ASK456: How big is too big? PLUS: My flat has fallen in value! How do I remortgage?

Hi, I'm Rob. And I'm Rob. And this is Ask Rob and Rob. Hey, everyone. Welcome to Ask Rob and Rob, the show where you get your amazing questions in. And we do our very best to give you a decent answer in return. We've done this a fair few times now. And we've also reminded you of a few times of how you can get on the show. But just in case it's not landed yet or you're new to us, let's give you a reminder.

Oh yeah, very simple. All you've got to do is go to propertyhub.net slash ask. Then you have to leave us a voicemail or you have to fill in a little form to send us a written question for the Sunday times. But it all starts by going to propertyhub.net slash ask. All right, let's have a listen to our first question from Matt. Hi, Rob and Rob. Matt here from Studley. Greatly appreciate all the work you do from books, podcasts, to even the property hub university online. All the stuff that you've pulled together is fantastic.

wanted to ask a quick question around some of the content that's been on around the different types of investment assets and the pros and cons of each one. One of the things that wasn't touched on was scalability. So obviously property has a whole host of different benefits as you touched on everything from being able to use leverage being one of the major factors there.

However, why don't the super, super wealthy use property to build their wealth to the same degree? It certainly doesn't seem to leverage the same way that stocks, bonds, more liquid assets tend to. So I just wanted your kind of opinion on that. Is there a point at which the liquidity issues, the friction in the property market become issues for scalability and where it's probably better to then switch over to looking at stocks and bonds?

that might be a property portfolio of 50 plus, it might be 100 plus, at which point do you think it becomes a bit too much? Even if you're using multiple letting agents, you go from managing, I suppose, 50 properties, you might be managing 10 different letting agents if you're all over the UK. So just interested to your thoughts on the scalability point. Cheers, bye.

Matt, thank you for your question and for the kind words as well. This is a really great question. It's a bit of a luxury question in a way because how big is too big is kind of a nice problem to have and most people are probably trying to figure out how to get started at all or how to scale up without running out of cash. But it is a completely valid question as worth keeping in mind for

the purposes of setting your long-term goals, it also can become a very real problem. It sounds like a weird problem, but I've said it on the podcast before that I know people who've ended up with hundreds of properties just because they just kept on doing the same thing over and over again. I was working and I was doing it like, oh no, this is a nightmare. I've now got a massive portfolio cause and me headaches. So it is well worth thinking about. In fact, I think we will do a special episode about this at some point because it is a really interesting topic.

But now I will just make a couple of points. The first is something that Robby has been saying since the very beginning of this podcast, which continues to be an excellent point, which is what really matters is portfolio value, not portfolio size. So in a general sense, as you go, it makes sense to consolidate and get to a point where you have fewer, larger assets. That could mean one property worth 300,000 rather than three properties worth 100,000.

as you scale further, it could mean one apartment block rather than a whole load of different houses. Because yes, there'll be lots of individual units within that, but they can all be managed by the same person, and there are lots of economies that come along with doing that. The second thing I'd say is that you can scale up as far as you want to. If you have the cash, you could end up owning thousands of units. But by the time you do so, at some point in the process of moving towards that, it will go from you having a little bytelet portfolio

to you being the owner of a property business. You talk about maybe needing to manage 10 letting agents at that point, and that may be true, but at that type of scale, you'd be employing people to do that. You may even bring property management in-house and have that as a separate division of your own company. If you had the cash to get that far, it absolutely could be done. It's just that most people don't, and even if you did, would you want it to go that far?

I think the final thing I'd say is that we've done a couple of episodes in the past about what the super wealthy invest in. I've done a YouTube video about this as well. What you tend to find is that they invest in a bit of everything. They say they do have a lot of property, but they have investments in other asset classes as well.

but for the property that they own, they very often use leverage to use mortgages. Because as we've repeatedly said on this podcast, that is one of the big benefits of property as an asset class. And they know that and they take advantage of that. But property is illiquid and it is a pain. There is no perfect asset class. So when you think about it, it makes complete sense to use property for the benefits it has. But if money is no object, then spread it around, have some investments in the stock market that are going to chug along.

have some short-term bonds for safety, have investments in businesses that could end up giving you 100x returns, have a bit of everything, why not? And I'd say that's far more common than just having a massive property portfolio and nothing else. But like I say, Matt, what is the right size for a property portfolio is a super interesting question. So keep an eye out for an episode on that subject sometime soon. From Matt now to Marco.

Hello, this is Marco from London. I have a question regarding remarkaging. I bought a flat in London two years ago for 700k and I've been renting it. I'm getting close to remarkaging time. However, I see that similar flats are sold in for less than 700k now. I guess it's a common question in London. So what are my remarkaging options, even the food in Belgium?

Marco, thank you for your question. That bit of a tricky one, this one. I'll tell you what I would do. I would contact your original lender.

and say to them that you're looking to re-mortgage. The reason why is they'll have a desktop number of what your valuation may be. And then I've found from personal experience that they tend to be a little more generous. Now that might just be me and the experience on my personal life. But if I'm ever worried about a valuation, then that is the way I go.

So I'd ask the current lender to give me what the valuation would be. Obviously, they're not nervous or anything like that. Just contact them and say, I'm looking to re-mortgage. What options do I have available to me? They'll then go through the process, but the reason why I like this is normally they won't send out a surveyor. Normally, they're not looking for a valuation report. They'll have an online number that normally, I keep saying normally, because it's not exclusively, but normally,

That's how it would work. So I'd start with contacting your assistant lender. The great thing is, as well, less paperwork, less process, less admin. And generally, if you're a busy person and you haven't got any issues with valuation, but you just want an easy life on the re-mortgage, this is a good way to go. So everybody listening can take advantage of this. You just need to make sure that the rate offered is reasonably competitive. But sometimes I've gone down this route if it's close, just close to being like one of the better deals available.

because for me it's just easier to go through this process and re-mugging with the same lender in most circumstances. So that's how I would approach it. You could go through the process of a re-mulgage and you may be pleasantly surprised and the comparables in your area may just be temporary and the sold prices still support your property. So I would be looking at the sold prices more than the asking prices in the area. You can do that on right move, Zoopla and other similar sites. Very easy to do.

get that data and that may support what you need anyway because that's what the surveyors will tend to do as well. They take more encouragement from sole prices than asking prices. So that's all I would do, Rob. Are there any different approaches you would take?

Well, like you say, I think the existing lender could be the key here, because if you do go ahead and do a product transfer, then normally, again, they're not gonna come out and do a revaluation of the property. I suppose they might do if they believe that the property market locally has moved a lot and they're concerned about it, but generally they'll continue on the same basis. So there is an element of luck, because if you're with a lender who has good product transfer options available, then great, nothing to worry about. If you're not, then I suppose the worst case could be you're making a choice between sticking with your existing lender at an untractive rate

versus moving for a better rate but potentially having to put more cash in to make up for the fallen value. But as we often say, the thing to do here is to speak to a mortgage broker. Get onto your broker, get their opinion and they should be able to put all the options in front of you.

Well, that's just done for another week. Thank you for listening. I hope you found that useful. You know what else will be useful. Tune in on firstly for the property podcast because we got a great episode lined up for you there. And you can find us in the Sunday times on Sunday. So until those wondrous events take place, take care, have fun. Bye bye. Bye bye.