Amongst the subjects in which everyone thinks themselves an expert are politics, sport, psychology, marketing, and property.
For subjects of that nature, generally, people tend to think about matters involving their own interests, in isolation or amongst friends. A little knowledge is a dangerous thing. Not having enough expertise and experience but thinking they do and carrying on regardless, is why, with psychology, most people are better at helping others than themselves, and most people do not know the difference between marketing and advertising. The reason for the difference is not so much the level of expertise but the range and depth of experience. Not just knowing what to do, but what to do when something goes wrong and better still knowing how to avoid going wrong to begin with.
If property doesn’t seem too difficult to get the hang of then that’s because of its truisms. For participation in the property market the only requirement is money and the ability to persuade others to lend some more; everything else can be learned on the job, picked up as you go from anyone that comes your way; you can buy advice whenever you want.
Expertise is comprehensive and authoritative which is why range and depth of experience has a different feel. When so called ‘experts’ talk about property, a way to distinguish between those that really know their stuff and those whose knowledge is mostly hearsay and limited is to enquire what they mean by “property”. Hearsay rarely defines its terms; the reaction is that it’s obvious surely, the implication is residential property: houses, flats. Mention that property includes, for example, shops, factories, warehouses, schools, farmland, churches, car parks, petrol filling stations, and likely they’ll respond saying they don’t know anything about that sort of thing, it’s just homes, places to live in that they’re talking about.
Frequently, the property market is lumped together as if one place where everything is happening, but the market is not one arena: there are different sectors, each with segments. The law of property has branches, shaded by common law and statute. Ignorance of the law is no excuse. Residential law may seem occupier oriented but, as with business tenancy law, to tackle a situation from an inexperienced perspective can end up out of pocket financially or costing your livelihood.
Despite my knowledge of property, I rarely stray into fields I know little about and even then tread lightly. Not so the know-all: skip the shallows and jump into the deep end. Get into trouble and someone is sure to come along and get them out.
In England and Wales, the property market is unregulated and the deep-end is the moment an agreement ceases to be ‘subject to contract’ and becomes binding. In an unregulated market, no one cares about participants beyond what is legally required or codified. Expecting to be got out of trouble if need be is where the know-all goes wrong through thinking that in the property market there’s no real difference between theory and practice.
With transaction, theory assumes everyone involved is working towards the same objective. With management, theory that a literal reading of the lease is the same in practice. Armed with such assumptions, why incur the expense of professional advice when money could be saved by having a go yourself? You’re intelligent, how hard can it be? Read about the subject, never mind things may have changed since the book or article was published. Still stuck? ‘Phone a friend. No joy? Search on-line. Ask on a forum. Someone somewhere is bound to have come across the same situation, or something very similar.
Paying to get out of trouble could mean overpaying, so the prudent pay advisers to help minimise the outlay. Whether landlords and investors that usually do the work themselves but in difficulty should expect the same enthusiasm to earn a fee when turning to advisers for help is not something to take for granted. Amongst more experienced advisers is a resistance to an expectation that providing expertise should be an extension of social services in a similar vein as companies whose business model is based on attracting customers by providing free help. Social media is a case in point. Sign up for Facebook, Twitter, Linked-In and so on and you’ll be given free access to a social network in exchange for valuable information about you and disclosures from your social platform; big business on-line enable advertisers to pounce.
Ever since property became a store of value there has been a desire for growth. For being better off for all the effort entailed. Of getting more than the price paid and spent on the property during the period of ownership by the time comes to sell. Whether a property is bought to live in or for business use, occupational expectation around value is no different to that of an investor.
Whether you’ll get a good financial return depends upon a combination of buying and selling skills and the calibre of advice along the way. If you rely on your own expertise then you’ll have to be certain that what you know is really all there is to know and that nothing anyone tells you would make a difference to your way of thinking. Apart from trying to consider all possibilities in advance being the stuff of nervous breakdowns, the only way to be certain is to get a second opinion, which means your expertise would be checked by those more expert and experienced.
It’s not compulsory to take professional advice and many people do not. Many people think they’re expert enough for their own needs. The property market is littered with horror stories but are rarely spoken about: professional advisers, wanting to promote a positive shine, are into testimonial samples of a selective bias. Also rarely talked about is the difference between financial return from market momentum and financial outperformance based on in-depth expertise and application of extensive experience.
The Rent Review Specialist