ON THE HOUSE Magazine - Issue 1

T H E F R E E M A G A Z I N E F R O M T H E B U Y T O L E T P R O P E R T Y G R O U P

Could this strategy be the holy grail when it comes to passive property investment? We hear from the best to find out

Property can be grimy! You need to roll up your sleeves. But if you do, you can reap the rewards! Head to p30 for a before/after

Are you lacking momentum in your bricks and mortar business? Have you considered this strategy and most importantly finance to get you started?

It’s soon going to be all change when it comes to the government EPC standards for rentals. Should you just wait and see or get moving on upping your portfolio’s energy performance? The experts weigh in.

Meet the man who is helping to change expat expectations when it comes to investing in the UK and be inspired by his hustle

If you want the dream, you are going to need the team. Buy To Let Group partner Astonia Associates explains more

Everybody loves a good resource list! Here is ours, with everything from suppliers and partners to books and podcasts to help you work on the practical and philosophical sides of your investing journey

Buy To Let Group founder Wes has the last word as he goes off on one about property training scams. Have a read and let him know what you think

JULIAN@ONTHEHOUSEMAG.CO.UK

BUY TO LET PROPERTY GROUP

ON THE HOUSE Magazine has been made with constant care to ensure that its content is accurate on the date of publication. The views expressed in the articles reflect the author(s) opinions and do not necessarily reflect the views of the publisher and editor. The published material, adverts, editorials and all other content is published in a good faith. ON THE HOUSE Magazine cannot guarantee and accepts no liability for any loss or damage of any kind caused by this publication and errors and for the accuracy of claims made by the advertisers. All rights reserved and nothing can be partially or in whole be reprinted or reproduced without a written consent. ON THE HOUSE Magazine is produced by Fired Up Media Ltd on behalf of The Buy To Let Property Group. Fired Up Media Ltd is an ICO registered company.

Editor’s Letter

Welcome to ON THE HOUSE magazine – a labour of love for the group that has helped me so much.

Just like I did, many get into property to claw back some of their time and pursue financial independence. I am one of the ‘yay-sayers’ who believes that, despite everything the mainstream media says, it is possible. In fact, it’s something that I’ve been fortunate enough to achieve recently after a good few years research, deal-hunting, renovations and taking advice and inspiration from the Buy To Let Group on Facebook.

As Sean Thomson points out in the ‘My Journey’ piece on p32 property investors are rarely ones to sit around and twiddle their thumbs, we are actiontakers. So, when Wes asked my advice for starting a magazine for the group, I knew my previous experience in editorial could be put to great use giving back to the group that has helped me achieve a big life goal.

And that is exactly what Wes and I hope ON THE HOUSE magazine, the free magazine for the Buy To Let Group will do, help you achieve your property investment goals.

We aim to showcase and celebrate group member success stories - see Round Table member Kev Dendy making moves on p12 or enjoy some property renovation porn on p30. Who doesn’t love inspiration from others who are out there making it happen?

We will seek sit-downs with experts so you can learn from their mistakes and masterstrokes (check out the cover story p26, strategy focus p21 and practical EPC advice on p16).

We plan to bring you the important up to date information you need to stay ahead of the curve as an investor (p6-8) and we could even be the place where you can vent your frustrations (Wes is up first, p39)! Plus, if you just need a good reading or resource list head to p38

And if that wasn’t enough, all of that is completely… On The House!

We hope you enjoy the first edition and continue to find the Buy To Let Group a useful resource in your property investing journey.

Thanks for your time!

Julian Pletts

EDITOR

PAPER TRAIL

What the government white paper means for landlords

The white paper ‘A Fairer Private Rented Sector’ features proposals that the government hopes, if implemented, will deliver a more equitable, “secure and higher quality” private rental sector. Whether or not you believe it will achieve those aims or indeed how much will remain intact when number 10 sees new leadership and the paper makes its way through parliament, here are the key points to be aware of.

No-fault evictions scrapped

The ability to give notice to tenants that at the end of the tenancy they need to vacate the property - section 21 - is to be axed under the plans. A landlord will now be required to provide and prove a valid reason for eviction such as moving into the property, selling the property or persistent rent arrears – two months’ arrears, three times within three years.

Fixed terms also chopped

The government white paper proposes scrapping of fixed term contracts meaning that your rental contract with your tenant would be a rolling tenancy from the start. This effectively removes an end or renewal date. The tenant needs to give two months’ notice of plans to move which can be given at any time, meaning tenants can essentially let a property for the short term of two months and then move on. However, this is not extended to landlords who will not be able to end the tenancy for any reason in the first six months.

Rent increases – only once per year

Under the white paper proposals rent increases will only be allowed once per year, tenants must be given two months’ notice of the increase and will be able to fight “excessive” rent increase.

Fluffy is staying!

You will now not be able to “reasonably withhold consent for a tenant to get a pet”. So, when a ‘new’ Great Dane shows up a week into a tenancy, you know who to thank! At least you will be able to insist on tenants taking out pet insurance as a condition of the tenancy.

UK rental price growth has remained strong with a 2.47% increase reported during the second quarter of the year according to The Deposit Protection Service (The DPS). This represents the largest increase that the organisation has seen since 2007. While posters on the Buy To Let Group of landlords being inundated with viewing requests have been frequent, the UK’s largest protector of deposits, The DPS, is uniquely placed to monitor actual rental price fluctuations. The average UK rent rose from £849 to £870 during the quarter and The DPS also noted an 8.21% rise year on year. Scotland, The North East and the South West were the fastest growing regions in the quarter up 5.19%, 3.89% and 3.84% respectively. The only region to record a drop was Northern Ireland, down 0.52%.

“The last 12 months of rent increases, including a significant acceleration during the last quarter, shows that the price of renting forms a substantial part in rising living costs across the country,” said Matt Trevett, Managing Director at The DPS.

Among the property mix it was detached properties that saw the highest annual rise of £105 (9.73%) now at £1,185. Flats rose by £73 (8.99%) to £885 and semi-detached properties were up £69 (7.89%) to £943 with terraced properties at £839, up by £56 (7.15%).

“A mixture of tenants moving back into cities, continued desire for larger rental properties with more space and a current shortage of properties of all types is causing rent prices to rise,” said Trevett. “Despite the current economic environment, many tenants still seem prepared to pay in order to secure a rental property.”

RENT RATES CONTINUE TO ROCKET BUILD TO RENT CEMENTS POSITION

The build-to-rent (BTR) sector is growing at a significant pace with the total number of properties in this sector built or in the pipeline up 13% year on year to 237,000 according to the British Property Federation (BPF). The analysis from BPF published at the end of July also noted that there was a record number of local authorities with BTR housing in their plans.

“Our analysis for the second quarter of the year further underlines just how rapidly the UK Build-toRent sector is expanding,” said Ian Fletcher, BPF’s Director of Real Estate Policy.

The number of houses completed in the sector in Q2 stood at 73,739, a 16% increase, and underlining the long-term growth of the sector, 47,764 units were under construction and 115,859 in planning, up 13% and 10%, respectively.

“We can see a broader spread and increased presence of BTR across the country, with more local authorities including it in local plans and considering it a vital component of future housing supply,” added Fletcher.

Labour: Nationwide holiday let licensing

Shadow housing secretary Lisa Nandy has proposed a UK-wide licensing system for holiday lets in an effort to preserve the spirit of holiday destinations. The Labour MP said her party’s plan would allow areas to reap the rewards of holiday season income while avoiding out of season ghost towns. The proposal echoes a scheme being introduced in Wales where councils will be able to dictate the number of second homes and holiday lets through a licensing programme.

Cheers to property investment

Only fine wine, designer watches and fine art outpaced property as the best investment classes over the past year according to research by Stripe Property Group. Vintage plonk and rare timepieces grew by 16% a piece, whereas fine art returned 13%. Property beat rare whisky, gold and other classes with capital gains of 9.3% annually. “While there are a select few investment options that have yielded a larger return, the actual increase in value is likely to have been far lower than the level of capital appreciation seen across the average UK home,” managing director James Forrester said.

PropTech eyes EPC opportunity

IMMO, a property technology (PropTech) investment platform is reportedly going to spend £1 billion on buying and retrofitting rental properties with poor EPC ratings. Spying an opportunity, the firm was reported as saying it would bring those properties up to a C ratings in time for when the energy efficiencies for rentals are expected to change in 2025. According to The Times the PropTech firm already manages a portfolio of £66 million in property and has raised another £66 million recently to add to its estimated £2 billion worth of funds.

SHOCK: LANDLORDS PROVIDE REASONABLE HOMES

One of the longest-running private rental sector surveys reveals what we all already knew - the vast majority of tenants are treated reasonably well, have good accommodation and choose to end tenancies of their own volition. The English Housing Survey (EHS) is a national survey of people’s housing circumstances and has been carried out periodically since it was first run in 1967. It paints a rosier than usual picture that the mainstream media happily chose to ignore.

KEY FINDINGS

The report goes on to say: “The majority of [tenants in the private rental sector] were satisfied with their current accommodation. They are more likely to be satisfied than social renters but less likely than owners.”

“The level of satisfaction with current accommodation has remained relatively stable in the PRS since the beginning of data collection in 2008.”

the amount of time private renters have lived in their current accommodation

of private renters are satisfied with their current accommodation…

...beating

75%

for social renters

said they left their last tenancy because their landlord or agent asked them to leave

...This is lower than the

19% for social housing

80% 4.2 Years 23% or 970,000 dwellings Only 6%

of private renters left their last tenancy because they wanted to move

“likely to fail” decent homes standards…

73% 17%

of private renters considered making a complaint to the lettings agency or landlord

Sometimes it helps to get a second opinion on your latest deal. This question got 125 of them on this high-yielding prospect.

Top contributor Alizon marks yet another housing minister biting the dust! The group was sceptical about whether it would make the slightest bit of difference and plenty successfully called Boris’ ousting soon after.

This started a hot debate with a very topical question right now. The answers ranged from those selling up and getting out of the game to those deal-hunters who believe as long as it stacks then have at it!

Property is not all rent cheques and ROIs, sometimes it is grimy and you have to roll your sleeves up. This poster certainly understands that!

Paul Davies, a specialist at the Group’s preferred mortgage broker Ramsay and White, putting his money (and the bank’s) where his mouth is and showcasing this BRRR project. (Read all about the BRRR strategy on p15)

GROUP GOINGS ON

The Buy to Let Property group is one of the busiest, most vibrant and supportive groups for property investors that we know on Facebook. On any given month there are thousands of joining requests, almost a thousand posts and hundreds of thousands of post views. Here are some of the most popular ones that got you talking over the last few months, some success stories along with some stress stories and a couple that the facepalm emoji was just invented for!

A group member shares a link for one of the government’s latest mortgage missives. The idea received a cool reception, to put it mildly, by the group.

The BTL Group’s preferred solicitor partner is back in the game with a major purchase and big plans for a 13-unit Aparthotel. Great to see a another property professional walking the walk!

This poster got us all thinking about the rising interest rates and whether or not the numbers stack with lending at the moment…

The group is taken for a trip down mortgage memory lane to the 90s when the base rate started climbing down from a whopping 14% to 6% by the end of the decade.

Something doesn’t quite ring true for this landlord!

ONE TO WATCH:

KEV DENDY

Hi! Thanks for taking the time to talk to ON THE HOUSE Magazine and share your story. Let’s start at the end… What is your current property investment situation?

We have recently purchased our first three BTL properties in a very short window! March 2022 to July 2022. It’s been a long road getting to this point, having started our property journey in December 2020. Our patch is in South Wales - a mere one and half hours from our home in Cheltenham. We worked very hard in the local area getting to know all the estate agents and to just walk the streets looking for opportunity. Even in a buoyant market we were still able to get great deals and all of ours are off market opportunities. The first property we grabbed due to our relationships we had built, and the other two are from an existing landlord who is moving area and wanted a quick sale. We are on our first main refurbishment with completion and first tenants due in at the end of August 2022. The second two properties are completing in the next few weeks and refurbishments to take a further four to six weeks. We have capital and investment to target another six properties in the next 18 months and are planning to go full time into property.

specifically my wife and children. We have an added layer in our household that tops most I think. Both of our boys are autistic (one is non-verbal and needs constant care) and the other, whilst able to lead a fairly trouble-free life is socially very awkward. They are our world and no matter what happens in life we have provided for their future in purchasing cash-flowing assets to support any care they may need later in life, particularly our oldest. I teach my youngest about property rather than a 9-5 job. The choice is his path, but he is growing up understanding that he has options. He sits with me doing budgets and loves talking about refurbs and he is only seven. My family will always be my main reason for anything. Secondly, though I have had six figure salary jobs and most people’s ambition is to climb those rungs of the corporate ladder. In my field of marketing, to many people I have had a very successful career. The problem is at that level you are owned body and soul, 24 hours a day and seven days a week. Stress levels are high, work life balance is non-existent and it takes its toll. I have lived with feast and famine! As the most expensive resource in the company you are generally the first to go in an economic downturn. I have been through multiple redundancies. At a high level it can take you six-12 months to find a job at that level again so your lifestyle is unsustainable because your bills matched the income of your last job. I lived in Wimbledon for a long time and it’s my most favourite place – but a three-bed semidetached house in my old road is now currently worth £1.25 Million. My story shows that unless you have income from sources that are not reliant on you being there physically, the minute that job changes or goes your income drops to zero, as does your lifestyle. I need income that does not revolve around me doing a nineto-five and financial freedom is my goal from property. My wife and I are great at motivating each other and with both our minds on this goal - we will succeed.

Every issue we will celebrate an investor who is taking action, overcoming obstacles and building a better future through property. First up, Kev...

PICTURES: Far right - park run pals! This image - Kev’s Marvel inspired portfolio key rack. Top right - Kev and his fellow park-running wife. Bottom right - One of Kev’s first South Wales investment properties

Did you dive straight into property or was there a period of learning and skilling up before you were confident to get started?

T he weird thing was that at any time prepandemic I could have purchased lots of properties because of my salary. Once I had made the decision to go for it and got upskilled and completed some property courses, learnt about everything I needed to get started, my ability to get mortgages had dried up – lenders were unforgiving through that period. I had confidence issues around refurbishments, so surrounded myself with people smarter than me who had all the knowledge and were very generous with their time and patience. I feel I will make lifelong friendships with people I didn’t know 12 months ago.

Talk us through those early challenges as an investor both literally and also mentally – what were the challenges that you faced?

I invested in some expensive property training that was not value for money. I can’t say I didn’t learn but it makes you question the industry and if its right for you. The pandemic was terminal for my long-term career in the corporate world but gave me the time to mentally prepare for the property journey. The biggest challenge I think we all face is to keep going when you are getting nowhere, deals don’t appear, money lending is hard to get access to and focus is hard no matter what you do. I felt like everyone else was succeeding and I was the only one that wasn’t.

What kept you going?

I was close on more than one occasion to walking away, no doubt about it! I was fortunate enough to be part of a property Round Table group (See p37) who have kept my spirits up and kept me on the true path. Like-minded people who love property and helping you are a must. There is no jealousy there – I was particularly happy to see one of my close friends in the group reach financial freedom.

What has been the most effective techniques learned or things you have done to help you achieve your goals?

We have gathered £40k in investment funds from angel investors by putting ourselves out there. It took me 26 minutes to write two facebook posts and we received signed documentation in less than a week. That’s £20K per 13 minutes spent on it. We have interest out for another £50k of potential funds. We have numerous people who want to invest in us, ask us questions daily and are watching our property journey. I am good at social media (I spent 25 years as a Marketing Director) so can tell you, don’t worry about likes and comments on your posts – people are reading about it and following closely. Every time we meet people in the real world they ask us about it – the silent ones are the most interested! Don’t give up talking about your journey, you never know where it will lead and who might be watching.

What are your goals now?

We want to do commercial properties after our target of eight BTLs are achieved and the bigger goal of doing a property development from start to finish would be a dream come true. I am now the co-owner in a social housing company and we have already handed over a property to a care provider to look after 11 physically disabled people which fills me with pride – we want to do much more!

What advice would you have for someone who is a couple of years behind you and looking at the current market and thinking ‘I am never going to be able find a deal to get started’?

There are always ways of making money in property with little or no capital – I sourced a property for a company that gave me £10K straight away when I didn’t have access to capital. I have found three off market deals in the current climate so prove it can be done even in 2022. The best time to get into property was 20 years ago the second best time is right now because you can’t change what’s past. The best advice is do what others won’t. We ring up estate agents every week without fail whether they have stock or not (we drop in a box of chocolates to the agents when in the area), that way they know us and we get calls before anyone else gets a look because we are sincere and take time to build relationships. It’s damn hard work! But one of those relationships we built doing this just saved me £30k!

Lastly, when you are not flicking through the Rightmove app or putting in the hours at your day job – what do you like to do to relax or find some headspace? Any hobbies?

I used to play a very high standard of football and love to watch my local team Cheltenham Town F.C, I run parkrun every week with over nearly 450 5k’s done. I am happy to be in a place in my journey where my wife and I go out every week on a date night and there is nobody I would rather spend time with drinking coffee, enjoying a fantastic nice restaurant or spending time with. Our kids have made it hard to travel in the last few years but our dream is to travel the world together and spend six months here and six months abroad.

BUILDING MOMENTUM

In his column, Joel White from Buy to Let Group preferred mortgage broker partner, Ramsay and White, breaks down the basic steps of a popular portfolio-building strategy and, importantly, how to finance it

You can’t go too far wrong with straightforward buy to let investing. Buy, rent and hold. As the mere cat would say, ‘Simples’. Realising significant gains from this method though, as you wait for property values to rise significantly, can take a long time. However, add a dash of forced appreciation to the equation and you can shave years off your portfolio building aspirations, achieving a higher ROI by recycling your cash out more effectively.

Enter the BRRR method.

Now, it might sound like a strategy involving buying properties in the arctic circle, but it stands for Buy, Refurbish, Refinance, Rent. The BRRR Method is a real estate investing technique that consists of purchasing a property, fixing it up and adding value, refinancing it and then renting it out. Older or poorly maintained properties with restoration potential are examples of properties that are perfect for this strategy.

The reason many get excited about BRRR is that, done well, it is a very effective strategy allowing you to develop your portfolio quickly often using little initial investment.

Sounds great! Let’s break it down.

The steps are as follows:

Buy: The first step is to acquire a property. The criteria usually include properties with a lower value that can be improved through additional work, such as a refurbishment. The money required to get into a BRRR deal is largely based on the purchase, therefore you must be confident that your figures add up at the time of purchase. Many investors fund the initial purchase with personal cash, from releasing equity from their home or by using a bridging loan.

Refurbish: During the refurbish stage, you improve the value of the property by adding features or

upgrading systems. The objective of this stage is to perform only the essential improvements that will immediately increase the property’s capital appreciation and/or rental value.

Refinance: When the work on the property is complete, it’s time to refinance onto a longer-term product such as a buy to let mortgage. Refinancing after the work is done allows you to borrow at a rate based on the property’s improved market value –so you can borrow at the higher price and ideally recycle out the capital you put into the deal. This can then be used as a deposit to purchase the next property.

Rent: When the property is ready to rent out and you have refinanced onto a longer-term product such as a mortgage, it’s time to find a tenant and rent out the property. The rental income of the property should cover any costs (mortgage, insurance etc) as well as provide you with additional monthly cash flow.

FUNDING YOUR BRRR

Bridging loans are a popular BRRR finance choice for a variety of reasons, including supporting commercial and residential property transactions, auction purchases and renovation and development projects. Bridging finance is also an appealing choice for new investors as it means they can access deals quicker than it would take to save up the cash for a deposit.

Bridging finance is fast and flexible and can be secured in a number of days.

The BRRR method is a popular technique for both developers and investors. It can be complicated and a fair amount of work, but it can be a great way to get started in property or grow your portfolio as it allows you to gain momentum quickly – it is even also known

as momentum investing.

Additionally, there are other property methods that can be used in accordance with the BRRR strategy that enhance its overall effectiveness.

Not sure which property strategy you should undertake? Or maybe you’ve got a question about the best finance to get started in property?

Speak to our award-winning property finance advisors today at ramsayandwhite.com.

JOEL WHITE Group Managing Director Ramsay and White

ARE YOUR EPC PLANS DIALLED IN?

Heraclitus, a Greek philosopher, is quoted as saying “change is the only constant in life.”

When it comes to the private rental sector in the UK that certainly rings true. If it isn’t having to rewrite our entire business model in the wake of George Osborne’s penning of Section 24 or having to act as unofficial border control guards with right to rent checks – to be successful investors you have to roll with the punches.

One jab the government has in the works –minimum EPC rating requirements for rentals potentially changing from E to C for 2025 – could leave landlords of older properties down for the count.

Despite making another appearance in the Queen’s Speech earlier this year delivered by her understudy, any changes have not yet been signed into law. We are however seeing it effect how lenders and landlords alike approach the market.

ON THE HOUSE Magazine talks to experienced investors and experts about whether a wait and see approach is best or if it would be wiser to devote effort now to upping your portfolio’s energy efficiency before you are forced to do so.

RENEWED INTEREST

Paul Crovella of Swindon Energy has been doing EPC assessments for 15 years. He observes with a smile that assessors have gained a bit more respect in recent years. “We’re suddenly becoming much more involved and important than we were 15 years ago, where we were looked as this guy who is just going to come and count your light bulbs!” he laughs.

Jokes aside, Crovella suggests that the furore surrounding the government’s proposals is somewhat premature and leans towards a wait and see approach - keeping an eye on the property media for updates.

“They’re going to have to come up with an extremely robust exemption register,” he says, giving the example of a property that was a low F rating and has just scraped current letting requirements to become an E as very unlikely to be able to make the grade again.

“I think [the proposals] will end up being deferred. I doubt it’ll even make its way through into legislation but it’s scaring a lot of people and it’s creating a false move towards a C rating.”

Adam Lloyd of EPCExperts.co.uk agrees there will need to be some exemptions but doesn’t expect too much deviation from the proposals as written.

“I foresee it applying to all properties,” he says. “The majority of homes are in towns and cities with a gas connection so it should be easy enough to scrape a C on these properties. Only properties that are on oil or LPG will struggle or listed buildings that cannot have wall insulation.”

So, back to a waiting brief. However, there is a good chance if you have a portfolio of traditional mid terrace BTLs or similar that your hand is forced earlier. Some mortgage providers are offering more attractive lending deals on refinancing and new lending for properties with an EPC rating of C or above. As the cost of borrowing continues to climb, this might help landlords maintain margins.

“I’m doing that quite a lot at the moment where [landlords] are saying, ‘I’d like a C, but it’s currently a D’,” notes Crovella. “So, they just pay me a fee to go back out and run the figures again. It’s cost effective. If they get the C and remortgage for a 0.5% lower mortgage rate, well I’m helping them get a real good discount. I should charge more!”

Martin Baker, the founder of EPCman.co.uk, an online network of assessors says tenants will be hit by the changes too.

“When the need for a C rating comes in I can see many landlords selling up which will in turn push

rental costs even higher with fewer properties available,” he says.

Across the network he reports an increase in recent years of landlords forward-planning for the changes: “I am encouraged that there are still many landlords out there who take pride in their properties and who are taking the steps that are necessary.”

PAUL CROVELLA Swindon Energy

How proposed EPC changes are going to work are as confusing as the rankings itself. So, should you be working to boost your portfolio’s energy rating now or waiting for more detail to emerge?

WASTED ENERGY

While it is difficult to have a blanket estimate for costs of improvements to get a property to a C rating, EPCExperts’ Lloyd offers some general estimates to give new landlords an idea of what they might need to factor in.

“For the majority of properties, it will only require an up to date boiler and loft and wall insulation. Perhaps £2,000 for boiler, £5,000 for wall insulation. But you could skip the wall insulation and just go for solar, again around £4,000 for solar, max,” says Lloyd.

Among the most common misconception he adds is that just switching to more efficient lightbulbs can make a big difference.

“I have customers say they’ve just decorated and put new carpets down thinking the EPC will improve!”

Another is double glazing - being an expensive improvement this does not necessarily fair as well as people might have hoped due to the payback period being longer than other changes.

Worse still, Crovella describes those who went it alone and failed to consult an assessor before

carrying out major works.

“I’ve had people whip out oil boilers and put in a heat source pump because they think it’s a new bit of kit that’s going to really push up their score and they’re going to be A-rated,” he recalls. “I’m going out there and producing an EPC that’s lower than they had before and they are beside themselves shouting at me that I’ve got it wrong and they can sue me and I’m saying, why didn’t you speak to me first? You know, before doing this, I could have told you that air heat source pumping in an old sixties bungalow was a disaster. ‘Oh, the government say air source pumps are great?’ Well, yeah, maybe, but the EPC methodology isn’t in agreement.”

Some landlords though can take advantage of low hanging fruit.

“A big one we come across is having a thermostat on the hot water tank - a lot of our older properties, they haven’t got that, so the boiler and the hot water don’t talk to each other and the EPC methodology regards that as a fairly major failing,” says Crovella. “Therefore, you can get a competent plumber or electrician to put a band on, put the thermostat into the cylinder, and that can gain you some good points and make a big difference. That can jump you up.”

MARTIN BAKER

The EPC Man Network

THE PROPOSALS

A quick recap of the key points of the EPC changes that the government is proposing. The Minimum Energy Performance of Buildings Bill is in the second reading in the House of Commons at the time of writing.

All new tenancies will be required to have an energy efficiency performance of at least EPC Band C from December 31st, 2025

All existing tenancies will be required to be band C by all existing tenancies must be at least EPC Band C from December 31st, 2028

The requirements will be “where practical, cost-effective and affordable” as defined by regulations introduced by the Secretary of State.

C INTO THE FUTURE

So, while the general consensus might well be to take a wait and see approach to how the proposal might evolve in the next year, it is certainly prudent to get to know your EPC assessor and start modelling the costs associated with making a passing grade. This is particularly relevant if you have D-rated properties that are due for refinancing. There are some definite no-nos the experts would advise most investors against at the moment until the EPC methodology adjusts.

“Never install an electric boiler. Electric panel heaters are extremely bad on the EPC, regardless of how modern and good they look. Changing an electric meter to Economy 7 tariff can push up an EPC by a grade,” says Lloyd.

As an aside, Lloyd advises landlords with tenants on low income or benefits to looks seriously into the new Eco4 grants.

EPCMan’s Baker offers up a final encouraging perspective: “My thoughts are that all landlords should not be too quick to throw in the towel when it comes to C rating time. A little time and effort, and some cost, will get you there with your properties and it will be a benefit in the future with a higher property value and potentially higher rental returns. Get a new EPC done now so that you know what potential costs you may be in for. You may be pleasantly surprised!”

Astonia Associates

Accountancy

Tax Finance

• Rent to Rent (R2R)

•

•

No Money Down Strategies (NMD)

Build to Rent (BTR)

Build to Sell (BTS)

Serviced Accommodation (SA)

Lease Options (LO)

Property Development (PD)

Land Acquisition and New Build (NB)

Analysis of Additional Tax on Enveloped Dwellings (ATED)

Ad Hoc Scenarios

We have created a unique team of tax specialists that provide all Property Investment and Property Development tax and accountancy services under one roof. We are now one of the most highly regarded and frequently referred professional tax specialists in many of the popular property specific social media platforms.

Our CEO Paul Weller is also a seasoned and active property investor/developer himself.

Our operational experience allows us to offer our clients a more comprehensive service as we personally invest in of all the property strategies . Tax rules and tax laws are constantly changing and we ensure that our clients are structured tax efficiently for today and into the future.

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SOCIALLY MINDED SOCIALLY MINDED

As property investors we are always looking for win, win, wins. So was Sue Sims when she came across the social housing strategy. Could this be the route to truly passive income? She explains more.

Landlord bashing sometimes feels like the true national pastime, particularly when the budget rolls around or various political parties float their latest short-term solution to the long-term housing crisis in this country.

Luckily, most of us have pretty thick skins and are happy in the knowledge that we are providing high-quality, safe housing for tenants.

Furthermore, there are plenty for whom property has been a means to more time for volunteering and contributing to society in an even greater fashion.

For long-time investor Sue Sims there is a property strategy that is a win, not just in a financial sense, but also in providing housing and shelter to those in desperate need.

SUE SIMS

Genie Homes founder and social housing investment expert

Sims, who purchased her first property at just 21 and who has gone on to build a portfolio in the region of 40 properties, settled on social housing as a way to successfully, and if done correctly, enjoy strong and relatively passive returns.

IN THE FAMILY

She recalls how her parents, who were student rental investors in the 70s and 80s, suggested that she purchase a shop with a flat above it. After being told by one bank manager the only way she could get a mortgage was if her dad acted as guarantor, she was determined to find a way to buy it “under her own steam”.

“I went to see another bank manager and put forward to him a business proposal and really, fortunately, he said, ‘yes’ and we’ve sort of gone from there really. It was definitely because of my dad’s influence that I started in property,” says Sims.

For the majority of her early investing career, she focused on buy-to-lets and then later also gained experience working in a letting agency. It was through that work that social housing as a strategy first appeared on her radar.

“I had a director of a local social housing company approach me because one of the properties that we had up to rent was a student HMO which had missed the academic year,” she explains. “He said to me, can you go and approach the landlord? Would they be prepared to rent it to us for three years on a fully repairing lease? And that was when I first started with social housing. They took three properties quite quickly from the same landlord. So then I started to think because at the same time section 24 was

coming into play and I needed to find a way that I could make my properties work harder to cover the additional tax that we were paying.”

THE SEEDS OF A STRATEGY

Having seen it work for clients she decided to test it on her own properties.

“So, I converted a three-bed family home into a four-bed HMO and then did that a few times and saw it was working really well. And it was at that point, that I started to talk to landlords to say, this is something that you could do with your portfolio if you want to get something that is as close to being passive in property as it can be.”

The model is taking traditional three-bed or similar buy to lets and then converting them into small HMOs. Those properties would then be leased to a social housing provider who is paid by the local housing authority to house vulnerable or homeless people. The social housing provider would typically offer a longer lease to the owner of the property, typically between three-five years and commit to maintaining the property to a certain standard, cover all bills and return the property in a similar state at the end of the lease.

There are, of course, conversion costs to factor in to turn the properties into compliant HMOs, however as

the examples on p23 and p24 demonstrate, the standard of renovation does not need to be to the same level as HMOs aimed at professional tenants including no need for en suites.

What’s more, as Sue quickly discovered, it could be a potentially lucrative move (see panel p23).

In fact, it was such a successful strategy that Sims has since become somewhat known for the social housing in and around her native Birmingham having set up Genie Homes which offers landlords social housing management services, as well as HMO and single let management.

PASSIVE IS POSSIBLE

“It is passive for the landlords that we work with because we manage the property on their behalf,” she explains, noting that some do question why they need someone to manage a property they are handing over to a social housing provider.

Well, the answer is not all social housing providers are created equal and Sims had to kiss a lot of frogs to find a select group of reliable firms she is confident working with.

“If you don’t go into that property on a quarterly basis, you do not know whether that maintenance is being done right. So as far as I’m concerned, it’s passive for the landlords that I’m working with because we are making sure their houses

are maintained.”

As with any property strategy, not everything is plain sailing and you have to adopt a problem-solving mindset if you want to succeed.

“The biggest challenge at the moment is getting a mortgage that will allow it,” she says. “And then secondly, your insurance is probably going to be double what you would pay for a normal house if it was just a family let.

”Sims is also candid about the fact that with rents rising steeply in the private

RUNNING THE NUMBERS

A

BTL

Purchase price: £128,000

Deposit: £32,000

Stamp duty: £3,900

Legal fees: £2,000

Broker fees: £1,000

Refurb: £5,000

Money in the deal: £43,900

Rent: £7,800

Mortgage £3,840 (4%)

Cashflow: £3,960

ROI: 9%

rental sector that immediate financial returns of social housing versus traditional BTLs might not be as attractive as it once was.

“When I first started looking at the comparison on the numbers, a three-bed house in Birmingham would rent for like £700 to £750. Converting it into the four-bed [social housing] HMO would pay £1,125 a month so there’s a big difference and you’d get paid back really quickly on the conversion. That same three single let house now would probably rent for £900 to £950,” she explains.

It all depends on what you want she says and notes that you really need to drill down into the long-term figures as social lets still offer some strategic advantages.

“If you’re renting your house to a private family, over a period of four or five years, you might have two changes of families, maybe three,” Sims says. “So, you’re going to have some void periods and council tax bills to pay. You’re going to have

SH HMO

Purchase price: £128,000

Deposit: £32,000

Stamp duty: £3,900

Legal fees: £2,000

Broker fees: £1,000

Refurb: £15,000

Money in the deal: £53,900

Rent: £13,500

Mortgage: £5,760 (6%)

Cashflow: £7,740

ROI: 14.3%

redecoration in between. You’ve got to factor in all of those figures when you do that bigger comparison. That’s where I think some people don’t think long-term. What they are thinking about is, ‘if I do this for 12 months, I’m only going to get an extra say £1,500 over the year, it’s not worth doing the conversion.’ But actually, when you extrapolate the figures over a longer period of time and you put in those void periods and the additional maintenance that you’ve got to allow for, it’s a slightly different picture.”

In addition to that, one extremely relevant benefit is that social providers normally cover all of the utilities during the lease. As the cost of gas and electricity continue to skyrocket and HMO landlords have had to react and evolve their strategy to mitigate this, social housing landlords do not face this issue.

GET STARTED

So, for those who want to consider the handsoff approach to investing through social housing, what advice does the Genie Homes founder offer up?

“The first thing that I would do would be to speak to a broker to find out whether or not you’re going to easily be able to get a mortgage because that has a big influence on what you’re potentially able to do or not,” she says. “Secondly, find a housing provider that you can work with. Once you know who the provider is and what they require you can then go shopping. You will know what type of property they want, how much they will pay and you can then run your numbers to make sure it will be a viable deal… it is much harder to have a property and then to find a provider.”

If you want to find out more about the social housing strategy, follow @hmosuesims on Instagram or get in contact with her via geniehomes.co.uk

Sim’s first investment property is now home to her business

TIME TO PARTNER UP?

Sue Sims is also one of the founders of Partners in Property, a networking organisation that holds monthly full-day meet-ups across the country featuring expert speakers, presentations, Q&As and mastermind sessions. While there is a monthly membership fee, Sims promises there is absolutely no on-site hard sell.

“One of the reasons we set up Partners in Property is because we wanted to have that network organisation where you’re not being sold to. So, people literally come, we have the day - it’s usually a Friday at whichever location and we have the speakers, lunch and we do round tables in the afternoon. Everybody can go away thinking, oh, I’ve had a really good day, I’ve learned lots, but nobody has been jumping on me to say, ‘can I have your credit card details?’”

ALWAYS BE CLOSING?

From a red hot market where deals are rare diamonds to fears of a dip or worse - how can you make the best moves in any market? We talked to a host of experienced investors to find out

This year has certainly been a challenging one for property investors. Have you called up to view a property only to be told the vendor already has half a dozen offers? Have you had a down valuation that has scuppered your plans? Despite the mainstream media shouting that landlords are leaving the business in droves due to Section 24, it has certainly felt like properties have been, well, seriously hot property.

Whether or not you believe that, as interest rates rise, we are witnessing the early signs of cooling or even a drop, this past year has made one thing clear – for long-term property investors doing the same thing over and over again really is the definition of insanity.

So, as an investor does that mean you should shut up shop and stick it all in an index fund?

Well, the answer might well be yes if you are not ready to go the extra mile to secure that elusive deal when required. However, for those of you who have the mindset that they should always be buying, boom or bust, how do you go about it when it has felt like deals are as hard to come by as a table in a beer garden on a balmy bank holiday? And what happens if there is a crash and credit starts drying up?

ON THE HOUSE Magazine consults some seasoned investors with almost a century’s worth of experience between them - who have

benefitted from booms and bagged bargains during busts - to help you figure out how to always be closing great deals.

THE ROAD LESS TRAVELLED

One of the key themes the expert investors agree upon is that, in a challenging market, if you want unusual results you have to be ready to do the unusual. Now that can mean many different things (see our list of deal-finding options) but for Kevin Wright, property investment mentor and finance expert, it doesn’t necessarily mean eschewing Rightmove. It means keeping an eye out for problem properties and being the right person to solve those issues.

“You’re going to struggle to do deals

“

The perfect market does not exist for a property investor ”

SUZI CARTER

KEVIN WRIGHT

[following the herd]. So, the answer is to go down the road less travelled… Properties no one else wants to buy, which are properties with a problem.”

Of course, he advises that you must be equipped to solve that problem be it subsidence, damp, modernisation requirements or a myriad of other issues. Wright also says that looking for properties where you have the opportunity to increase the footprint through commercial conversions or permitted development rights is another example of approaches that might yield strong results.

There is one strategy that Wright counsels could prove challenging in this market –flipping.

“If you’re flipping, then when you buy and when you are able to put it back on the market to sell is pretty critical. So, you need to have a bit more of a crystal ball if you’re flipping. If you’re buying, holding and renting out, it doesn’t really matter.”

He advises building in at least a 10% sale price contingency if this is your chosen strategy and also ensuring you have more than one exit such as renting the property if it fails to achieve a higher sales price.

Still, Wright, like many successful investors, believes deals can be found in every market but rather than the mantra ‘always be buying’, he has a slightly different take.

“No, it should always be looking to offer,” he says, advising investors to put in many offers, expecting rejection, but continuing to follow up and build those relationships with agents.

Whatever the market conditions chartered surveyor and commercial property investment trainer, Suzi Carter, advises niching down. This could mean specific areas, strategies,

particular property types or tenant profiles.

With a background in property investing that includes both residential and commercial, she says niching down helps you find your competitive edge.

“You need to carve out your own niche. Invest in an area that is ticking current or future trends and that is in a location where there’s potential for future growth,” she explains. “Before I knew this stuff, I think I was in the market just waiting around with everybody else. And you never really become a master of something if you’re flitting between different strategies, different towns, whatever. If you really niche down and go an inch wide and a mile deep into something and really understand it, you can get a competitive advantage.”

Danny Inman started investing in property over 10 years ago when he was 23. Since then he has moved up the value chain from BTLs, through social housing and HMOs to largescale developments and investing in the Dubai property market.

Looking back, he says he has always tried to separate emotion from his property decisions and “the best thing that served me in property is just being uber logical”.

That evidence-based approach led him to look for ‘ahead of the curve’ opportunities, citing developing HMOs as an example when they were not commonplace. This is something investors can aim to emulate by studying prevailing market conditions and again, as Carter alluded to, looking for trends. While people struggle to find on-market deals that stack, one trend Inman expects is many more BTL deals coming to the market in the next few years.

“I think we’re going to go full cycle and back to buy to let, if I’m honest, I think that when the market changes and at some point, it will change, the opportunity will be back to whole of market.”

For those starting out Inman says: “You have to be very clear on the reasons that you are getting into it… I think too many people get into property just because they’ve heard it’s a good idea.

“They have a little bit of cash and they know property is a good idea over time. They know wealthy people who have property but they themselves don’t really have a strategy or an approach and don’t really understand the market that they’re getting into. I’ll buy property at the peak of the market, I mean, without trying to time the market, I’m still happily buying property today because mine is a 25-30 years perspective. If that’s my mindset - that property that I’m buying today, in two to three years, I won’t regret buying.”

“ I work daily on my mindset… For me, it’s about feeling the fear and doing it anyway ”

VALUE IS VALUE

As the old adage goes time is a great healer and this is especially true when it comes to property. “Value is value,” he muses. “So, you know there’s always going to be a demand to rent property, both residential and commercial. If you’ve got a solid rentable property then just stick with it. Time resolves most things. Property is an endlessly cyclical market… if you are in it for the long term, it’s about getting the knowledge to operate in both markets; a buyer’s market and seller’s market.”

He goes further to say that fixating on the purchase price is not necessarily the way to look at the market. “This is a very similar market to the early 2000s which was equally as buoyant and sellerfocused with an abundance of buyers and too few properties on the market… So to make money on that, you’ve got to be focusing on adding value, not purchase price.

”One thing Inman says you should really value as an investor is your professional reputation and track record - something that will see you find deals when others are struggling or even if lending dries up.

“Whenever people come to me and go, ‘I really want the 2008, 2009 market again so I can buy a load of property’. I always say to them well, you realise you’ve got a different challenge at that point in time, because yes, you can find the deals, but raising the money becomes more challenging,” he explains. “The perfect market does not exist for a property investor. I genuinely believe that when it’s easy to find deals, it’s hard to raise money. When it’s hard to raise money, it’s easy to find deals. And that’s just the way the market is. You have to continuously be working on all areas and building as many relationships as possible.”

MIND OVER MARKET MATTERS

Whether the market is booming or busting – there is always an abundance of noise. Noise from the mainstream media, noise from detractors and cheerleaders alike, gurus, pundits and fraudsters.

“Don’t listen to the noise, understand what’s happening in the market, understand the

sentiment,understand where the market is, but don’t necessarily follow the herd,” Carter advises. “I work daily on my mindset… For me, it’s kind of feeling the fear and doing it anyway. Meditation has helped me progress into areas that I never really would ever have expected and I think that’s the best training that I ever had. I meditate daily because I think that you’ve got to have some balls to have your own business and you’ve got to work on that mindset daily.”

An up market, down market or stagnant market, whatever the prevailing wind is in property, it is always important to skill up and it is not just trainers saying this.

Phil Comber is an investor with experience in serviced accommodation, buy to lets and garage rentals.

“I think anyone starting out now would be best spending a lot of time researching the areas they want to be in, listen to podcasts, go to some local property meetups,” he says. “Get on all the forums like the Buy To let Facebook Group, read books or listen to audiobooks.”

For Wright knowledge goes hand in hand with finding that edge and then safely following that strategy. “If you’re not sure, talk to people who are longer in the tooth in terms of investing and see what they did - anyone that’s been invested for 20 years would’ve had to buy property in the last rampant sellers’ market - ask what they did?”

DON’T OVERTHINK IT

So, to sum up, we’re in challenging times for investors. It is important that you find an edge or a niche to specialise in, work on your knowledge of the factors influencing the market and various strategies, build your network and team, and always be offering plus focus on your mindset.

Phew! It certainly sounds like a lot and you’ll definitely be a very well-rounded investor if you can do all of that. But sometimes you have to just pull the trigger.

“I have a very Doctor Pepper mindset around property investing; ‘what’s the worst that can happen?’,” says Inman.

“And realistically, a lot of the time, it’s not that bad. Most people that get into trouble in property do so because they bury their heads. They don’t have the conversations with the lender or the tenant, buyer, or seller, whatever it may be and the issue compounds. That becomes a real problem.”

INMAN

DANNY

PHIL COMBER

YOUR DEAL FINDING CHECK-LIST

Here is a by no means exhaustive list to get you thinking about different ways to nab your next property deal:

Rightmove and Zoopla – Email alerts

Direct to vendor letters and leaflets

‘We buy in cash’ – posters, hoardings and car decals

The Property Investor App

Probate letters

Letters to empty property owners via Land Registry searches

Look for tenant in situ properties

Check Rightmove, Zoopla, Gumtree, Spareroom, Open Rent, Facebook market place for tired rentals and call up

Check-in with agents daily including lettings agents asking if they have any landlords who are considering selling? Property or whole portfolio

Follow up on sold properties in case sale falls through

Work with compliant deal sourcers

Tell people what you do and incentivise people to bring deals inc tenants. You never know where a deal will come from.

Incentivise trades people to bring deals to

Follow up, follow up, follow up

THE GLOW

The developer, Moses Elliott

“I tell everyone what I do, we only buy off market, and source all our own deals. I was brought a deal from a window fitter, who introduced me to the brother of a guy in a nursing home, for whom he’d just replaced a broken window, in an empty house. The house had been empty for four years, and was in a bad way. It was an early 1920’s two-bed terraced house, and hadn’t been touched for 40 years.”

GLOW UP!

GLOW UP!

After months of grind, finally finishing a renovation can be the best feeling in the world – when it all comes together and even better when you realise the return on investment on the effort. Each issue ON THE HOUSE Magazine will celebrate the hard work of BTL Group members with a featured property ‘Glow Up’.

Don’t believe what they say - everyone loves a showoff! Do you have a recent renovation project you would like showcased in ON THE HOUSE Magazine? Email the editor, julian@onthehousemag.co.uk

OUT OF AFRICA

From Rands to ROI – the investor who leveraged his own experience to show others you can have a healthy long-distance relationship with property

Motivations for investing in property come in all shapes and sizes, from the desire to ditch the day job, secure a second pension or even just a love of all things bricks and mortar.

For Sean Thomson, the founder of WealthTrek and a seasoned investor with almost two decades’ experience in the UK market, the desire to lock in income in a strong currency was first and foremost. Thomson’s epiphany moment will be very familiar to a lot of readers.

“So, at the end of 2003 I picked up a book called ‘Rich Dad, Poor Dad’,” he recalls. “I was here in South Africa.” Not long after that Thomson emigrated to the UK and found

himself in a ‘dead-end job’ working in the accounts department for the Daily Mail Group. “That led me to a seminar in June of 2004, where I met a guy who has pretty much become my ‘Rich Dad’,” says Thomson, who now lives back in South Africa and runs WealthTrek which specialises in helping South Africans invest in the UK market.

“The pound versus the South African Rand are two very different beasts at the moment and have always beenso the ability to obviously leverage the pound and use it as a springboard to travel was the initial idea.”

But with his Rich Dad’s influence, he started looking at property as a way to be more deliberate about his future.

EMBRACING THE HUSTLE

With very little cash to his name though in his early days in the UK, Thomson had to hustle to get his first deal across the line – opting for lowcost housing in Burnley and working with a joint venture partner.

“The first property we bought for £26,000. We spent five grand on the refurb and fees and it revalued at £42,000. We used some creative finance techniques including angel investment, friends and family, credit cards, all that type of thing to just get started in property.”

Thomson also faced a challenge then that many are wrestling with today, where he was living and working in London and investing up North.

“I think leaning on and leveraging a good project manager was crucial for us in the early days and building a strong team,” he says.

“The hustle was real,” he laughs. “Two young guys living in London, we didn’t shy away from wanting to go out and chase girls at the weekends but we had to give a lot of that up to focus on property… There were Saturday mornings when our alarm clock went at 4am after a long week of work at the Daily Mail, Matt [JV partner] would pick me up and we’d have to drive five hours and spend the whole day in Burnley and then drive all the way back down again.”

He laughs that back in those days he was buying properties all cash as he was advised it was easier to remortgage a property you already owned, so in his own words, his RIO game needed a bit of polishing. Well, 17 years later he seems to have it down pat, having expanded to look at other areas including Liverpool, option deals in London and high-yielding properties in South Wales with strategies including social housing, flipping, commercial conversions and land development deals.

On the WealthTrek website, the following Chinese proverb is displayed prominently: “Those who say it can’t be done should not be interrupted by those who are actually doing it.” It’s a mindset Thomson lives by and lead to him setting up WealthTrek, a business he founded which helps everyday South Africans look to UK shores and get started in investing here. Thomson now splits his time between the UK and his homeland.

“It’s quite interesting because some people will find a way and other people will find an excuse. It’s generally down to mindset,” he says.

“Over the pandemic [we have helped in the purchase of] £7 million worth of property bought virtually, which I think is quite incredible because during the pandemic people in the UK were struggling to buy, let alone the thought of someone starting a UK portfolio from abroad, setting companies up, bank accounts, doing all of that and virtually getting your professional team

FIRED UP

There is an ironic truism among those pursuing financial freedom. In achieving financial independence they gain the space to discover what they are truly passionate about and find themselves generating even more value. For Thomson that was helping his fellow South Africans build a better future for themselves.

“The thing is, with people who end up going into property or starting businesses, they are entrepreneurial.”

At the time that Thomson set up WealthTrek, he says the model that has now been popularised as ‘BRR’, or buy, refurbish, refinance was not really the done thing.

“They [were] sold on new build property, which I’m sure you’ll agree with me, is not a way I’ve ever been taught to make money in property,” he explains. “So that was where the idea of WealthTrek came along, was to sort of getting people focused on the adding-value model, educating them on how to invest their money with that model in mind, and then introduce them to thirdparty service providers in the UK.”

WealthTrek specialises in education and introductions starting with a series of ‘UK Discovery’ seminars online. Putting his decade and a half’s experience in investing in the UK market to great use, Thomson will cover everything from how UK property works and obtaining mortgages as a non-domicile to various strategies, company set up and renovations.

He may have a tried and tested system but even so, since the pandemic lockdown eased, Thomson and WealthTrek’s clients have been facing the same challenge all property investors have – deal flow. “When the market was a bit less buoyant, larger sourcing agent outfits would find four to five property deals a month.

DEAL FOCUS

One deal that Sean is currently working on is a hotel conversion in Mumbles in South Wales.

THE NUMBERS:

Purchase price: £1,100,000

Devlopment Cost and fees: £603,000

GDV: Conservative estimate £2,350,000 (Agent estimate £2.8m)

Gross Profit: £647,000

Now it’s one or two property deals a month… In terms of your money left in [the deal], your return on investment and your cash flows, that potentially has got to be a bit more conservative.”

“The bottom line though is property is a long-term game.”

Still, you have to be proactive. Following the teachings of revered productivity guru Brian Tracy, Thomson gets granular when it comes to his goal-setting and reviewing. This perseverance has also seen him climb the property deal value chain in recent years.

“We’ve got two major projects on the go at the moment. One is a hotel purchase in Mumbles, South Wales, which works out as £1.1 million, spending just over £600,000 on the refurb, and that’ll be worth about £2.4 - £2.5 million, possibly more on the gross development value,” he says. “And the other is a land development deal where we took three years to get planning on an absolutely incredible site, knocking down the existing home, then building 12 luxury flats. So that’s going to keep me busy for certainly the next 12 to 18 months.

”Not bad for someone who arrived in the UK with no job and not much cash in his pocket.

FIND OUT MORE

Sean Thomson has written a book that shares the knowledge he has gained in helping other South Africans invest in the UK. It can be downloaded from his website wealthtrek.co.za where you can also see other deal examples. Sean can also be found as @sksthomsonproperty on Instagram.

MAKING MOVES

WealthTrek students Justyn, Alison, Barry and Darryl collaborated on the purchase and renovation of a 2-bed flat in Aberdeen, Scotland to get a foot on the UK investment ladder.

THE NUMBERS:

Purchase price: £52,000

Refurb and Fees: £22,800

Own cash in: £35,800 (75% LTV)

ARV:£90,000

Net cashflow: £206 ROI: 33% (after refinance)

THEY WILL ROCK YOU!

If you want to make the dream work, build a rockstar team writes Paul Weller, (pictured) managing director at Buy to Let Group preferred partner and accountancy tax specialists Astonia Associates

Property investing and developing can sometimes feel like a lonely and isolated activity where you constantly question yourself as to whether you are making the right investment decisions. The numbers all stack up but doubt creeps in when you have to finally press the button and commit to buying. This is why it is so important to have the correct professional team to help clarify your position and mitigate any potential risks.

Building a team featuring an experienced property tax advisor, mortgage broker and lawyer is a must to help you feel confident in your investing strategy. Questions like; ‘Should I buy personally or through a company?’

‘How much can I borrow?’ ‘How long does the conveyancing process take?’ should always be researched in advance and mulled over with your team so that investment decisions can be made with conviction – we all need to sleep at night!

LTD OPTIONS

Tax laws for the property sector have changed considerably over the last few years and will continue to change into the future so careful planning on projects and investments are key.

Experienced property investors consider exit strategies hand in hand with tax planning. Are you looking to leave a legacy for children and grandchildren? Or is cash flow for funding lifestyles the key?

Whatever your exit, careful tax planning now can save you a vast amount of tax in the future. The structure of your business also needs to be decided at the beginning of your business journey as an effective structure can save huge amounts of tax.

The personal tax situation is different for every single investor and family as is each investment project, so professional advice is always recommended to ensure you are in the best tax position possible. If a limited company route is the way forward then it may be that a group structure is suitable if you are running different property strategies or completely separate non-property-related businesses too. If you are flipping properties – purchasing, renovating and then selling – you may have to register for the Construction Industry Scheme (CIS) as a developer and operate the scheme on a monthly basis with contractors/builders that you work with, this is an area that is widely overlooked but needs to be followed to avoid HMRC penalties.

Generally, BTL and HMO properties, and the rental income generated from them, are exempt from VAT. If there is a commercial element to your investment, whether full or partial, then VAT is an important area that needs to be considered from the outset before any purchase takes place. VAT is a very complicated area and the VAT position for now and in the future needs to be fully understood from the start.

£76K IN SAVINGS!

So, I bet you are thinking; ‘Consult an expert, well, you would say that, you’re a property tax specialist’. Fair enough, but let me give you an example of the potential pitfalls. We recently engaged with a new client who had created several limited companies and had started buying and converting properties, with no advice from their previous accountants. We managed to restructure the business into a group structure at the very last minute, saving the client £76,000 in stamp duty land tax. If this doesn’t emphasise the point of pre-planning, I don’t know what does!

Property investment and property development can be one of the most financially rewarding and satisfying businesses to run and can provide the freedom to be your own boss and escape from the PAYE environment.

Careful planning for each project is the key to making your business a success and having an experienced and dedicated support team around you will ensure that your risks are kept to a minimum.

PARTNERS AND SERVICES

BOOKS

Rich Dad, Poor Dad – Robert Kiyosaki

The book that so many people chart as their epiphany moment and that started them down the path to property investing.

Richest Man in Babylon - George S. Clayson

What financial advice could you possibly glean from a civilisation 4,000 years ago?

Turns out a heck of a lot as the parables of Arkad reveal universal wealth-building truths along the way.

Think and Grow Rich – Napoleon Hill

The all-time best seller that through extensive research on wealthy folk aims to coach you to think like them.

The Complete Guide to Property Investing – Angela Bryant A solid overview of the property investment game although readers should look to supplement with current information.

Property Magic – Simon Zutshi

Now in its 6th edition Zutchi’s book takes readers through many different strategies that if applied correctly will help accelerate your investing journey.

House Arrest – Rick Gannon

The subhead ‘A Practical Guide on How to Replace Your Income Through Property Investing’ say it all, with the addition of noting a focus on HMOs. So, if you are considering entering the competitive world of HMOs give this a read.

Never Split the Difference – Chris Voss Sharpen up your negotiation skills with an ex-FBI hostage negotiator in your corner.

How to Win Friends and Influence People – Dale Carnegie

A time-honoured tome that will boost everything from you vendor interactions to your offer writing skills.

PODCASTS

Inside Property Investing – HMO Focused investing experience advice from Mike and Victoria Stenhouse, somehow unpretentiously dispensed from their yacht in sunnier climes.

The Property Podcast – The Robs have been dispensing free property wisdom for almost a decade. Impartial and in-depth advice garnered through years of experience and research.

NETWORKING

Partners

Wealth Builders – A rounded approach to all things money-making, keeping and financial fortress-building from Kevin Wheelan and Christian Rodwell.

The Side Hustle Show – Inspiration for all those who are looking to make a little extra deposit dough on the side. American but features plenty of universal tips, ideas and concepts that can be within and without of a property business.

INSURANCE SERVICES

BTL GROUP PREFERRED PARTNER: Falcon Insurance

The Property Jam – A light-hearted and quirky panel show around all things landlording that also reveals plenty of useful and actionable info along the way.

Naked Money – The Naked Trader takes us through stock market fundamentals and his own hard-won rules of investing which feature in his award-winning book.

YOUTUBE CHANNELS

Jamie York – No-nonsense, plain-speaking advice from an investor who favours in his own words, plain and boring, bog standard buy to lets.

Rentals to Wealth – Infectiously positive pairing who sprung off a Bigger Pockets featurette and take you behind the scenes of their house-hacking and renovation efforts. US-centric but great for motivation.

New2Property – Perma-paint-splashed hands-on investor Dan Coachafer gets into the sort of seriously granular detail that is perfect for true property fans and also for educating yourself on pitfalls as you go about portfolio building.

Ali Abdaal – Ali covers everything from selfdevelopment to business and investment in a millennial friendly-fashion. For those who adopt an always-be-learning perspective check out Ali’s best hits.

BLOGS

MrMoneyMustache – Pete Adney writing in his alter-ego as Mr Money Mustache. The FIRE movement and extreme frugality might not be for everyone but Pete’s logic, contrarian perspective and entertaining style of writing are a boon for anyone interested in personal finance. Pinch of salt required for US-centric advice.

The Motley Fool – Long-running investment and market commentator website that focuses on stocks and shares investing and believes ‘individuals can beat the market’ with a long-term overview and a hands-on financial management approach.

THE RANT

Training – the path to mounting credit card debt or financial freedom? Buy To Let Group founder and long-term investor Wes De Leur has some final words of wisdom for newcomers.

You constantly hear lots of people talking about the property training industry – both extremely negative and glowingly positive. I wanted to offer up my two-penneth to hopefully help new investors decide.

There are certainly some great trainers out there however, there are also plenty of scam artists. That’s why one of your first and most fundamental skills as an investor might be an ability to sieve out the charlatans. Just as for an investment, carrying out due diligence is vital to decide if a trainer is compatible and will guide you in the right direction. It’s really is a case of pup property investor beware - some have seen ‘training’ as a way to make quick bucks by selling desperate individuals the dream of an easy life. Property isn’t easy. Let me say that again because it bears repeating.

PROPERTY IS NOT EASY.

It is not passive and is not a get rich quick scheme. Property is a get rich slow scheme.

PLASTIC IS NOT FANTASTIC!

For those new to property, training programmes to avoid are those hard-selling types. These are the sort where after a few days of aspirational waffle they will get you running to the back of the room with your credit card in hand to book a one-time only spot that costs some ridiculously slashed price and will always, always end in a seven! (BTW If you want to enjoy these ‘contrapreneurs’ being exposed –check out Mike Winnet’s videos on YouTube).

If you are going to attend any introductory training courses, go for it! But leave the credit card at home. Most of these seminars will use NLP techniques to convince you that their course is the yellow brick road to riches. I am going to open up on a little secret. Early on in our property investing journey my wife and I attended a course because there was no other avenue when searching for property knowledge or education. I wish The BTL group was around back then! It was either go it alone or find the best training available. We were new to the UK and needed a fast track option to knowledge in order to start building our portfolio. Notice how it was a fast track option to gain the knowledge and not a fast track to building a portfolio.

If you find yourself in a similar situation today, I would suggest searching the internet for free information – there’s stacks available but definitely verify and consider the source. Do not expect to know how to fully execute it all on your own as many strategies will require experience to put into action. This will come over time though.

TO TRAIN OR NOT TO TRAIN?

If you are someone who needs to be guided in order to take those first big steps then training might be for you, provided you have the spare cash – certainly not your deposit funds! But before you rush off and pay eye-watering amounts of your hard earned, please make sure you’ll be getting value for money and you’re not just succumbing to the hard-sell squeeze. However, for those of you who are happy to trawl the reams of property investment info and have lots of free time, then becoming successful in property absolutely can be achieved this way too.

Neither way is right nor wrong, it definitely depends on what type of person you are and exactly what resources you have available in order to get the results you want. Importantly, both share the common theme that you are going to have to roll up your sleeves and get working. The only path to success is taking action, no one is going to do it for you.