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Forged in 2013 | Six years of hurt: where has section 24 left the landlord market? | Challenges and opportunities in 2023 | Fractional ownership | Brighter than we might think | 50% Is greater than 100 | Why the North East?
Firstly I'd like to say how thrilled I am to be celebrating 10 years of the Landlord Investment Show. It's been quite a journey and a huge thank you to everyone who has supported us over the past decade. I'm also sure I am not the only one who feels it has been a long, long winter. Come on Spring, you can do it! It's been a cold few months for our landlord investor community too. What with further increases in interest rates, energy prices and regulation there's a raft of questions which need answering. As we steam headlong into Q2 of 2023 let’s see if the shift of season brings some positive change in general. This issue of LI Mag is very much focused upon investment and continuing the spring metaphor I feel the key words this year will be change and adaptation.
With 10 years of live shows and 70 Magazines under our collective belt I hope our expert contributors, exhibitors and speakers can help shine a little light on some of these key subjects for your. The 2023 show calendar kicks-off on March 14 with a return to Old Billingsgate in the City of London. We have three awesome panel debates lined up and Ian Collins of Talk TV / Talk Property will be joining us as a brand new host for the morning session: Inflation, Regulation, Taxation & More. I can't wait to get back into the swing of the show season, and you can read more about our March 14 event in Show Update (see Page 6). As always we have some excellent thought and opinion in this issue which I hope you find helpful. All the very best on your property investor journey. TH
LANDLORD INVESTOR MAGAZINE
Editor Tracey Hanbury
Design
Marc Riley
Photography
Aneesa Dawoojee
Printing
IOP Marketing
06 22
Show Update Forged in 2013
12 16 26 28 30 34 36
Taxation
Six years of hurt: where has section 24 left the landlord market?
Investment Challenges and opportunities for property investors in 2023
20
Investment Brighter than we might think
Investment
Why the north east delivers for property investors at all stages of the investment cycle
Investment
Fractional ownership of fixed income property: the way forward for legacy wealth creation
Investment
50% Is greater than 100
Investment
When is it a good time to buy property?
Proptech
Do you know your portfolio?
Education
2023 is a new age of property investing
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PLEASE NOTE: Statements and opinions expressed in articles, reviews and other materials herein are those of the authors and not the editors and publishers of LI Magazine. The content of this publication does not under any circumstances constitute investment or legal advice. While every care has been taken in the compilation of this publication and every attempt made to present up-to-date and accurate information, we cannot guarantee that inaccuracies will not occur. LIS Media, Tenants History Limited and our contributors will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through the promoted links. Published by LIS Media, 27 Stafford Road, Croydon CR0 4NG. www.landlordinvestmentshow.co.uk | info@landlordinvestmentshow.co.uk
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Fave thing about LIS: Getting all the attention
Given the quite extraordinary challenges of the past few years, the National Landlord Investment Show reaching 10 years really does feel like cause for celebration. The slings and arrows have after all been myriad. Pandemic, Brexit, inflation, regulation, legislation… you name it and its been thrown at us, but here we are in our 10th year about to deliver our 78th live show.
Created in 2013 and driven by our own thirst for knowledge as private rental landlords, we are delighted to be heading into the 2023 show calendar with the principals of knowledge and education firmly at the heart of what we do. We exist to connect people and be it seasoned landlords with multiple properties, or those looking for new opportunities, joining the dots between our audience and exhibitors is still the very essence of our shows.
Old Billingsgate, has been our new London home since 2021 and we’ll be back there with the first show of 2023 on March 14. I know I always say it, but it really is a fantastic and spacious venue, spanning 2 floors with stunning views over the River Thames.
Less Tax 4 Landlords will be joining us for the 8th consecutive year as Show Sponsors. HJ Collection are also onboard as Co-Sponsor, with our sister brand Property Notify the official Media Partner. The success of an event like ours is dependant upon long and fruitful relationships with everyone involved and we see the continued support of all returning and new brands as a huge mark of confidence in our own.
We're thrilled to announce Ian Collins of Talk TV & Talk Property will be hosting our morning panel debate (10:15 – 11:15). The debate title speaks for itself and will tackle the three biggest issues for our sector and establish what the
outlook is for PRS landlords in 2023. In addition to Ian Collins the panel features Chris Bailey from our show sponsor Less Tax 4 Landlords, Paul Shamplina of Landlord Action (who I'm sure you'll all know), Paul Mahoney from Nova Financial Group and Marie Parris of George Ellis Property Services.
Hosted by Ranjan Bhattacharya our late morning panel (11:30 – 12:30 ) asks Is now the right time to have commercial properties within your portfolio. If you're a commercial landlord or have commercial property assets this is a must attend event, with a quorum including Amy Schofield from Together, Kam Dovedi from Premier Property Education and Harriet Dunn from Titlesplit.
Hosted by Paul Shamplina our afternoon panel (14:10 - 15:10) looks at the Renters’ Reform Bill and asks what does it mean for landlords? The Bill which seeks to change the current UK rental landscape has myriad issues everyone managing private rental property needs to be aware of. Paul Shamplina will be joined by Sue Coulson from Capital Letters, Richard Blanco from NRLA and Julie Ford from Gothard Rowe.
The only TV show that gives budding property developers the chance to partner with a seasoned professional returns to join our March 14 show. The Property Elevator Angels, John Howard, Hayley Andrews, Ranjan Bhattacharya, Paul Mahoney and Nicholas Wallwork will be considering pitches from aspiring property entrepreneurs live on the day between 12:45 and 14:00. Audience places are free, but limited, so if you’ve not already registered to attend we advise you do so via the LIS website ASAP.
We'll also have 5 rooms filled with backto-back seminars from experts covering all compass points of managing and investing in private rental property, plus a main hall packed to the gills (pun intended) with all kinds of helpful products and services to aid your journey. Find everything from legal advice, finance, insurance, tax experts & property management to investment opportunities, education, proptech, furnishings / decor and more.
Don’t forget the UK’s largest landlord networking event will be also back between 09:00 and 09:45. Always a busy session, this is a brilliant opportunity to meet like minded individuals, network and share your experiences as a private rental landlord.
Show tickets are moving at the pace of the free cakes at our last show - to find out and reserve your place visit www. landlordinvestmentshow.co.uk/14march-london.
As the National Landlord Investment show reaches its 10th birthday it's full steam ahead for 2023.
You name it and its been thrown at us, but here we are in our 10th year about to deliver our 78th live show.
10:15 - 11:15
INFLATION, REGULATION, TAXATION & MORE...
WHAT’S THE OUTLOOK FOR PRS LANDLORDS IN 2023?
Hosted by Ian Collins
Panel debate sponsored by Less Tax 4 Landlords
11:30 - 12:30
OR RESTRUCTURE?
IS NOW THE RIGHT TIME TO HAVE COMMERCIAL PROPERTIES WITHIN YOUR PORTFOLIO.
Hosted by Ranjan Bhattacharya
Panel debate sponsored by Premier Property & Titlesplit
12:45 - 14:00
The only TV show that gives budding property developers the chance to partner with a seasoned professional returns.
14:10 - 15:10
WHAT DOES IT MEAN FOR LANDLORDS?
Hosted by Paul Shamplina
Panel debate sponsored by Capital Letters & NRLA
aying higher rate tax on property en you could be paying 50% less?
Could a business restructure slash your CGT bill by re-basing your purchase costs?
Could you be allocating profits to lower rate taxpayers to save on the corporation tax increase?
Could you be withdrawing your hard earned capital taxfree, rather than getting caught in the double tax trap?
After almost 6 years of implementation, where has S24 left the landlord market?
Even to this day we know landlords are still feeling the pain. More than 29,000 landlords signed a recent petition calling on the government to reverse S24, but responding on the 17th January 2023, the government confirmed they would continue to set mortgage interest relief against rental income only at the basic rate of tax.
Whilst it would be great if we could see the true impact of the changes on the market without external factors getting in the way, of course it’s never that simple.
On the face of it, it does appear that the immediate impact of Section 24 was to push many landlords out of the sector given the hard facts. In 2017 there were 2.88 million landlords, and by 2019 there were 2.66 million [i]. Not likely a coincidence.
Landlords have of course faced many challenges since 2017 including:
• Covid-19 and pressure not to evict non-paying tenants
• The Rise of Build to Rent
• Taxation changes
• Fear of a property bubble
• Proposed EPC policy
• Proposed abolishment of Section 21
• More recently rising interest rates
We cannot say that S24 is the sole factor for landlords leaving the market, but let us look at what experts did
predict would happen as a result of restricting tax relief, and where we are today.
Prediction 1: Higher rents and decreased profits
Section 24 was always going to hurt. The big unknown was how landlords would deal with the sudden squeeze on profits. Would they increase rents or possibly absorb them to remain competitive?
Average rents increased significantly between 2017 and the end of 2021, by which time Section 24 was fully implemented. But average rents have been growing for years and they continue to do so. In fact, you only have to glance at a newspaper to know that average rent is not only growing in every region of the UK, but it is at a record high reaching £1,171 in Oct 2022. That’s up 51% since 2017 when the average rent was £773.74 [ii] But again, rising rents can also be contributed to:
• Reduction in supply of available rental homes
• High demand for rental properties
• Stamp Duty & Capital Gains Tax changes
• Legal requirements for safety standards
• Upfront letting agent fees ban
• Inflation and rising wages
Whilst we cannot say beyond doubt that Section 24 has pushed up rents, there is a clear correlation between tougher financial conditions for landlords resulting in higher rents for tenants.
2017 was an important year for landlords in that it marked the beginning of Section 24 (S24). With a restriction on mortgage tax relief, many predicted that landlords would experience huge financial difficulties and the rental market would suffer as a result.
Section 24 was always going to hurt. The big unknown was how landlords would deal with the sudden squeeze on profits. Would they increase rents or possibly absorb them to remain competitive?
Prediction
Tax experts predicted a rise in limited company ownership because landlords could reduce the impact of S24 by transferring ownership of their properties to a new limited company, subsequently paying corporation tax instead of income tax whilst benefiting from other tax incentives too.
Companies House data would suggest this prediction did indeed come true with more new BTL companies being formed each year. 2021 saw 47,370 new BTL incorporations – almost double the 24,190 companies set up in 2017. [iii]
Analysis from Hamptons also shows that between the beginning of 2016 and the end of 2020, more companies were set up to hold buy-to-let properties than in the previous 50 years combined and yet despite this, there is still only 6% of landlords owning properties in limited companies or a mixture of both. [iv]
Clearly there was a surge in company ownership, but what proportion this represents landlords incorporating their existing portfolios vs new landlords setting up a new company to buy property (regardless of whether that’s the ‘right’ thing to do in their circumstances) needs further research.
Prediction 3: Landlords selling up
With Section 24 hitting many landlords hard, it was predicted that some would decide to exit the market. This we now know to be true, with 220,000+ landlords leaving in the first two years of the legislation taking effect. Apart from S24, the government also introduced lots of new regulation, making the ‘accidental landlord’ think twice about staying in the game.
The latest English Private Landlord Survey (2021) also showed that twice as many landlords (representing 29% of tenancies) were looking to sell their properties rather than trying to increase their portfolio.
So whilst S24 was arguably the primary cause of landlords leaving the market early on, other factors will now be contributing. Landlords are no doubt under pressure, with the English Private Landlord Survey 2021 reporting that whilst 45% of landlords were owed rent arrears in March 2020, eight months later (and with the Covid pandemic hitting the sector hard) this number had jumped to 75%. The average arrears more than tripled from £1,117 to £3,531. The final nail in the coffin for some landlords.
But where some see adversity, others see opportunity.
The UK’s largest BTL landlord, Grainger Plc openly plan to increase their market share significantly at the expense of landlords leaving the market. They also expect the private rental sector to jump from 4.7 million households to 7.2 million in 2025. [v] This may tell you all you need to know about where the BTL market is heading.
To compete and prosper, smaller portfolio landlords and family BTL businesses do need support. From association memberships, visiting landlord exhibitions and working with specialist consultants where appropriate. At Less Tax 4 Landlords we help make running a rental property business commercially viable for the average portfolio landlord. And if you're still unsure if you are in the best possible position, our free initial assessment will let you know if we can help.
Visit lt4l.co.uk/compete
[i] https://www.hamptons.co.uk/research#/
[ii] https://www.propertyinvestortoday.co.uk/breaking-news/2018/2/average-uk-rents-increased-more-slowly-in-2017
[iii] https://www.hamptons.co.uk/research/articles/record-47000-new-buy-to-let-companies-set-up-in-2021#/ [iv]https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1078643/EPLS_Headline_Report_2021.pdf [v] https://corporatewatch.org/grainger-the-corporate-landlord-cashing-in-on-the-housing-crisis/
With Section 24 hitting many landlords hard, it was predicted that some would decide to exit the market.
While some industry professionals believe property prices will face a considerable dip, others are predicting a slight decline, particularly in popular areas like London, with prices set to stabilise by the close of 2024.
However, with any form of downturn comes opportunity, meaning the following could be key to success:
Property prices will fall: Property prices have already dropped and are forecast to fall even further in 2023. However, with less properties likely to be on the market, demand will remain strong meaning it is unlikely that property prices will see a significant dip. Yet, with all reductions comes an opportunity for investors to secure assets at a lower cost– particularly if purchasing commercial units for a residential conversion, that have stood empty for many months.
Regeneration plans will drive investment: The growth in vacant commercial properties with extensive regeneration plans in multiple regions across the UK will provide an ideal opportunity for property investment and development during 2023. Not only will this enable developers, like HJ Collection, to leverage permitted development
rights to transform commercial to residential developments, but it will also enable investors to benefit from newly built BTR or BTL sites, sure to be in high demand in newly renovated city and town centre locations.
As more regeneration plans come to fruition in 2023, this is certainly something to look out for.
The property industry will hold its nerve: Despite forthcoming economic challenges, professionals throughout the property industry are of a similar opinion – yes, the next 12 months may be difficult, but the property industry will bounce back and is unlikely to dip to the levels seen in the 2008/09 recession.
This means that for investors, bricks and mortar still provide the most risk-averse investment opportunity, particularly when you consider growing rental demands and the ongoing housing crisis.
Ultimately, the next 12 months may prove uncertain for many, but with the right mindset and approach to investment, there is still much to gain from the property market during 2023… and beyond.
Reece Mennie www.hjcollection.co.ukDespite forthcoming economic challenges, professionals throughout the property industry are of a similar opinion – yes, the next 12 months may be difficult, but the property industry will bounce back and is unlikely to dip to the levels seen in the 2008/09 recession.
Following the economic challenges of 2022, many would argue that the property market remains bleak for 2023.
" A d o m i n a t i n g d e v e l o p e r w i t h a r o o t e d p u r p o s e t o c o n t r i b u t e t o e a s i n g t h e h o u s i n g s h o r t a g e t h r o u g h g r e e n e r p u r p o s e s . "
H J C o l l e c t i o n a r e a s p e c i a l i s t d e v e l o p e r f o c u s i n g o n P e r m i t t e d D e v e l o p m e n t r i g h t s a n d h a v e b e e n r e v o l u t i o n i s i n g t h e d e v e l o p m e n t s e c t o r . W i t h h u g e U K a n d W o r l d w i d e i n v e s t o r s u p p o r t , i n c l u d i n g s u c c e s s f u l j o i n t v e n t u r e p a r t n e r s h i p s , H J C o l l e c t i o n a r e a b l e t o p r o v i d e a m a n a g e d p o r t f o l i o c o m p r i s i n g o f m u l t i p l e c o n t r a c t o r s a n d d e v e l o p e r s n a t i o n w i d e .
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The end of 2022 wasn’t easy for anyone, including property investors. Mortgage interest rates skyrocketed, ongoing uncertainty about PRS legislation and minimum energy efficiency standards and increasing speculation about an imminent housing market crash. I understand why many of my landlord peers aren’t enthusiastic about 2023. And yet, I am.
Chatter around a housing market crash gives many of us unnerving flashbacks to 2008 (and maybe the 90s). However, the experts predict it’s unlikely to be anywhere near that bad. While sky-high inflation (currently 10.5%), rising energy prices, and an ongoing cost-of-living crisis indeed point towards recession, we don’t expect a significant rise in unemployment. The Chief Economist at RICS believes “the downturn in the housing market this time could be shallower”. More employment stability means fewer repossessions and forced sales, which in previous crises diluted the housing market when demand was low, crashing prices.
What’s more, the consensus from experts like Nationwide and Savills is that values will only fall by 5-10% in 2023. Crucially, prices will start recovering by 2024, and we’ll see 6.2% growth by 2027 (Savills). This momentary softening of prices offers property investors a fantastic purchase opportunity. Sweetened by the fact that buy to let lenders are willing to lend and capital gains will return swiftly.
The latest report from the ONS shows rents increased 4% in the 12 months to November 2022. However, new tenancies are seeing the largest rises, 7.9% for the same period
(Hamptons). Clearly, this growth rate is not sustainable for tenants, who now spend, on average, 35% of their monthly income on rent.
Nevertheless, Zoopla predicts rental growth will only slow to 5% over 2023, continuing the upward trend. What’s driving this? Demand. Enquiries for rental properties are up 46% on the five-year average, while available PRS properties are down 38%. With many first-time buyers delaying purchase plans due to tight affordability calculations, demand will only increase. Furthermore, existing tenants are staying in properties longer due to rent increases for new tenancies, so void periods will be minimal.
I know legislation uncertainty hangs over our community like an ominous weather front, but I stand by my previous statements that this is not yet cause for rash decisions. Rates have, thankfully, stabilised and crept down. While there may be a little more downward movement, this is the new normal, so speak to your broker to ensure you’re getting the best deal.
I’m genuinely optimistic about the opportunities available to landlords this year. It’s not perfect, but there’s investment potential if you know where to look and have the right team of experts supporting you.
November
The latest report from the ONS shows rents increased 4% in the 12 months to
2022. However, new tenancies are seeing the largest rises, 7.9% for the same period (Hamptons). Clearly, this growth rate is not sustainable for tenants, who now spend, on average, 35% of their monthly income on rent.
Some investors want the ‘hands-off’ approach. Working with an experienced partner to guide them through the process. Managing everything including sourcing the property, arranging finance, overseeing the legal process, undertaking refurbishment works and retaining the property for management.
Others may want to build their own portfolio but need to source the relevant skills and knowledge to get started.
Alternatively, a joint venture might be the preferred approach. Though often the sums available aren’t extensive enough to take a project forward. This is where investment in the North East becomes a really compelling, viable proposition.
Traditionally, investment in the capital was the panacea for building a profitable property portfolio. However, despite house prices in London typically being the highest in the country, rental yields can be average.
Lower capital entry, higher yields and high demand is turning buyers towards regional areas to achieve maximum results.
The North East of England, particularly Teesside which covers Middlesbrough, Stockton, Hartlepool, Redcar, Sunderland, Darlington and Durham, poses fresh opportunities for investors.
Here, rental yields are much higher than other parts of the UK. Private rental yields are consistently more than 7% Net. Buy smart and 8-9%
is quite normal. Our own serviced accommodation units across the region currently yield well over 13%.
2023 predicts a 5% mortgage rate as the norm. Presently clients are arranging mortgages on a 5-year fix of 5.5%. When calculating yields and income, this needs to be taken into consideration. It’s realistic to expect a return on capital of 10%+ on a mortgage of 75% Loan to Value forecasting.
Take property in London as an example. Many properties yield around 4%. However, the outcome isn't favourable when working with a mortgage rate of 5%.
Here in the North East, the governments’ levelling up programme, alongside projects like Teesworks; the UK’s largest and most connected industrial zone, has had a positive impact on the surrounding real estate market. Good capital appreciation is expected over the coming years despite other parts of the country seeing a downturn.
Setting realistic expectations is a challenge for landlords. Information shared on social media or during unreliable property training courses is often shrouded in misconception and leads to unrealistic confidence.
That’s why choosing the right property investment partner is so important.
Horizon Property service the needs of property investors, at all stages of the investment cycle. We’re a high street estate agent that also source a lot of
stock that may not be on our books, actively investing ourselves in varying forms.
Our management propositions include private rental, serviced accommodation and social housing, or supported living leases.
In 2021 we partnered with Workstays to offer a wraparound sourcing and management proposition for clients wanting hands-off investment in serviced accommodation. Resulting in three distinct propositions:
Working with clients on a hands-off basis, helping them build a profitable property portfolio that we can manage.
2-day training course programme in Middlesbrough. Aimed at clients wanting a ‘hands-on’ approach to building their portfolio. A realistic approach to getting started.
Range of options including a mechanism allowing multiple investors to joint venture with us, with investment starting at just £10,000. Similar to crowdfunding, this property bond is backed up by 1st charge security with an FCA Regulated Trustee.
Work with Horizon Property to build your portfolio, upgrade your knowledge or lend capital towards our own projects for a fixed return.
To learn more please email Denis Shail: denis@horizonsaleslettings.co.uk
The property investment market in the UK is not a ‘one size fits all’ proposition. As there are distinctive stages of the investment cycle, client needs differ greatly.
Through our Let2Bex scheme, we provide a cash incentive to landlords in return for a 12-month assured shorthold tenancy at local housing allowance (LHA) rates and a nomination to the property. An additional cash payment is provided if the tenancy is renewed for a 2nd year.
Cash incentive amounts vary depending upon size and location of a property.
By letting your property through Let2Bex you will receive:
- Cash incentive payments
- Cover for rent arrears and tenant damage
- A comprehensive tenant finding service
- A full photo inventory of the property
- A tenancy agreement and right to rent check
- A tenancy sustainment service
All with NO fees
For further information or to request an application form, please contact the Resettlement Team on 020 3045 3310 / housingresettlementteam@bexley.gov.uk
ASHISH SARAFF FOUNDER & CEO, NOVYY TECHNOLOGIES LTD
It is very time consuming to find like-minded people, source deals, do thorough due diligence, get a mortgage, manage the assets on a day-to-day basis – people have full time jobs to support their families. That’s where Novyy comes in; we are the friend they always needed – our unique ownership model allows us to break down the initial equity into 4 or more fractions which makes it easier for new and systematic investors alike. Our properties are rented and mortgaged – this means you are likely to start earning as soon as you buy a fraction in a property.. We aim for doubledigit Cash Yields, and we target 100% capital gains in 4 to 7 years.
Despite the startling implications expressed throughout the year that affected mortgage rates, stamp duty, and inflation, 2022 was a particularly successful year for sectors in the real estate industry. According to USwitch, UK landlords purchased £8.5 billion in BuyTo-Let (BTL) homes in Q1 2022. But this number is largely driven by institutions,
family offices, high-net worth investors and professional landlord - imagine how much bigger this number could be, if everyone else could join with smaller amounts in a hassle-free proposition.
Other sectors, such as Build-ToRent (BTR), HMOs, and PBSAs, have increased in the last year, due to economic growth and regeneration. These are all formidable investment options that provide investors with portfolio versatility. Beyond being financially viable, there is a chronic need to address the housing shortage in the country which can be accelerated with fractional ownership.
Vacant property demand remains high; redevelopment of various locations, in addition to the construction of new properties across the UK, will propel the property market forward in the coming years. Many opportunities exist in many sectors of the real estate industry, allowing investors to diversify their assets.
Diversification is an important component of investing as it lessens volatility and risk of loss in an investment portfolio over time. A varied investment portfolio usually delivers higher riskadjusted returns over time as opposed to a non-diversified portfolio, which makes it possibly the most important strategy for achieving long-term financial goals while minimising risk. Contrarily, investing in just 1 asset is binary and can go either way.
Real estate investment diversification can take numerous forms. One strategy is to invest in various forms of real estate. The other form is to accumulate fractional ownership interests in multiple assets.
Join us to experience a new way to systematically accumulate performing assets to leave behind legacy wealth for your future generations.
Ashish SaraffBeyond being financially viable, there is a chronic need to address the housing shortage in the country which can be accelerated with fractional ownership.
Imagine, every now and then one has £25K or £50K to invest which is not enough money to invest in property. They try to find 4-5 friends who could pool in the money and invest. But putting such a deal together consumes a lot of time.
50 % IS GREATER THAN 100
The ideology of scaling a property portfolio using none of your own money has grown exponentially in recent years. Gone are the days of saving for a deposit, investing in a buy to let property and repeating the process when you’ve saved enough to go again. No matter how deep your pockets are, there will come a point when you run out of cash when implementing this strategy. However this is exactly what I did over the first 10 years of investing in property, since buying my first house at the age of 22.
Between 2010 - 2020, I only bought with my own money - and it was tough! Back then, my bank balance couldn’t keep up with my ambition. I didn’t have enough capital to finish the first 9 properties I bought in my early 20’s, (which put me in hot water on the odd occasion). However every property I bought when using my own resources, thankfully resulted in a successful exit. So much so, I managed to buy 30 properties in the Home Counties by my 31st birthday. Had it not been for the profit from selling every house, I couldn’t have achieved this accolade in such quick succession without any financial backing.
Despite the success in my early 20’s, only those that have scaled in this way would know just how difficult it is. Looking back on this time, I have mixed thoughts. On one hand I’m pleased with the achievement. On the other, I clearly remember just how difficult it was. I remember thinking at the time, there has to be an easier way to create a property portfolio.
There certainly was…
In 2020 I saw the opportunity to create a second portfolio, but this time without the pain of scaling with only my own resources. At the time, I had a track record of buying, refurbishing, renting and selling 30 HMO’s that consistently performed year-on-year, with a 100% track record of profitability. Because of this, I thought long and hard about how to buy the next 30. I looked back at the data from all of the HMOs and calculated the ROCE had I owned 50%, not 100%. This 50% return ranged between 8-14% p.a - a reasonable return I thought. That’s when it hit me, ’50% is greater than 100’.
The idea of buying properties using 100% finance (and owning 50%), is far more scaleable than buying fewer properties and owning 100%. It was this slight shift in direction that enabled me to buy 30 more properties that previously took 10 years to acquire, but this time it only took 18 months.
Key learnings for property investing;
• First establish yourself in a property strategy before partnering with Investors.
• 50% is more valuable than 100%.
• The key to raising capital for property investment, ‘it’s not who you know, it’s who they know’.
I hope you find some value in this article. If you would like to find out more about Rockstar Property, please visit www. rockstarproperty.co.uk or email me directly on kane@rockstarproperty.co.uk
The idea of buying properties using 100% finance (and owning 50%), is far more scaleable than buying fewer properties and owning 100%. It was this slight shift in direction that enabled me to buy 30 more properties that previously took 10 years to acquire, but this time it only took 18 months.
Historians believe the earliest known record of the property industry has been found in cave drawings. It’s understood that an exchange was made between ancient people, in return for shelter. The idea of using your own resources to buy shelter/property has been with us for approximately 2.5 million years - but not anymore it seems.
I've repeated time and time again that there is no real good time to buy property from a timing perspective, given that so long as you buy good properties in good areas that rent very easily regardless of the economic or political cycle, it doesn't really matter when you buy, because you will still likely do well over the midto long-term. It usually doesn't make much sense to sit on the sidelines because quite often mainstream media and various property predictors are incorrect and therefore your understanding of the direction the market may be incorrect too.
Both the referendum and the pandemic are good examples of that as most people were saying that the property market was going to decline after those events and it didn't, in fact, it grew by more than the UK average, up until recently. A slight decline in prices though should not be of concern because over the past few years prices have grown substantially so a short term pullback in the market, is normal.
However, given that the property market in the UK has softened a bit over the past 6 to 12 months due to inflation, politics and market sentiment, there are less people
currently buying and this does create a buying opportunity. There is less competition for the best properties in the best locations, and I'm sure many of you have read that most wealthy people make most of their money in recessionary periods.
Therefore, if you are able to buy a property in a location with very strong positive driving factors, such as economic growth, new jobs, infrastructure spending, imcreasing reasons for people to want and need to live there etc. that gives you confidence in the location being better than it is today, in X amount of years from now. Then buying now is likely quite a good idea. Property prices are determined by supply and demand so if you can see stronger demand in a location in X amount of time from today then it's likely that property prices are going to be higher in that location after X amount of time, as the demand/supply equation will curve in your favour.
If you would like to discuss which are the best locations to be buying in the current market and take advantage of a market recovery then please get in touch with Nova Financial Group on 0203 8000 600, info@nova.financial or www.nova.financial
Both the referendum and the pandemic are good examples of that as most people were saying that the property market was going to decline after those events and it didn't, in fact, it grew by more than the UK average, up until recently.
Given that buy-to-let property investment is a long-term purchase it should be looked at over a 7 to 10 year plus timeframe.
When you’re buying at auction, you need a lender who can work quickly to provide the finance you need – fast.
So when time is of the essence, we empower our team to make straightforward decisions to give you the fastest possible answer when you need it the most.
With over 15 years’ experience in auction finance, you can trust our common-sense lending approach on a wide range of residential or commercial properties and for a variety of personal circumstances – including if you’re self-employed or retired.
Bid with confidence on your next auction purchase. Any property used as a security, including your home, may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Recent research shows that 33% of landlords still use spreadsheets to manage their portfolio finances with a further 12% reverting back to pen and paper.
From April 2024 landlords with annual revenue in excess of £10,000 will need to submit quarterly tax assessments in addition to an EOFY submission adding copious amounts of increased administration and record keeping. This, along with the growing pressure to achieve EPC ratings of C or better will push some property owners to the brink and often over it.
The first key step is to understand your portfolio and where your £££’s are going in tune with building a strategy to ensure that you maximise yields over prolonged terms.
Property condition audits/inspections
are that first key step to understand the make-up of your assets, to fully be able to gauge areas where to invest and where to divest. This will give you a ‘health check’ of the portfolio and enable a plan to be put into place around long term improvements that are either ‘would likes’ or ‘must haves’. For example the carbon footprint of a property portfolio is often not known or not known in detail. Ignoring this could create a funnel whereby large financial outlays could present themselves as we creep toward 2030 and subsequently 2050.
Robust, agile software such as the offering from Spydertech will provide
landlords of all sizes a tool to be in control of their assets and ensure they are keeping their investments in the best possible condition to maximise the life span whilst delivering reasonable returns. With a bespoke platform to inspect all facets of the property that will help landlords make concise, informed decisions coupled with a work flow management system to ensure detailed historical data is stored providing a single source of truth and will be used to shape future works and identify trends before they become expensive issues.
Spydertech’s flagship product, ‘Spyderflow’ is an iteration that has been used in Australia’s social and public housing industry for over 20 years servicing upto 40,000 homes in some instances and comes with a depth of knowledge and experience that is the backbone of what this has been built on along with some cutting edge modern additions.
With modern demands of landlords increasing almost daily and yields moving in the opposite direction the clever deployment of technology is essential if property investment is to remain a viable vehicle to ensure the industry survives.
If you would like to hear more about how Spydertech may be able to assist you please reach out to us through info@spydertech.net.au and the team would be happy to discuss further.
www.spydertech.net.au
The first key step is to understand your portfolio and where your £££’s are going in tune with building a strategy to ensure that you maximise yields over prolonged terms.
With the cost of living going up exponentially worldwide it has never been more important for property owners to fully understand and manage their portfolio’s efficiently to ensure they are not losing money through the front (and back) door.KAM DOVEDI FOUNDER PREMIER PROPERTY GROUP
I’ve created 5 simple steps that you can read below now, and these 5 steps have helped me survive the last 3 recessions.
A lot of people out there, especially developers base their numbers on the best-case scenario. They work out the numbers according to if everything went swimmingly, but as you know, like anything, there are variable factors out of our control, so always crunch the numbers before you buy on the worst possible scenario. By doing this, you are de-risking, and if everything goes swimmingly, which it does too, you’ll be in for a nice surprise.
Being a landlord can be a lonely journey, so it’s time to build a power team and support network. Create connections and relationships with people who are ahead of you, who have systems and processes that you can use. I mean, that’s what landlords do with us, they follow the information we share, they listen to us on what’s about to happen next, and they come and meet us and network. It’s a smart way to get peace of mind, and in the current climate we are in right now, you can’t put a price on peace of mind
Learn the proven ways to keep the money you make. Taxation can be simple, but people choose to overcomplicate things. Your taxation strategy needs to be personal, it needs to be clear cut, and it also needs to be LEGAL. One of our sister companies
at Premier Property is Premier Tax Planning, and we have a tonne of free resources that you can tap in to. One of them is an online masterclass about how you can minimise your property tax. To join us, email hello@premierproperty. co.uk with the subject – Landlord Show Tax Gift
#4 The Finance Market is changing, are you ready?
Property finance products are changing, loan to values are changing, rates are changing, which is having a wider impact on the economy. Now is the time to get an excellent mortgage broker if you haven’t already, one who is ‘wholeof-market’. If you have rates that are about to expire, it’s time to move quickly and act proactively to get the best finance deals in the market.
#5 Don’t miss this huge window of opportunity
During this recession, more millionaires and billionaires will be created than at any other time in the economic cycle, and people will look back at this moment we have right now as a missed opportunity.
They will kick themselves, because they would have Lost 10 years, £100,000s if not millions of pounds, and all that time to enjoy their life with the people they care about.
That's a fact.
At the same time, during the coming months, more people will lose their jobs, income and properties than at any other time in the economic cycle.
That’s also a fact.
The window of opportunity you have right now to create and secure everlasting wealth is closing in, so get informed, get upskilled and let’s make it happen.
Ofcourse, many landlords choose us to help them with the information they need to become successful property investors and developers. As a thank you, we have resources that you can access by emailing hello@ premierproperty.co.uk now and we will send them across.
Property finance products are changing, loan to values are changing, rates are changing, which is having a wider impact on the economy.
2023 is a new age of property investing. With the changing economy, a looming recession and a cost of living crisis, these truly are unprecedented times for landlords. So how can you still prepare, plan and profit during these uncertain times and secure your own financial economy?
Purchased an additional property within the last 4 years?
Did the property need any work?
Due to recent change in legislation you may be entitled to a full Stamp Duty rebate.
