WHY SMART INVESTORS DON’T BUY PROPERTY | HIDDEN TRUTHS ABOUT MONACO

Discover the secrets of Monaco's smartest investors and why they're NOT buying property!
In this episode of Money Matters, Paul Smith is teaching us the unique strategies these savvy investors are using to grow their wealth in the smarted way possible, anywhere in the world.
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[@baskarankumarasamy7367]

Great thinking ..but making money after paying UK taxes , maintenance , all estate agent fees , all the hassles from tenants it is not as easy as you say, Paul.

[@Chris-sx4qw]

Amazing content

[@PaulSmithTouchstoneEducation]

Cheers Chris.

[@rikardsaje]

Well put! We had our mortgage paid off a few years ago and the good feeling lasted a couple of months. I refinanced to buy the commercial which my business is in and it saved me £1200 per month rent and the new mortgage was £350 and that is a repayment mortgage and good with tax efficiency. That's allowed me to buy 4 more BTL'S and will continue. My goal is 10 and then I'll see from there. I've refinanced a flat recently to get another. Obviously much smaller scale than you but similar principle.

[@PaulSmithTouchstoneEducation]

Fabulous and well done you! I love hearing stories like yours Rikard. You have done amazing and I would love it if you had more property than me in a few years. There are no limits apart form the ones we self-impose. Good luck.

[@shornsparks20005]

Really enjoyed the video Paul but please can we get rid of that annoying music in the background it's too loud and becomes annoying

[@PaulSmithTouchstoneEducation]

Thank you! Will let the editor know!

[@Un_known861]

@@PaulSmithTouchstoneEducation no I actually thought it was quite relaxing and helped me focus in on the content

[@user-bn1wt2ol8z]

I agree shornspark.

[@gavt8919]

As an investor this nice to have dilemma is a no-brainer. Happy shopping!

[@PaulSmithTouchstoneEducation]

Fully agree Gav. 1st world problem....

[@garethhumphreys3687]

Great video and wise words Paul, I’m just starting my journey after buying a few courses and hopefully the WA when I can leverage the money.

[@PaulSmithTouchstoneEducation]

Fabulous Gareth! Very best of luck. Paul

[@MePowlo]

Paul - Rental cost for your apartment over ten years 10 x 12 x 60 = 7.2 million so yes you £100 million UK asset growth for the 25 milllion investment is still much better. Sound advice from you as usual :)

[@PaulSmithTouchstoneEducation]

Thanks!

[@Gizimizi]

Great video Paul. I just question the fact that property goes up by double every 7-10 years. In North England it doesn't, but in London in blue chip areas maybe. Definitely not in Doncaster. In Monaco it definitely does go up by 10% compounded each year. In UK it takes on average 15 years to double. Show me proof it's 7 years in UK. I haven't seen that.

[@PaulSmithTouchstoneEducation]

Thank you Mirza. Pretty simple to find proof. Average property in the UK (government stats) roughly £100k 20 years ago. Now very close to £300k. First property I ever bought in 1982 was £9,000 (269a Roman Road, East Ham, London) now worth over £400,000. Thats 44 times increase over 42 years. This article is a nice simple short read. the worst performing area of the UK is Northern Ireland and even there prices have increased at over 5% per annum on average over the last 50 years: www.propertyreporter.co.uk/property/safe-as-houses-what-does-50-years-of-house-price-appreciation-look-like.html#:~:text=Today%2C%20however%2C%20the%20average%20UK,over%20the%20last%2050%20years. and look at all the areas with average 10% plus increases pa for last 50 years. If you are familiar with the "law of 72" (Google if not!) you will now that to double every 7.2 years annual increase needs to be 10%.

[@PaulSmithTouchstoneEducation]

@@Gizimizi well done for doing the numbers!

[@eunicemorgan7943]

P Q

[@Gizimizi]

@@PaulSmithTouchstoneEducation What I mean by these numbers is. Some houses double every 10 years, but majority do not. You have to have wealthy people living in area who have ability to overpay for house. Creates scarcity and demand which pushes prices higher. I need to learn how to properly identify these areas, as this capital growth makes you wealthy over time.

[@steveharman8907]

This is the 1% thinking magic...thank you Paul

[@PaulSmithTouchstoneEducation]

Thank you!

[@Cappaghgrove]

Nice video Paul...I could use some of that sunshine 🌞. I will be remortgaging my home in September. I have quite a lot of equity which i could hopefully release. I will be a little anxious though because of being hard Wired to pay off debt. I will do it though because I need to make things happen. I will need to read a lot and answer many questions for myself. Paul...have you considered writing a course about equity release?

[@PaulSmithTouchstoneEducation]

Hi Lee, the sunshine is great! I love it. I do understand your nervousness. Clearly you understand why you need to change that "hard-wiring" on debt repayment. Good debt vs bad debt etc. For me Lee the equity release is not the difficult bit. The course/education/support elements are making sure we maximise the returns on the equity once it is released. Commercial property, serviced accommodation and all the other higher cash-flow strategies on which we have a number of courses. For this video I wanted it to be very simple, thats why I just said buy to lets x 4. No refurbishment, no buying below market value. The simplest possible route is still pretty good over the medium to long term. Good luck.

[@johnporcella2375]

Great video! Funnily enough, I had come to the same conclusion some months back when I sat back and pondered on investment in SAs in York. It was a theoretical thing only as my financial position was not where I hope it to be soon! Maybe one day, I shall be sat on your balcony enjoying an espresso in Monaco! Or better still (?), you and Aniko sat on my balcony on the Italian Riviera, so not far for you to come, to enjoy a nice cuppa! My feeling is that the four hundred is the way to go, but it would be a lot of work. Also, what about the risk of investing too much of your money in one market in one country? Might be better to spread it in different strategies, such as SAs, BTL, HMOs, aparthotels, commercial etc etc. Can you get a British mortgage as an ex-pat? By the way, your video reminded me of when I was in school (I am a year older than you) and my English teacher corrected my homework and told me that it is 'apartment' in English and not "appartmemt"! He said that my English spelling must have been contaminated from Italian! I have never forgotten that it is a single 'p' in English!

[@kenrobinson1153]

Hi Paul. Another great video.Can you please explain why your sweet spot is £250k?

[@karenbarker9474]

Buying 4 properties as BTL is an amazing idea but if for some reason you have a rental void then that surely must eat into your profits and leave you paying a mortgage for that time?

[@twelv.eventsalliance]

I love your thinking Paul, however, here in North East Scotland we are only just breaking even on our property after 9 years. When You say UK it's not really, it's only certain parts of the UK. Moved up here from Manchester and now feel trapped here. 😥

[@PaulSmithTouchstoneEducation]

Thank you! Yes sadly Aberdeen is pretty much the opposite of most of the UK. From my research it is very much almost all of the UK with some exceptions. You are unfortunately in one of those areas. Good luck.

[@twelv.eventsalliance]

@@PaulSmithTouchstoneEducation thank you. Some people tell us about how the British government has ruined the buy-to-let market with all of their restrictions and taxations. Do you agree with this? Thank you for any advice you can give. Tracy

[@PaulSmithTouchstoneEducation]

@@twelv.eventsalliance Hi Tracy. As long as you buy through a limited company and manage sensibly then BTL is still great. If you prefer other (no-interfered with) strategies then I love commercial property and serviced accommodation. Either of these has no government interference with regards to structure, tax and they can be great for your pension (SIPP or SSAS). Paul

[@twelv.eventsalliance]

@@PaulSmithTouchstoneEducation thank you so much for your answer.

[@sukhjeetsingh84]

Thank you , please correct me but I think 750k on 4% would be 30k and not 10k which means you would loose 6k every year on 4 properties in uk atm.

[@PaulSmithTouchstoneEducation]

Hi Sukhjeet. I know I am throwing a lot of figures at you in this video, the £10k is the extra mortgage on your home assuming you released £250k deposit for the rental properties. After all costs your rental properties will make £500 each. This includes paying the mortgages on the rental properties. Maybe watch again and stop it to make notes on what I am saying? Typical BTL makes £500 after all costs x 4 = £2,000. The only other extra you need to pay is the £250k mortgage on your own home where you increased the mortgage to buy the million pounds of rental property. Hope this helps?

[@leonhenry4861]

He said 250k not 750k

[@shirinsaidy]

If I were you, I would definitely go for the 400 props in UK with all the global uncertainties ahead.

[@FrazzyA999]

Thanks Paul. Really insightful video. I know your sweet spot is but to let’s at circa £250k. If your strategy was focussed within Scotland only would your strategy be different due to the additional stamp duty on second homes? Thanks again

[@PaulSmithTouchstoneEducation]

100% yes. I have a Scottish portfolio. We lived there for 20 years. I am selling my single lets in Scotland and focussing on commercial and serviced accommodation in Scotland. Hope this helps.

[@eastfieldCrypto]

Hi Paul When you say you will make approx £500 per month profit on an average £250k house , is that minus tax ? If so what is the tax rate please ? Thanks

[@rnp1785]

I wish I could spend about a year with this guy just learning it’s it’s one thing to have a lot of money, but it’s another thing. What do you do with it? I’m sure he could show you how to quadruple that money pretty quick.

[@sirinamuntaka6146]

Excellent analysis Paul. I presume this mean you can’t get a 75% mortgage in Monaco, cos if you can, it means you won’t need £25M but just the deposit correct? But if you must buy it cash @£25M in Monaco, then obviously, will rather buy 400 properties in the uk hah . All the best on your journey to been a billionaire cos I know you can . 👏

[@Shakman007]

I was about to question that … why can’t you mortgage property in Monaco?

[@Shakman007]

I wonder if there is really a tax angle living in Monaco and earning overseas rental income. Looking at Savills reseach, Monaco prices have doubled over the last decade from 25k Euro psf to over 50k psf.

[@PaulSmithTouchstoneEducation]

Hi Sirina, you can get "kind of" mortgages here. Tend to be 50% LTV maximum, repayment and maximum ten years. Typically the facility is renewed (or not) every three years too. so it is more like an overdraft that a mortgage! Hope this helps.

[@PaulSmithTouchstoneEducation]

@@Shakman007 you can but very low LTV, short timescale and repayment not interest only. I thought the numbers for the video were already complicated enough!

[@PaulSmithTouchstoneEducation]

@@Shakman007 We are investing in Manchester at the moment and capital plus rental increases are better than Monaco plus you enjoy better gearing. The final part of the jigsaw is how you then manage your tax liabilities.

[@anthonybarton2296]

How easy/hard is it to become the lender as well( the bank). So in essence you have a company providing yourself with the mortgage?

[@saintmichiel]

400 properties in the UK, how many costs do you have for rental work, maintenance, damages, legal fees, It is a high cut , your profit per unit in the UK is much lower, and you most likely do not have 100% rented out

[@PaulSmithTouchstoneEducation]

Thats what many people think. However we have full occupancy in our buy to lets. Rent increased close to 15% last year and over 10% so far this year. we always allow 20% costs for letting agent, repairs and voids. We make over £500 per property per month after all costs. Profit in UK is higher than Monaco. Good luck.

[@richardburke952]

Paul, Good breakdown analogy - so your 4 x BTL rentals give you £2k a month profit on a £1 million investment borrowing £750k - with a Cap gain of 100% over realistically 10 years ....... My question is why the sweet spot of £250k per property? would be 4 x BTL is 4 X the expenses and potential headaches from tenants.... does it make more sense to buy 1 property for £ 1 million or 2 at £500K and have the same capital growth and similar ROI ? with less risk and headaches? I have £500K in cash and I need to consider if I follow your advice and buy 8 BTL at £250K with £50k deposit, making me £4k a month after expenses, or buy a property to add value and sell as my main residence with the aim to make min £150K tax-free in 12 months? then repeat, to build up to £1 million in cash. Paul What would you do in my situation?

[@hardworker645]

Thanks for that video sir,,,, God bless you and your family

[@nomadinthemaking]

Very true plus a £250,000 property a lot bigger % of the population can afford that if you wanted to liquidate it. £2000 a month rent off a £250,000 property is very ambitious on a residential property almost 10% yield. Looking at5-6% interest on buy to let mortgages.

[@PaulSmithTouchstoneEducation]

The £250k would be residential mortgage rate. Thats why I picked 4% as it would be your home mortgage. The £2,000 profit (£500 per BTL x 4) is on £1,000,000 of property using the £250k of equity from your home as a deposit. Does that help?

[@nomadinthemaking]

@@PaulSmithTouchstoneEducation it does Paul thank you. I’m looking at going down the serviced accommodation route as I invested in one of your course bundles. I like the delayed completion strategy.

[@HaHa-bc4zr]

If i had 25 million surplus cash which i am considering purchasing an appartment in Monaco with I would make youtube videos for peanuts too.

[@PaulSmithTouchstoneEducation]

I have made my choices. I already live in the apartment. What would you do if you had £25,000,000? What would you really do?

[@lhg2353]

Hi Paul, When are we going to see a house tour!, would also like to see a day in the life.... In Monaco

[@PaulSmithTouchstoneEducation]

House tour here in Monaco Harriott? I can do that anytime... I will get it on the list... day in Monaco is a little more challenging as people are generally not used to SM/cameras in their faces, they are a little more private. I will see what I can do. Paul

[@lhg2353]

@@PaulSmithTouchstoneEducation Yes Paul of your home in Monaco. It is so good to see you living in Monaco now, I know how hard it is to get residency there, well done

[@PaulSmithTouchstoneEducation]

@@lhg2353 Thank you my lady. Of course I will ask the team to get that planned.

[@johnporcella2375]

Paul, as the late and very great Bob Monkhouse once said, "It is dangerous to assume because it can make an ASS of U and ME!"

[@PaulSmithTouchstoneEducation]

100%

[@darylpike8547]

Hi Paul, What would do, or should I say am doing, is! I bought a 5 bed ex guest house, for cash. I'm going to do it up, take the equity out and buy a property with planning to convert into 3, 2 bed apartments and 1, 1 bed apartment. SA them, and hopefully live on a farm in Portugal or on a yacht 😅😅😂

[@PaulSmithTouchstoneEducation]

Fabulous to hear Daryl. Very good luck with that. Enjoy!

[@darylpike8547]

@@PaulSmithTouchstoneEducation I will still need your proper training, to make sure that I do everything right though! 😉

[@KB77mp]

How do I sign up to touchstone education to get educated on these things

[@PaulSmithTouchstoneEducation]

you could visit wwwtouchstoneeducation.co.uk to start

[@samsara7598]

Idk if u will reply but from what i learned from what u said. If I want a 20,000,000 dollar penthouse in monaco it would be better to rent it. Then use my other money to invest in real estate in my home country? 😅

[@PaulSmithTouchstoneEducation]

Thats how the numbers work for me given that I can make a better investment return in the UK. My reservation about what you say is it depends on which is your home country and also that you nkow how to invest there for the best returns. Good luck.

[@Sam-jy5tj]

Can you buy 400 £250k properties in the next 12 months? What about costs? Legal ? Stamp duty? Tax? Higher interest rates eroding your income assumptions… assuming it’s bought via a company corp tax, dividend tax. Maybe you’d find in reality you could only do 25 properties over the next 2 years. Assuming it takes 7-10 years to double? What if it’s 15 (my experience ooopp north) .. A lot of work and same outcome as Monaco but with 100x the work. Or…. Enjoy the sunshine on the balcony..😉

[@PaulSmithTouchstoneEducation]

Thanks for your comments Sam. Yes I can buy hundreds of properties, I have a team that do just that. Stamp duty on 6 or more properties in one transaction removes the extra 3%. A couple of years ago we bought a legal firm. If you are worried about interest rates then fix for 5 or 10 years. Aniko and me have spent years building businesses. For us that means profitable commercial enterprises that work without us. We "work" 2 days a week and the other 5 days we enjoy plenty of sunshine! If we really wanted to we could simply buy a new build block/blocks in the right place and pretty sure the developer would give us a decent discount! We will not be buying one at a time. Average UK property price 20 years ago was £100,000 now it is £300,000 (bar a few thousand). I bought my first flat in London in 1982 for £9,000. It is now worth over £400,000. Might I be out by a few years? Yes. Will it stress me? No. Good luck.

[@Sam-jy5tj]

@@PaulSmithTouchstoneEducation Thanks for the reply.. great information and great video.

[@gra_dzik]

I would buy the 400 in the UK, then borrow another 25 million from the investors and give them 25% in the investment. After 8 years, the value of the property will be PLN 400 million (profit PLN 200). After the investment, I would give PLN 25 million to investors + their profit PLN 25 million. I earn 50 million in 8 years with money that is not my own.

[@hugovandermeer1566]

What's this monopoly, or cluedo?

[@ntulitwalondaga592]

Hello Paul I was asking about can I be mentored by you ?how do I go about it??

[@PaulSmithTouchstoneEducation]

One of our team members can get in touch with you. How does that sound?

[@ntulitwalondaga592]

@Touchstone education I'm on the process of relocating to UK when I arrive there I will let you know

[@homodeus8713]

What about if you’re starting with nothing?

[@jimbobbob9063]

My question. Why live in Monaco? Sounds good but quality of life is poor. For tax reasons? You can have trusts and account offshore so your income is tax free where you live. 50k for an apartment to like in a few square miles. I’m sure there’s nice places to live

[@PaulSmithTouchstoneEducation]

We love it here Jim. Weather, food, events, perhaps most of all the people we spend time with are truly exceptional. If it not for you then no problem. We love it. We also have an 8 bed villa on the Riviera about an hour away in an acre of land, plus we keep a boat in Cannes. Good luck.

[@scrimmy45]

4:10 - properties in the UK double in value every 7 - 10 years. Really ?. Maybe in parts of London or other very small niche areas. Not overall. Fact.

[@MrCraigShepheard]

Warren Buffet also talks about his $18 haircut which compounded over time could cost him $300,000 in lost opportunity

[@PaulSmithTouchstoneEducation]

Indeed. Great to heat from you Craig.

[@Big-Show1]

I'm sure if you're in the market for a £25m apartment you don't need to worry about 400 quarter million pound properties. You're the guy renting out his £25m apartment plus the rest of your assets 😂

[@PaulSmithTouchstoneEducation]

I agree "worry" is not the right word... how would you invest £25m is the question. Inflation has been roughly 10% the last couple of years.. at this level inflation will destroy wealth, keeping it in the bank will ensure this happens. Creating and protecting wealth is what I do.. I explain my decision in this video. Would you do something different?

[@ayres6727]

smart man, but seems strict

[@user-mk4gr6el5p]

Buy properties in the UK & keep the Monaco home.

[@Shakman007]

Another problem with your analysis….. can you really go out, find and buy 400 properties at £250k each in a year?

[@PaulSmithTouchstoneEducation]

Each to their own Shakman. Are you looking for problems or solutions? Copy pasted from response to Sam (I forgot to say to Sam we own an estate agency too which deals direct with very large developers) asking very similar to you. "Thanks for your comments Sam. Yes I can buy hundreds of properties, I have a team that do just that. Stamp duty on 6 or more properties in one transaction removes the extra 3%. A couple of years ago we bought a legal firm. If you are worried about interest rates then fix for 5 or 10 years. Aniko and me have spent years building businesses. For us that means profitable commercial enterprises that work without us. We "work" 2 days a week and the other 5 days we enjoy plenty of sunshine! If we really wanted to we could simply buy a new build block/blocks in the right place and pretty sure the developer would give us a decent discount! We will not be buying one at a time. Average UK property price 20 years ago was £100,000 now it is £300,000 (bar a few thousand). I bought my first flat in London in 1982 for £9,000. It is now worth over £400,000. Might I be out by a few years? Yes. Will it stress me? No. Good luck."

[@Shakman007]

@@PaulSmithTouchstoneEducation Thanks for taking the time to reply. I didn't know about the stamp duty discount - very useful info.

[@PaulSmithTouchstoneEducation]

@@Shakman007 Pleasure!

[@fabiomari3023]

Because they are not idiots 😂

[@PaulSmithTouchstoneEducation]

Always simply follow the numbers.... agreed

[@pinaldesai5242]

Ok, so £250k mortgage on my existing property would cost as you say £10k. I use this money to put down a deposit to buy 4 properties each costing £250k. This means I have to borrowed £750k. The 4 rentals make me £2k a month totalling 24k a year. The £750k mortgage costs me £30k a year not to mentions the additional £10k on the equity I released to put down a deposit. So how can I be become a millionaire, someone correct my logic 🫣

[@PaulSmithTouchstoneEducation]

Thank you for asking and sorry for not explaining so you could understand Pinal. The 4 rentals will make close to £2,000 each per month or £24,000 each, or £96,000 per year. I tried to simplify it by saying the profit per rental unit per month will be £500 each or £2,000 per month. I said profit after all costs including the mortgage. Does this help? I know it is confusing if you have not done this before. A normal buy to let property will give typically £500 per month profit assuming it is a good investment and 75% loan to value mortgage. Please ask again if it is still unclear.

[@richardburke952]

@@PaulSmithTouchstoneEducation Where in the Uk can you buy a property for £250k and receive £2k a month rent ?

[@choudryshahid2026]

If u were minted will u b making videos and asking people to watch your videos

[@PaulSmithTouchstoneEducation]

When I was at school my English teacher (who I had loved being educated by) said to me "Boy.. one day you may be a wit, currently you are half way..." I am really not sure what he would have said to you. I live in Monaco. I am also reminded of Tommy Cooper joke, it concerned two tents.. two tenses in one question?