors or cash flow. To really get good yields, and actually I saw an article this morning where rents are going up by 10% in the last six months. 

James: Wow. Okay. Food for thought on that one. Do you hold most of your properties in your personally or through your limited company?

Harry: Good question. So obviously when I started investing 2002, we could claim the August interest. So most of mine are in my personal name actually with my wife. Because you get the capital gains now. So if I did suddenly properties, I get two lots of capital gains tax allowance there. I know so many dentist come up to me and say, I’m to hide the properties from my wife i’s gonna buy under my money.

You can’t hide anything. They’ll soon find, they’ll still find out there. So makes a difference if you, it’s there to buy under both names there. So going forward depends on your tax situation. This is the second most common question we get asked, or dentists hate paying too much tax there. So if you don’t need the money, Actually, let’s give a caveat first.

Obviously I’m not qualified to give you account advice, seats, professional advice. So generally speaking, if you don’t need the money from the property portfolio, then limited companies normally better because you can claim the tax relief of your mortgage interest. Mm-hmm. , if you do need a cash flow by reducing your commitment to density and you do need to cash, personal name may be better. Or if you are a developer, Selling property personal name would be better because you get the capital gains tax allowance of, let’s say it’s 11 grand per year and you buy with your wife. The first 22 grand is tax free, which you don’t get with a limited company. The other question we get asked is, I bought under my personal name, is it worth by me transferring to a limited company you are gonna have capital gains tax and stamp due to pay.

So for most people, it’s not worthwhile transferring, especially if there’s been a lot of capital. In your portfolio’s. Not worthwhile transferring, but obviously each situation’s different. Seek accountants advice on what is best for you. 

James: And then, I mean, off the top of my head, so the 12,300, the capital gains Alliance, and then share between you and your wife, obviously multiply that by two capital gains.

Maxes out at 20% anyway, right? Yeah. Corporation tax is gonna max audit like flip and 25. In the not too distant future, you know what I mean? You know? But of course. But of course on the flip side, well, where I’m, what I’m gonna guess most people say is it’s easier to accrue more money in a limited company.

You know what I mean? Yeah. Because obviously the tax implications of actually having the money there in the first place might mean that it’s easier to keep it in there and then buy our property. It depends where the money is as well. 

Harry: Yeah, yeah, yeah. So, yeah, so you can buy and also their buy net mortgages are much more ER to limited companies, which they never were at the beginning.

Yeah, so with capital gains we probably got 19% and 29% depending on your tax bracket. But yeah, there’s pros and cons with each one. There’s no, unfortunately one answer that is straight for, there’s one answer that is gonna be applicable for everyone, obviously, secure advice. 

James: What was that thing on the 19, 29% ?

Harry: Yeah, I’m sure for many, Cause obviously I’m sold, I’m sure it’s 19 and 20, 29% capital gain tax, depending. 

James: Is that specifically for properties? Because

Harry: Yeah

James: Right then. Okay. Yeah, yeah. Okay. So it’s slightly different than what I said, which is something interesting that I didn’t know actually. Cause when it’s assets in your personal li like stocks, paper assets and things like that, it’s 10 and 20. 

Harry: 18 and 28%. Yeah. So that changes things. Yeah. So Cause obviously, yeah, with assets and businesses is a fixed rate, but with property, the government obviously always gets you. So yeah, if you are a lower tax bracket, 18% higher tax bracket, 28%. But then if you bought under your personal name or joint names with your wife, you get a first say, 24 grand tax free. Yeah, 

James: That’s interesting. That is very interesting. What about spv specifically? Would you recommend using those? 

Harry: Yes and no. We do use them when we are doing developments and individual projects because then it limits the liability to that particular project.

Obviously you’ve got weigh in, obviously the extra admin charges, setting up the company account, see fees, and obviously having that in the public domain there. So for my long term properties by today, I’ll keep it simple. For individual, especially if we’re using external investors and outsourcing funds, then we will have a separate SPV per project.

James: Interesting. Okay. So maybe not something you’d recommend for the beginner. 

Harry: Yeah. Yeah, Because obviously, Yeah, and then also what we’ve noticed is mortgage lenders don’t like you being directors of too many limited companies. So obviously they’ll do search for you and see like you’ve got 20 SPS and 20 other limited companies that go, There’s not a liability on this. 

James: Which, which, which makes sense in a way because obviously someone who’s done that. Attempting to spread their risk as much as they can. And it suggests that they’re less bothered about every single individual one rather than the one that they do have that has their whole portfolio in there or their baby.

Harry: Yeah. And the trick is not to, One of my mentors said, you don’t have to be a director of every single limb to come here. As long as your majority shareholder, you’re fine. You’ve got the same rights. Everyone thinks by being a director, they’re gonna be top dog, but sometimes it actually works against you being director of too many limited companies.

James: Interesting food for thought on that one. That’s super cool. What’d you think interest rates are gonna go next? I know you said you didn’t have a crystal ball earlier. . 

Harry: Yeah. God, the way they made announcements this week on inflation, they have to go up. Well not have to, but it would make sense, You never know, cause obviously everything’s political, but obviously in choosing a new prime minister, they may not want to, I know it’s independent, they say with the Bank of England, but there’s obviously some kind of pressure was put by government, but where in the average for the uk the last say 56 years has been around five and a half percent.

So we’ve had a generational people that are used to thinking this low rate is normal. So I’m expecting it to go up and for my strategy and what we teach to our students, we want it to go up because then we can get these bargain properties where we’re not taking advantage of people, we’re saving people, getting repossessed and bad credit history.

But we are looking for those motivated sellers on bargain property. So yeah, short answers. Yeah, I expected to go up. Is slow. I think it would be slow, no 0.25, no 0.5% increases. And I expect by the end of 20, 20 feet to be up by another two, 2.5%. 

James: You know what, I asked that question, but I was totally conscious that it was a massive curve ball.

So, but thank you for that answer. But here’s the thing. You know, when interest rates, it actually gets really, really, really deep into financial theory. And we’re in a bit of a weird moment at the minute. Okay? Yeah, because there’s only really two ways that go, does 2 million ways a central bank can stimulate the economy, right?

Interest rates and printing more cash. Okay? Put the interest rates down. Everybody wants the land. There’s more credit floating around. And then the economy gets a bit of a boost, right? Because more people are buying things and assets and what have you, and everybody looks richer as well. Okay. Because some of that credit makes its way into the stock market and property.

Okay. Yeah. So generally speaking, as time goes on, they basically, they boost the interest rates when they need to pull off inflation. Then they hike the interest, sorry, they decrease the interest rates. When they need to stimulate the economy, but the overall trend has been this tangent. That’s downwards, and close to zero.

Okay? So when it does get to zero, and they’re basically all out of options. If they need to boost the economy, the only other thing that they can do is print cash. Okay? The thing about it is if you begin to put the interest rates up too much, again, you stifle the economy. So there’s only really one area.

Like area of give, and that’s the boost. That’s to print more cash, but that also drives property prices. But here’s the, here’s the thing, no one really knows. That’s the theory and you, you, it’s, it actually gets a little deeper than that still. Okay? Because it’s related to the government’s debt and there are other methods that you can decrease debt and then therefore have a little bit of scope to put interest rates up.

So basically, long story. Who the heck knows.

Harry: Yeah. No one. Yeah. And yeah, if just before the lockdown or doing covid, everyone’s betting on property crash and op property price amount by 30%. So who knows? . 

James: Exactly. Interesting one. Cool. Well, well actually, actually, here’s the one thing we do know and history is history has always proven. If you buy and hold and you buy and forget about it, you’re always gonna make money eventually. 

Harry: Yeah, yeah, yeah. That’s it. In a normal cycle, people say to me, Oh, when’s the best time to buy? I say, 20 years ago. Second, best time to buy is today. 

James: There we go. Boom. Awesome. Harry, lots of flipping gold dust in there about property. Anything that you’d like to say? We’re coming up to 40 minutes tonight. Anything that you like to say to wrap up to any would be potential property investors in the audience? 

Harry: Yeah, so basically ignore the news, ignore the recession, , you know, your, especially the people doing property, invest, you know, your local market and become best friends with this state agent because they will be the first signs of a two recession because do, I’ve got my relationship with this stage in steam for about 20 odd years doing lockdown where pricing went up.

They were ignoring my phone calls, ignoring my emails because they had so many buyers. Now they’re phoning me up. Because the market slowing is taking longer for them to offload properties. So that is your, and they will be free to six months ahead of anything that the editors print in the newspaper.

So people that are underground paving the payment, they know what’s going on. So be best friends with your estate agent. Once they start phoning you, giving you deals, you know the market is slowing. It’s reversing into, from a seller’s market to a buyers market. 

James: Virtually like every other asset then yeah, by the signs of it, you know, there’s that send on Wall Street. When your taxi driver starts asking you about an investment, it’s probably time to sell if you’re in that investment. You know what I mean? Because what that means is that word is disseminated throughout the public that this is a particular pot area. But if you think about it, right, there’s only so much money that can flow into so, Until basically it runs out, and then that upward pressure of buying no longer continues and something collapses under its own wet, and property is no different.

The one thing about property though, is that it’s not as, It’s obviously not as liquid, isn’t it? You know what I mean? Whereas with shares, it’s like banging, volatile up and dying every single day. But as I say that, still the thing that I, the thing that I just said just now still holds true as, as it does of course, across any asset.

Guys, anybody who’s listening to this wants to reach out to Harry. Feel free to reach out to him. He’s on the Dentist Invest Group. Harry Singh. 

Harry: Thanks so much. Thanks James. Man, I really enjoyed my time. Time goes quickly, doesn’t it? 

James: Time certainly does fly my friend. We’ll catch up soon. A little sooner this time than last time, given that that was like a year ago. We’ll speak soon to my friend. Right. 

Harry: Thanks a lot James. Take care.