ON THE HOUSE Magazine - Issue 6

ONTHECOVER

CONTENTS

APRIL 2023

ON THE HOUSE MAGAZINE

5

6

10

12

27

21

FAMILY FORTUNES

OTH Mag looks at how family property planning can seriously amplify your returns with two amazing success stories

EDITOR’S LETTER

A welcome from our editor and all the links that matter

IN CASE YOU MISSED

The important, news, developments and regulations from the last month in property in the UK

GROUP GOINGS ON

A curated smorgasboard of the posts, pithy replies and helpful responses from a month on the Buy To Let Property Facebook Group

ONE TO WATCH

Meet a duo of Safa’s who made the UK home but had to work very hard to get their property dream off the ground after dodgy agents, builders and more

COLUMN: TAX

36

ON TOP OF THE STACK

Beginner’s Corner part 3 – How to make sure you get your sums right when stacking your first investment deal

16

NORTH OF THE BORDER

It’s been a cold, hard winter for landlords in Scotland. How are landlords holding out?

SUCCESS STORY

If property is a family business for you, our tax expert helps you consider how that business is best set up

29 STRATEGY FOCUS

If you are about to convert your first HMO this is a feature you cannot miss as Alex Daley gets into the weeds when it comes to architecture and planning

33 CASE STUDY - RENO TO RENT

40

43

44

A two-bed first time investment was all about the numbers for this accountant until he had to roll up his sleeves and make some serious savings

COLUMN: MORTGAGES

Preferred partners Ramsay and White’s MD Joel White has seen it all when it comes to property finance so gives us his seven deadly sins for first time invetsors

COLUMN: MANAGEMENT

Julian Pletts offers up his best tips to keep tenants sweet and build good relationships that ultimately increase the chance to the rent being paid on time

THE GLOW UP – SWISH SEVEN-BED HMO

We give a little extra column space to our Ones to Watch this month because boy is this HMO conversion pretty!

46 THE LIST

Our unapologetically subjective list of wonderfully useful resources

49 THE RANT

USEFUL LINKS

Wes dons his drill sergeant uniform to scream at young property recruits about the importance of doing military grade due diligence. Sir, Yes Sir!

JULIAN@ONTHEHOUSEMAG.CO.UK

BUY TO LET PROPERTY GROUP

On The House magazine has 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 website 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 is an ICO registered company.

Editor’s Letter Playing the generational gain

Every property investor that I have had the good fortune to meet has an outlook of building a better future, not just for themselves, but for their family and often the wider community.

So often the money that property can generate is either not the driving force or it has become less of a priority as their business has scaled.

Now, with so many landlords who got into the game in the nineties and early noughties looking to exit and either retire or invest elsewhere, I think there is a great opportunity for the next generation to look at building portfolios of their own and filling some of the void.

Obviously, it would help if they are able to ignore the noise and be adaptable to the challenges of the latest and inevitable government curve ball. As investors, many of us with children, perhaps it is our responsibility to equip the next generation of property investors with the tools needed.

I also believe it is incredibly powerful if families can pull together and establish long-term property businesses, testing and developing strategies and ultimately benefiting from multigenerational compound growth.

Now, I am not necessarily talking about children directly working in the day-today of the business, as modern parenting favours supporting the choices your children make as they plot their path through life. However, it incredibly beneficial to be educated by emersion in the mindset and philosophy that comes with being a successful property investor. The traits of being a self-starter, a commitment to consistent learning and improvement and a realistic but optimistic outlook will serve them well in whatever field they choose.

This is certainly something I’m looking to establish within my own family and I know Wes, the founder of the Buy to Let Property Group, is keen to promote with his brood.

It is with all this in mind that we talked to and took so much inspiration from Kathlyn Southall and her three daughters, who together are a pretty unstoppable force in property, as well as another family duo, The Baileys, who are using their investments to make a small but definite impact on the nation’s housing crisis.

I hope you enjoy this sixth outing of ON THE HOUSE Magazine which also includes how to stack deals in our Beginner’s Corner (p36), Alex Daley getting down and dirty with HMO development (p29), a look at how Scottish landlords are baring up under the pressure of draconian regulations (p16) plus case studies, interviews, news and much more.

Happy multi-generational investing!

With many thanks to our Issue 5 Sponsor

SUBSCRIBE: ON THE HOUSE Weekly Newsletter including a monthly mortgage update from Ramsay & White

JOIN: The Roundtable Mastermind Group – a selective and supportive group of investors run by Wes De Leur.

SAY THANKS: We admin the busy BTL Group and put out stacks of useful content for free –Why not shout us a coffee to say cheers?!

Julian PlettsEDITOR

IN CASE YOU MISSED

THE NEED -TO - KNOW INFO

REGULATORY ROUND-UP

There is so much compliance in being a landlord nowadays, so here is our regulatory round-up - the latest main developments that you need to be aware of along with the bestknown timetables of other proposed changes and regulations.

(The below is intended as a guide to help you stay on track, as always consult with experts such as accountants and financial advisors before

HOLIDAY LET BUSINESS RATES

From April 1st, new eligibility rules for business rates have applied to self-catering properties in England and Wales have come into force. If your property does not match the new criteria you will be eligible for paying Council Tax though depending on the rateable value there may well be a benefit for holiday let owners who qualify for small business rates relief.

DEADLINE FOR SCOTTISH SHORT-TERM LET LICENSES

Existing landlords of properties in Scotland should now have applied for short-term let licences. From October 2022 it has been mandatory for all new landlords renting out properties on a short-term basis in Scotland to apply for the licenses. The deadline was April 1st.

EVICTION BAN EXTENDED, NEW RENT CAP – SCOTLAND

The Emergency legislation brought forward in Scotland under the Cost of Living (Tenant Protection) Bill 2022 to freeze rents and eviction ban until March 21st, 2023 was passed on October 6th and became an act on October 27th. The protections for tenants have now been extended meaning, as of April 1st 2023, rent rises have been capped in the PRS sector to 3%. Read more on p16

MAKING TAX DIGITAL

Previously coming into effect in April 2024 has now been punted back down the road for landlords until 2026. Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) previously would have required landlords earning more than £10,000 to use MTD-compatible software to keep records and make four quarterly submissions and a final one to HMRC a year.

RENT TO RENT RULING

A landmark Supreme Ruling at the start of March has set a legal precedent that should effectively ensure rent-to-rent operators, as opposed to property owners, are responsible for ensuring rental regulation compliance.

WELSH RENTAL OVERHAUL NOW IN EFFECT

The Renting Homes (Wales) Act 2016 came into effect on December 1st. The grace period for compliance with the new rules comes to an end on May 31st.

SOCIAL HOUSING BILL IN FINAL STAGES

The Social Housing (Regulation Bill) is now in the final stages awaiting a date for consideration of amendments prior to Royal Assent. The law will require social housing managers to gain professional qualifications and allow the reglator more powers to to enter properties with only 48 hours’ notice and make emergency repairs with landlords footing the bill.

NEEDTOKNOWSCALE

RENTAL REFORM BILL – ‘COMMONS IN TWO MONTHS’

Housing minister Michael Gove has said that the Renter’s Reform Bill, which is set to abolish Section 21 evictions, is going to be introduced to Parliament within two months. Read more on p6.

EPC CHANGES

According to reports, landords will now have until 2028, as opposed to 2025, to upgrade their properties to EPC for all tenancies.

HOLIDAY LET REGULATIONS

Gove also stated in a Commons debate at the end of March that the government will be “bringing forward some planning changes to the Levelling-up and Regeneration Bill which are intended to ensure that we have restrictions on the way in which dwelling homes can be turned into Airbnbs”. Unlike the Renter’s Reform Bill which has yet to enter the Commons, the Levelling-up and Regeneration Bill is currently on the committee stage in the House of Lords.

BRR is the KEY philosophy to be mastered to make any strategy work on a long-term basis. The challenges that most property investors face are:

Kevin Wright is a gifted and brilliant teacher, so the training is really enjoyable. It is obvious that he puts a lot of time, consideration and effort into every detail.

Monica Sharma - Previous BRR Summit Delegate

Being able to close deals others can’t

Focusing on what’s possible, rather than worrying about what isn’t

Making enough profit, fast enough to build a lucrative business that rewards your efforts

These are all solvable - and learning the BRR Philosophy and how to apply it in practice will give you the edge over other investors. Book in and learn how.

NOTE: If you want to find any of these posts – Head to the group and just search the person’s name and a list should come up with their posts

We don’t shy away from the true reality of being a landlord and property investor on the Buy To Let Group – we have nothing to hire to sell. So here is a cautionary tale for those looking to get into property, you will get bad tenants, sometimes god awful. It is part of the process. Dries, we sympathise – this tenant deserves to have to book thrown at them.

Just when you thought you have heard everything in the weird and wacky world of being a landlord – a tenant goes and takes their excuses to another realm! Who you gonna call? Well, your landlord apparently. Don’t think Rob’s buying it though!

You shouldn’t have to – right?

What a horrendous situation you went through there Richard! Great that the police finally sorted it and that sense prevailed.

The Buy to Let Property group is one of the busiest, most vibrant and supportive places for property investors 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 couple of months.

Group founder Wes shares reports that the proposed EPC rental rating requirements changes have been moved back to 2028 for all tenancies.

I mean it is a nice example of a refurbished property Mustafa, though as Peter Adley commented it might be difficult to gauge whether this reflects the market fluctuations as an investor (Is it you?) has clearly added some value here. It certainly is true that the market has seen nowhere near the nose dive experts were predicting at the start of the year. This post certainly sparked a London investment debate – worth checking out.

Wes keeping it real as he lays bare the tougher side of being a landlord. Congrats on the successful eviction ruling. Back to business as usual hopefully.

Well, that’s excellent news. Glad the group was such a help! Keep sharing and keep caring folks. We’re all help making good property investors even better.

There is no getting away from the fact that you have work harder to find deals that stack in a higher inflationary environment but we certainly respect the comment from Andy Brooker who steers younger investors towards considering property as a long-term gain. Yes, cashflow is important and deals need to make money but it is long term appreciation where you really make money in property. If cashflow is your main driver, you might need to reconsider your strategy.

Yep. We’re all paying the rate dance at the moment?

Fun and games with agents!

ONES TO WATCH: SUSAN AND RICHARD PUCHNER

Dodgy agents, bodge-it builders, deals that don’t stack, being new to the country, Covid and downturns. Susan and Richard could have easily jacked it in long ago. They didn’t. And now they are building the life of their dreams for them and their kids.

OTH: Thanks very much for taking the time to talk to ON THE HOUSE Magazine. We’ve been awe of the pictures of your finished HMO rentals but when did you first become interested in property?

Richard: We moved over [from South Africa] at the end of 2015 and I managed to secure a job here in the UK, transferred my skills, I’m an engineering geologist. Susan was going to be a full-time mum because we had a two-year-old. We moved over with a two-year-old and Susan was pregnant at the time with our second child. So, we didn’t make things easy for ourselves.

OTH: Were you investing in property back in South Africa?

Richard: Not really, no. South Africa was a different market at the time. There were property investors, but for us it never seemed like an option. It seemed too risky, a completely different tenant profile and demographic.

We’d never really got into property investing, but we did realize the benefit of adding value to property. So, the first property I bought was a townhouse in South Africa which doubled in value over four years. You know, that was fantastic. So, I thought I’ll do this again with a larger house but when I brought my second property, it was the peak of the property cycle in 2008 and it just flatlined. I didn’t realize any

loss because I didn’t sell it, but I just had to hang onto it for the next seven years and nothing happened.

Susan: Once we moved over to the UK, I think like most people [who are interested in property] we went to one of those two-day events. Richard went because I was obviously looking after the babies and he came back and he was super excited.

Richard: And we talked about it and we thought, you know, as much as we want to work and we loved our jobs, we just really wanted to do something on our own. I’ve always had this dream of, you know, being an entrepreneur and working for myself and then knowing what we have been able to do with property with our own home and then we realised we could actually make this into a proper family business.

OTH: How did you make sure the training was correct for you?

Richard: There’s some trainers where you look at that person and you just instantly don’t like the look of their face and you think, you know, they’re up to stuff. And you know you look at somebody else, you’re like, I kind of like that guy. I think he knows what he’s talking about. But you know, you have to ask, is he a professional bullshitter? You know, you don’t really know. But we saw this a free seminar and we thought we’ve got nothing to lose. It looked and felt genuine. Yes, the proposed model of passive income, like an ATM spitting out money while you sleep type of thing gets you all excited. The reality is somewhat different. But it just presented this business model that we’d never realised was possible before. And that was to purchase a property at a low value, add value to it, refinance, pull your money out, buy another one. Whereas everybody, you speak to like friends and family, it’s save up a deposit and then if you’re lucky, you buy a property and then you’ve got to save up 10 years for the next deposit.

Susan: We learned so much. It was really eye-opening - we didn’t

understand that we could buy a house with other people’s money. I mean, this was amazing.

OTH: So where did it go from there?

Susan: We were battling to make the numbers work for buy to lets. We probably viewed up to 100 properties, put in maybe 80 offers, none accepted. So, your motivation then starts wearing thin.

Richard: I think that’s where a lot of people that do these trainings, I mean, thousands of people probably do these trainings and of the big group that we were involved in, we only know a handful that had actually gone through with it. I think a lot of people do get disheartened and fall by the wayside. We were 100% committed to this, you know, we’d made this move to the UK we had to make it work. There was no other option.

OTH: So how did it go after that?

Richard: So, we were in Milton Keynes… but we kind of [narrowed] it down to Nottingham and that was our first focus. It’s an hour and a half drive up to Nottingham. I was happy to do that. I don’t mind driving. So, during the week Susan would do the Rightmove hunting, phoning up the agents book the viewings for the Saturday. I’d go on the Saturday, do the viewings, do the numbers on the Sunday, put the offer in on the Monday every week for months on end viewing 70+ properties. Then eventually we got our first flip in Nottingham. But all the while we were looking for buy to lets and those numbers weren’t quite working.

Richard: So, we had to sort of branch out and see what other opportunities are there. And that’s when we decided we’d look at HMOs and HMO training as well… and realised Nottingham is article four. We then turned our attention to Derby, which is the same distance. Now we solely focused on Derby, and that’s where all our HMOs are.

OTH: So, the numbers looked better on HMOs did that mean you were able to put in more competitive offers?

Richard: Exactly. Yeah. It’s a completely different model to buy to let. There’s a lot more fat on the bone in it in terms of what you can offer. Yes. The build costs are more, but the refinance at the end that makes the difference in terms of uplifting the value that you can do. You can add so much more value in creating an HMO than you could with a buy to let so it’s a bit more forgiving on the numbers. Of course, you have got to make sure your numbers are correct, because you could be in for a bigger downfall if you get it wrong.

Susan: So, we’ve done the theory, but in practice it requires a lot of assistance. We had the theory but wow we needed the sort of mastermind group learning from other people, which made a big difference. We joined a group of investors doing a lot of HMO in Derby projects. So, we were now immersed in this group that have been there, done that, we could ask questions every week. We had a coach to help us with the mental blocks that you have where you’re like, ‘Wow, this isn’t working. What’s the point of carrying on?’ You know and kind of working through that process and making sure you’re clear on your goals and your milestones.

OTH: So, give me an idea of your current portfolio. And you talked about mistakes, let’s call them lessons along the way?

Richard: Well, the first one that comes to mind is you always just assume that everyone is as nice and as kind as you hope they would be. Property is a people business and having to deal with people in general, you think everyone should be on the same page. But everyone is obviously there to look after themselves. Our first property we got was through a very dodgy agent who literally wanted an extra £1,000 to secure the deal.

And he was playing us off against somebody else, another buyer who as it happened was someone in our mastermind group… It all came to light and we actually spoke to that person. We said, sorry, we didn’t actually realise who we were up against, but did you realize this guy was actually trying to get blackmail money out of us and said, no. But she actually did pay the guy.

OTH: Oh, but you guys got the deal?

Susan: In the end. We did because the vendor learnt about all of this. She was extremely upset about what was going on and fired the agent and said, well, she’d rather sell direct to us. So, the lesson there was try and get to the vendor if you can.

Richard: We’re currently busy with our sixth project – all have been HMOs… The project that we are busy with at the moment is a 12 bedroom. That one’s all studios. And so, with a commercial valuation based on the expected rental income, yeah, we should get a valuation of £1.1 million. So, that’ll then take us to about £2.7 million gross development value (GDV).

OTH: So, are they self-contained studio flats within the property? I wouldn’t call them flats, they are maisonette type things, what’s the word? They like to call it bedsits. Well, this is how you should talk to the council because as soon as you start talking flats and studios, they want to start edging towards single banding. But for the purposes of marketing to tenants we call them studios because it’s got the kitchenette, an ensuite and it gives them a bit more privacy. We found that those are in high demand.

OTH: Looking back from your first renovation to now, any other key learning points about the process?

Richard: I think that, a big part is the builders, working with and getting the right builder and the right price. The key lesson there was making sure that our scope of work is clear from the beginning. I mean, for a lot of people starting out you don’t know what you need to allow for in an HMO. We’ve seen a lot of investors, they’ve got a six-bedroom HMO and they’ll just ask the builder, ‘What do you think it’s going cost?’ And the builder’s going to go, ‘Well, I don’t know what your spec is. I don’t know what you’re expecting, but you know what - it’ll cost £80,000’. ‘Great, let’s do it’. And then when they start building, they’re like, ‘Well, I was expecting that’. And the builders were like, ‘Well, you didn’t tell me that, that’s going to be an extra £10k’. And so on and there’s scope creep. It’s going to be a massive difference. Richard: we’ve been through about four different builders over our five different projects… We’ve had some that started out well and, then towards the end, you could see they were sort of taking us for a ride in terms of what they were claiming.

Then you get another builder who from the get-go was completely rude and obnoxious and I’m like, we’ve got to work together for the next three months and it really became sour towards the end. Another builder was really great, talkative and friendly now, but then too talkative, didn’t really focus on his work and in fact cocked up probably three or four other investor’s projects together with ours. And just basically did a runner on all the projects. So, we were left high and dry. He just disappeared and he took our money basically £30,000, you know, we had paid him and he disappeared. Susan: Not only that he took so long that it’s actually eaten into the

profits that we would’ve actually made had we finished the project on time.

Richard: So, we are now on our fourth builder.

OTH: Oh no, well moving on then… you were sure that you had clear high-end HMO product in mind…

Susan: I lived in an HMO in London and it was horrible. I had these terrible memories of me standing on a bed too scared to like step out onto the floor because there were rats in the corner. Literally, so I phoned the landlord and he’s like, yes, I’ll get there. But it took a couple of days before he even came in and I literally taped the kitchen door with masking tape and just was so scared to even sleep. And those days haunt me. So for me our HMOs, we want them to be of the highest level that no one ever has to feel that way ever. We are targeting aspirational tenants who want to stay in a place where it’s beautiful, homely and comfortable. We want to entice them to stay for as long as possible until, you know, one day

OTH: Have there been any dark times during your portfolio building?

So, going right back to the beginning… [there was a] dry spell of trying to find the next HMO deal, and I was completely focusing on that. It’s taken me away from family, you know, Susan’s with two young kids. I’m up to Derby every weekend and then I’m busy with the numbers in the evening. That was tough on us as a family unit. And the girls were like, ‘Daddy, are you working again?’ And that’s sort of heart-breaking.’

Susan: Well, one time for me is when the deal is snatched away. I mean, it was devastating. They always say don’t get emotional in property, which I think is really difficult, especially being a female. I’m highly emotional so I really get attached to these deals and I’m learning, trying to step away from that.

OTH: What have been the best moments though when it has all felt like it is worth it?

Richard: I think for me there have been a lot, but when we got our first HMO offer accepted, the big one. I mean, that’s when we felt like rock stars were like, ‘Yes! We’ve got this in the bag! Plain sailing from here.’ Which it wasn’t really.

Then I think the next eureka moment is when you’ve completed the full design, the build and you get that valuation at the end you’ve got to reward yourself or acknowledge that what you’ve done is a massive task!

Susan: When we do the final staging, that’s my favourite part. And just to see it all coming together that’s really awesome. Plus, when you hear the feedback from our tenants who want to stay in our HMOs and request them [with agents]. That’s quite rewarding. We want happy tenants at the end of the day. Then obviously when the rent does come in, that’s also amazing too!

For a closer look inside on Susan and Richard’s HMOs check out the property ‘Glow Up’ on p44.

KEEP THE HEID!

One of the memorable lines in the film ‘Braveheart’ is “the trouble with Scotland is that it’s full of Scots” – no offence to our Scottish friends. Now if King Edward was alive in 2023, he might have more issues with just how hard it seems to be a landlord in Scotland, than the fact there is no love lost between the people either side of Hadrian’s Wall.

Let’s start by looking at what’s currently happening as a result of the Cost of Living (Tenant Protection) (Scotland) Act 2022 which included a rent freeze and restriction on evictions.

Propertymark (an organisation for estate agents) reports that a whopping 85% of their agents had landlords who had expressed interest in leaving the private rental sector and selling up.

But that’s just expressing interest, no biggie.

They also report that 68% of agents have already seen a spike in how many have had notices to sell.

Timothy Douglas, Head of Policy and Campaigns at Propertymark, said: “The measures introduced… are disproportionate to the scale of the problem and have only driven more landlords out of the sector. Feedback from Propertymark members shows that because of the measures introduced by the Scottish Government, the desire for landlords to remain in the sector and increase the number of homes for people to rent is stalling.”

Although data so far, seems not to be showing that a mass sell-up has occurred.

“Early data does not show any drop in private rental properties, despite the Scottish Government’s rent freeze. Minister for Tenants’

Rights Patrick Harvie said administrative figures showed a small increase in private rented accommodation,” Insider explained, although making a large point of the fact that this was very early stage data and perhaps not a good reflection of what was truly happening. Only time will tell on that front.

If the data was accurate, it would go hand in hand with what Buy To Let Group member and Scottish buy to let flat investor Laura told us: “My current strategy is the same as its been for the last 10-plus years. Challenges come up and change over time but for me renting out my property works. When/if it doesn’t anymore I’ll sell and look at something else.”

In December 2017, the Scottish government abolished the equivalent of England’s Section 21, often referred to as no-fault evictions. They did though, change up the process for evicting when there was a fault, notice to leave can be issued at an earlier stage and there are 18 mandatory and discretionary grounds for repossession under the system. So, it’s important to make clear, this hasn’t removed the landlord’s ability to evict in many circumstances. Essentially, each tenancy agreement is open-ended, landlords can’t

It has been a seriously tough time to be a Scottish landlord of late. With legislators in Westminster no doubt keeping a watchful eye to see how the market across the Border has fared under tougher rules and a rent freeze. Writer Alex Daley takes a look at the current situation and talk to landlords to see if they’re ‘pure done in’ or ‘it’s nae bother’.

just end them at the end of the fixed term (say 12 months) and find a tenant who is willing to pay more.

Stephen McInnes, a landlord with a portfolio of unencumbered properties in Scotland says that when it comes to evictions it can be an extremely difficult prospect for Scottish property owners and contests that landlords are exiting the market at a higher rate.

“Section 21 is now redundant due to the moratorium in Scotland which protects tenants to the hills. You have to get a tier 1 tribunal to do anything now and it’s takes months to get them out. So, many landlords are selling in Scotland which is going to push rents up and put extreme pressure on councils. The Scottish National Party think they are clever but will soon reap what they have sewn,” McInnes says.

When it comes to the SNP many property commentators believe that the appointment of Humza Yousaf as the new leader replacing Nicola Sturgeon will not signal a softening of policy towards landlords, as he has previously supported more stringent regulation.

We asked Head of New Business for Glenham Property (an Edinburgh-based investment and property management company), Charlie Inness how he has been managing the new hurdles with his portfolio.

“My portfolio is BTLs, mainly flats as I tend to invest in cities. I’ve not had to evict anyone personally (under his portfolio) but we, as a business, have served notice on plenty of tenants and in most cases have no encountered a problem.”

On wider strategy, he commented: “I keep to low gearing levels, I like to stick to around 60% LTV and I always stress test at higher interest rates” which has kept him insulated against some of the troubles landlords are facing.

During the Covid-19 years, the Scottish parliament amended the private housing act 2016 with “(1A) The landlord under a private residential tenancy may not increase the rent payable under the tenancy for a period starting on the day the Coronavirus (Scotland) (No.2) Act 2020 comes into force and ending two years after that day.”

This meant there was a two-year rent freeze, which, during a time, especially in the last year of the freeze, where rents were going up, up and away, meant a lot of landlords were left with a bad taste in their mouths.

OUT OF THE FREEZER, INTO THE FRIDGE

Relief arrived though and the rent situation should only get better from now. Well, a little better. Rental amounts were taken out of the freezer and put in the fridge. From April 1st, landlords have been able to increase rent once annually (as in England), with three months’ notice. But… And this is a big but, that’s limited to 3% per year.

In fairness, if we look at our article in issue three of OTH Magazine about raising rents, isn’t a million miles off what many landlords do. Joe Trembath from Woodland Properties said: “As a company we raise rents across the portfolio at 5% a year to absorb raising costs faced on the company from licensing, increased maintenance and so on we have done this for 20 years never once had an issue, as our rents are still below average for area by around 10%”

Interestingly, in commentary from

Scottish letting and estate agents, there was some feeling this rent fridge (we’re calling it that now) was backfiring when it comes to some landlords. One of the agents said, “Many landlords who have not increased rent and had properties below market value for years are now considering this position and feeling they must raise to market rent from now on and keep up with annual increases, whereby before they had not considered it.”

Inness added: “I’m raising my rent on existing tenancies by the 3% but I have done OK in terms of rents as the majority of my properties are close to current market rent. This may change a little over time if some of my existing tenants decide to remain, but I can deal with it.”

Fundamentally, there seems to be a huge undersupply of rental accommodation in Scotland across all sectors.

This is acutely felt in the student rental sector due to government interventions also backfiring. Glasgow university which has around 38,000 students has even asked some students to ‘pause studies’ due to lack of housing. Citing ‘significant contraction in the private rental market’ as the leading factor. Not at all surprising then that the National Union of Students (NUS) in Scotland has said the situation is ‘deeply concerning’ and this has been widely described as a ‘housing emergency’.

The reality is being a landlord to students in Scotland is both unappealing and deeply unpractical. With the government getting rid of a landlord’s ability to use fixed terms to end tenancy agreements, it throws the entire student business model into chaos. Where in England a landlord would agree July- end of June terms with a group of tenants, and when November rolls around, they’d agree with another group to take over the next July, after the current tenants leave. With no ability to end a tenancy at the end of the academic year, landlords have much less of an ability to ensure a smooth transition to their next group of tenants. And of course, there’s a worry tenants will drop out midway through the year. The result will likely mean more and more landlords exit the student market, some choosing to rent in the non-student rental market and some selling up.

Ben Beadle, chief exec for the NRLA emphasised this point: “It is inevitable that such a move will force some student landlords to rethink their portfolios and move out of the sector altogether. This in turn will reduce the accommodation options open to students, with a reduction in supply pushing up rents.

“The poorest will be hit hardest, unable to afford homes in the purpose-built blocks, which can be £120 more per month to rent, as PRS landlords exit the PRS student market.”

Charlie Inness

MOUNTING A DEFENCE

Landlords in Scotland are attempting to fight back though, with a nine-page legal complaint which argued that the new legislation has led to “a material adverse impact on the income and capital of landlords renting a property in Scotland”.

John Blackwood, Chief exec of the Scottish Association of landlords said: “While the Scottish government sees fit to raise council and housing association tenants’ rents, so social landlords can do repairs and improvements, they fail to realise that private landlords are faced with similar financial pressures.”

“The [recent] ministerial statement in Parliament and announcement, make it perfectly clear the Scottish government plans to continue with the eviction ban and rent increase restrictions in the private rented sector beyond March 31st. Landlords have had enough…We must stand united to protect our property rights by challenging this unfair legislation in court.”

Propertymark’s CEO Nathan Emerson said: “The private rented sector has been clearly singled out with complete disregard for the positive impact it provides. It is vital that we ensure that the residential property sector in Scotland is investible and that is why we have been left with no choice but to formally object to these measures with the Court of Session in Scotland.”

If all of this sounds like quite a mess, it’s probably because it is.

The scary thing is we know that the rest of the UK is watching what happens in Scotland right now. It may well be that what’s happening in Scotland will turn into the beta test

for more controls in the private rental sector south of the border, with the Renters’ Reform Bill proposal coming to mind for many. As a reminder, the Renters’ Reform Bill had numerous proposals, the main ones:

• Scrap section 21 ‘no fault’ evictions

• Create a register of landlords

• Introduce a private rented ombudsman to help enforce renters’ rights

• Make it illegal for landlords and agents to refuse to rent properties to people who receive benefits

• Give local authorities more power to enforce and protect renters’ rights

Or will the powers that be watch on and change their mind about some of the changes? Will the situation in Scotland get so bad, landlords cut their losses, perhaps even setting up shop in England, and everything really falls apart? Will the governments take note then? Well, that’s crystal ball territory, and I didn’t see England finishing 4th in the Six Nations so I’m currently returning my crystal ball to Aldi. What I will say, is if Duhan Van Der Merwe wants to move and build a property portfolio in England rather than Scotland, we’ll take him. That lad is a machine on the pitch.

Inness had some interesting thoughts.

“In most cases the private Residential Tenancy operates fine, I think the ongoing arguments down south about the removal of section 21 to be overly emotive. The market continues to operate in Scotland and personally, I will continue to invest.”

PROPERTY TAX

Astonia Associates are one of the country’s leading Accountancy & Tax specialists and advisors in Land and Property related strategies and techniques including:

• Rent to Rent (R2R)

• Rent to SA (Rent to Serviced Accommodation)

• Buy to Lets (BTL)

• 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.

FAMILY FORTUNES

Property is best approached as a long term game. As such the benefits can be even greater if you get your children involved, with compound growth realised over generations, not just years. Alex Daley talks to a couple of families who are playing the generational property game to their advantage. (Plus hear from an expert on p27 about how best to set your family finances up for success).

For some, the goal is to build portfolios to provide a legacy for their children. Many investors bring their family into their property business for tax reasons, you only need to hit the Buy to Let Property Group’s search bar and search for ‘husband’ or ‘wife’ to see how many are looking at that.

For others building a portfolio is very much a family business. They have bought their children into the property world, sometimes at a young age, teaching them, learning with them, making mistakes with them and hopefully having some fun along the way.

Although there is the challenge of getting through the Sunday roast without discussing problem tenants, there can be great benefits to investing together as a family as you not only share the wealth across the generations but also the know-how and pride of establishing a family business. But how do you set the business up to future-proof it? And can having your loved ones involved in the property process be too much of a good thing?

We decided to chat to some investors who are definitely keeping it all in the family to find out more…

OUR FIRST FAMILY

Single mum Kathryn Southall 50 years young, 22-year-old Grace and 20-year-old Izzy, have built a BTL portfolio together predominantly around Wigan. They follow the BRRR method for their rentals but are now looking at serviced accommodation as their next strategy. The story was a warming one to hear, creating selfdependence and growing together.

SO WHERE DID IT ALL BEGIN?

Kathryn’s journey in property started in 2015 after being left having to figure things out after her relationship ended.

“I turned to property because I was a single mum. I had found myself in a position where I wasn’t financially independent, I was very dependent on a person that used money as a kind of control tool. And so a big driver of mine, from an emotional standpoint was that I wanted to teach the girls how to be financially independent,” she recounts.

But it was also about buying back time.

“Being a single mum I realised any kind of conventional job would require me to take more time away from the girls. You don’t get enough holidays. I don’t know how many weeks of school holidays there are, I think there are about 13, and your average job gives you five weeks, I didn’t want that. For me, it was a bad enough feeling that there was only one parent around, for that parent not to be there for ten hours a day. So, I really needed something that fit in with them, so that I could still turn up to the school assembly and I could still take them to their various sports clubs that they go to. Property always appealed to me and it just seemed a really good option. It wasn’t originally to bring them into the family business.”

SELF-DEVELOPMENT

Self-development seems at the heart of Kathryn’s mission and something she’s passed on to her girls. As a result of dedicating her life to raising her kids, she hadn’t got a handle on the financial side of things. So she dived into learning.

“I was fascinated by the self-development, reading, watching, I was like, ‘Wow, who knew? You know who knew this stuff?’ You don’t get taught it at school, you don’t get taught it. So I have made it my mission over the last seven or eight years to really guide them (her daughters) in that sense. It doesn’t have to be property. Although to me, property is a no-brainer. Something running in the background which, with the girls being so young, it gives them a huge head start. They know as much as me, whatever their future holds, they are so much more financially aware,” explains Kathryn.

“And if I can help them build something in the background as they grow up. Let’s say in 10 years’ time and they’ve managed to get a handful of buy to lets, well what brilliant choices they’ve got when they have children, they will have an income they could refinance those and take some money out which would allow them to take time out of a job without having to worry. And if they’re in a relationship and that relationship doesn’t work out, lots don’t, then they’ve still got that financial independence and

GRACE STARTING

Grace (22) was the first of the daughters to roll up her sleeves and get stuck in. It started as a part-time job but turned into working full-time when she finished her schooling.

“I was 16, and I started off just doing bookkeeping, I was at Debenhams parttime as well, so I just used to do that on the weekend. When I left college I came on full-time, we had a tiny little home office, vision boards everywhere and I’d be looking for properties, ringing for viewings, going through the figures and seeing if they work. Mum would chase the more important stages, the builders and teams, I was quite scared back then!” she tells ON THE HOUSE Magazine.

Fast forward a little to the midst of the COVID pandemic: “House prices had gone up a lot, so our previous strategies didn’t work as well in the market as it was the other end of COVID, but we did end up getting our own office.”

She continues, “Probably 95% of my knowledge has been from mum, everything has come from what she’s learned through seminars and training courses. Literally everything, the amount of value that she’s given me doesn’t even come across in the wage I was getting. It’s 10X more. It was so good. And you just can’t get that anywhere else. Being in a family, you can ask a question whenever you want. She’s always there to help. I mean, her office is in her garden. So, if you need to get anything, it’s all there.”

GRACE AND IZZY’S FIRST HOUSE

For their first house, the girls decided to buy one together, it was something they were looking at, but like their family investments, the plan was always to buy and then add value.

Grace sent a possible house to her mum who asked ‘what strategy are you thinking for this one?’ Her response, ‘I was thinking about it for me and Izzy’. They worked out they could get it and fund the renovation. Izzy hadn’t been to the viewing but Grace had run the sums. And it was on!

“Offer accepted in the January, I think, and the process of actually getting the property took months.” Grace explains, “It took about six months in the end but that was a learning curve for us because obviously going through solicitors, going through brokers, speaking to estate agents when it’s regarding your own house sale or buying your own house is different to when you’re buying it on behalf of the company or sourcing it onto someone else. So we learnt a lot through that. But we were always going to mum, ‘Mum, please can you help?’

‘What does this mean?’ ‘What are they actually asking for?’ And so that went on quite a while and then we got the keys. And we all came

round sat in the garden had a glass of Prosecco talking about the big job we had to do.”

Learning from the family business clearly left its mark.

“I think because I’ve been in the property business for nearly six years now, I don’t think I could ever buy a house already done. I just don’t think it’s in me when you see the profits, you can make by just adding a slight refurb and then getting the money out the other end. I don’t think it would ever be an option for me,” Grace says, with Izzy agreeing.

“But overall it’s turned out really nice and we’re really proud of it. To pull it off in two months as well. We had a lot of trades that we already knew from being obviously in the industry for a few years, which helped quite a lot with little bits that just crop up when doing a property up. But we had good fun,” she adds.

Of course, we had to ask - in every work environment there’s always going to be tension, frustrated words but also a lot of laughs - how do they find working together?

“I’m just going to say I think it’s very bittersweet because with families you can be much more upfront about things than you would

not be with anyone else, you’re not afraid to say something when it comes to family because you know nothing will get between us,” says Grace.

“I know nothing that’s said would be that long-lasting, but with other people, if it was a company and someone who wasn’t in our family was involved, you would. You would probably restrict yourself and not say those things of maybe sometimes they could have been said a bit nicer, but I think I definitely think that anyway. It’s easier when it’s your family I think.”

Izzy (20), who seems to be a bit of a whiz using CAD (computeraided design) designs the mock-ups but was slightly less enthusiastic about working together.

“I don’t have the patience, maybe I’m not the best at delivering when it came to the family business. It can be chaotic at times but also can be so rewarding, the fact we can do it together. If one of us learns something, we all learn it.”

Mum says there was also a bit of resistance from the girls at first.

“At first they were really not interested, Izzy used to say used to say ‘ohh everything that you get involved in is just dirty and old,” recalls Kathyrn.

“I was a bit upset, but then weirdly, as often happens with children. You just kind of drip-feed these bits. So I largely left them and then they come to you. So at first, it was really lonely. And it felt like, you know, here I am working really hard at these and nobody cares and nobody’s interested… And I so wanted to share the amazing things you could achieve. Weirdly, it just kind of came about, and the next thing you know, they both come forward. Grace first, being the eldest, and then Izzy, you know, and then suddenly they’re really interested in it. And actually, they have been listening. And there have been, kind of observing.

“We’re all quite big personalities, there are a lot of females, a lot of hormones and a lot of opinions in the household in general!”

“I’m honest, brutally honest sometimes with the girls and myself sometimes. But if someone’s telling you something, it’s their truth and maybe you have to self-reflect on it. So they’re awesome teachers to me at times because they do reflect, they’re not frightened to say things to me,” adds Kathryn.

KEY LEARNINGS

We asked the family what important lessons they have taken on board from working together and they provided some great insights.

Izzy - “I think one thing is that obviously when you’re working at home and you working together as a family, it’s really hard to differentiate, between work and not work. If we’ve been talking about it in like the office, then we’ll go have our dinner, talk around the dinner table and there’s no break. We could all talk endlessly about property, couldn’t we? So we have to kind of put in boundaries.”

Grace - “If we’d had a bad day or maybe one of us had slipped up and that issue was within work, we’d have to ensure that as soon as we left the office, it doesn’t affect our family relationship. It’s solely in the workplace, will deal with it as a professional at work. I went through a phase of calling mum Kathryn.”

Kathryn - “Keep being honest, let them be themselves and use their own skillset, everyone has their own skills, I think it’s key each individual has their role and you all know what it is.”

And the final question, will this family business continue for future generations?

“Yeah, absolutely,” beams Izzy. “I think I would definitely start putting preparations in place for my kids to be able to see the same [building of a portfolio], obviously, depending if it still works at that point. But I think it’s in our genes and it would be hard not to really carry that on.

GO BIG AND GO FOR A CARE HOME!

Enter our second family making moves in property. Mother and daughter duo Paula (55) and Natalie Bailey (31). Natalie is based in sunny Majorca and the two of them run a property development company as well as a mastermind and retreat business. Alongside that, Natalie also runs a very successful, Confidence Mastery podcast - quite the busy ladies!

In recent years they’ve refined their business, previously it was both development and serviced accommodation.

“We used to run service accommodation together as well and so we had a number of properties in York. It’s a business we’ve now shut down. The serviced accommodation route was just another job and neither of us really enjoyed it,” Paula explains.

Natalie picks up the thread: “It didn’t suit our personalities. It’s a great tool. It’s a great model. If you enjoy that kind of thing. It’s not a property business, it’s hospitality. And I do enough kind of hospitality in terms of running the mastermind and stuff and I enjoy seeing the success that people have, but neither of us enjoyed setting up and running that service accommodation business. Life is too short to be miserable. Do things that you enjoy that give you joy and make you happy, as well as make money.”

So the pair have decided to go big, or more accurately, go care home.

“We’re currently developing a decommissioned care home and have made 30 new homes out of it. A mix of one, two and three beds to cover a lot of the market,” says Natalie. “From first-time buyers to downsizers and investors. As a scheme, it’s huge, it’s a multi-million pounds scheme. It’s a 20,000-square-foot building, in fact, it’s bigger now and with land around it.”

That is majorly impressive but let’s rewind. How did it all start for the Baileys?

Paula was the initial driving force in the property side of things, with the mastermind and retreats coming later in their property journey being very much Natalie’s ‘baby’.

“We decided we wanted to get involved together in the property

business. It was about five years ago, it started out off as my baby entirely but I wanted Natalie to be involved. I didn’t quite drag her in, but it took a bit more convincing,” Paula laughs. “We wanted to do things on a bigger scale.”

Natalie continues: “We don’t do mediocre and [on the larger projects] there’s an economy of scale as well. Honestly, you know you can go through as much pain, refurb in one house as you can do in a development that size.”

The duo also wanted to make an impact: “It’s more about the fact there aren’t enough homes being built and we really need to build homes. So you know one here and one there and being a landlord in one house wasn’t as appealing,” explains Paula. “That wasn’t the legacy we’re looking to create. You’re only going to meet housing needs if you actually build new houses!”

BETTER TOGETHER

“Property is a pretty lonely business and a hard thing to do by yourself, when I left the corporate world and I started to work at home by myself, I found myself literally looking around kind of like where is everybody? I mean it is really lonely. I didn’t want to just create a legacy to leave, I wanted to build the legacy together,” states Paula.

Natalie’s take on it: “Mum’s important to me. So, us being able to create stuff together and do this together, it’s nice because I’m not gonna get to the end of my life and think I wish I had a better relationship with my mum.”

So, what advice would you give to families considering working together?

Natalie: “Setting some boundaries on business and family time in the beginning because, I mean, ultimately we will sit and have dinner and we’ll end up talking about our business because that is our life that’s part of our life. But then we also have set times where we’ll do it purely just for work. So if we’re going and having some fun, if the conversation comes around to work, that’s fine. For me, I’m very much cut off from work in the evening because I don’t sleep well. So we’ve had a few issues as Mum works very well late at night cause it’s quiet so that suits her.”

Natalie says it did take some adjusting at the start, as you’d expect.

“We both can tell each other what to do. That was fine. So understanding that I’m not a child, I’m not being told what to do in that way. This is for the benefit of the business. And the other way around, when I ask mum to do something, it’s not as a daughter, it’s business.”

Paula: “I like working late. When I’m working at midnight, I’m happy, my mind is like ‘ohh I’ve got the silence now.’ I haven’t got emails pinging through annoying me and getting in the way I can concentrate on stuff and Natalie’s like, no, I’m going to bed and I’m an hour ahead. But the benefit is we know each other, so we know the flaws, we know the benefits, we know what’s gonna work, and we trust each other.”

STARTING HIM YOUNG ON THE HOUSE Magazine Editor, Julian Pletts writes:

So parrots our nine-year-old son back to us when asked as I smile to myself with a sense of pride and a little hint of smugness.

Like many in the property investment world and everyone’s favourite money-saving expert, we feel that to not teach the next generation about finances and investing and to just follow the status quo is to do them a major disservice.

That is why I’m proud to say we practice what we are preaching in this issue and our young son has been actively involved in portfolio discussions and even a little bit of low-level on site renovation work. (Here he is happily ripping up old flooring and painting at one of our most recent projects!)

I’m fascinated to hear about the success and personal stories of the families that are sticking together through the ups and downs of property projects and it only makes me more enthused about getting our son further involved in our business in the future - if he want to be.

Kathryn, is right on the money when she says you have to drip feed kids the information and can’t expect them to get excited about it all at once. But if you are willing to put in the time and explain the concepts to them I can’t see anything but upside in the future for the next generation of property investors, even if they do have to work within a broken housing system and a more challenging regulatory environment.

For now though, I’m just happy when our son asks to come and look at our latest property and continues to work on the greetings card business that he set up for charity during lockdown. I know property may not be his bag when he gets older but for now it’s great that he’s taking an interest. I would absolutely love to hear from more investors who have taken the family route or those for whom their children don’t want to get involved and how you plan to manage that, so feel free to drop me an email at julian@onthehousemag.co.uk

“An asset is something that puts money in your pocket. A liability is something that takes money out.”

NO ACCOUNTING FOR FAMILY

When creating a company or group of companies, it is a very exciting time to bring your business ideas into reality.

It can be relatively inexpensive to use one of the many online company formation agents, but are you setting the company up correctly and are you receiving the correct company formation documents to ensure that your corporate governance obligations are sound e.g. share certificates, company register, effective memorandum and articles of associations. Most online formation agents will create a company with a standard share class, which may be ok for your specific business requirements for today.

However, if there are various joint ventures or family shareholders that are involved in the company then it may be far more beneficial to understand and use alphabet shares, freezer shares and growth shares etc in order to plan for tax efficiently into the future for yourself and your family.

Alternatively, the use of Limited Liability Partnerships (LLP’s) may be beneficial in property planning too. By issuing different classes of shares in a company this allows for different amounts of dividends to be paid to the different classes of shareholders. It needs to be made very clear regarding the investment or physically work contribution that an individual is making to the business. This can be particularly beneficial between spouses for example if spouses are paying tax at different tax rates.

The shares can also carry different ownership rights and different voting rights and can also be placed into trust for the benefit of other family members depending upon personal circumstances. With all tax planning of this nature the structures need to be set up properly with all of the relevant corporate governance paperwork in place.

What is a Family Investment Company?

A Family Investment Company (FIC) is one that undertakes investments rather than trading. These investments can be equity

portfolios or property. It is generally set up by a founder, transferring cash or assets into the company, typically by way of a loan. FIC profits are taxed at corporation tax rates rather than being taxed on income or capital gains which may create significant tax savings, compared to what an individual would pay, especially if the individuals/s would be paying the additional rate of tax.

Family Investment Companies also provide Inheritance Tax benefits, which can potentially reduce or mitigate any future IHT liabilities.

Generally, at least two classes of shares are created:

• The founder’s shares carry voting rights but no rights to capital growth.

• The other class of shares are given to family members, who have a right to capital and income but limited or no control over the company.

The founder is typically also a director of the Family Investment Company. The other shareholders cannot make decisions about investment strategy or the issue of dividends, but they are able to benefit financially. The growth in value of company assets can be removed from the founder’s estate for inheritance tax purposes.

The structure is very flexible and can be tailored to meet individual circumstances and it is important for bespoke articles of association and shareholders’ agreements to be produced.

This is to regulate which family members can make decisions. It also manages what happens when the shareholders die or when other different business or life event scenarios occur.

As said, specific advice is required for your own personal circumstances and the above is purely for general guidance so don’t be afraid to get in touch with Paul and his associates here.

Getting your business accounting sorted correctly is always going to be key, perhaps even more so when investing as a family unit. Therefore, to complement our cover feature Paul Weller, MD of Astonia Associates provides some general advice to get to grips with accounting and tax structures for family businesses. As always, specific advice is needed – this is meant as an introduction.

DOWN AND DIRTY WITH HMOs

In the second part of our focus on how to make HMOs work in today’s market, Alex Daley really drills down into the detail with a duo of experts on planning and conversions. If you want to get it past the council you need to read this

Last month we sat down with Rick Gannon, who gave us a good overview of the HMO strategy. If you missed that, it’s a great place to start, go back, give it a read and we’ll see you back here in about five mins….

You’re still here…

Why haven’t you clicked that link?

OK good you’ve read it now, we can continue.

This month, we take a deep dive, getting into the nitty gritty with HMO Architects founders Ryan Windsor (pictured below, right) and Giovanni Patania (below, left). Their assignment was simple, give us the details that we all want to know and skip all the surface-level stuff. They understood the assignment.

Rick, last month, was very adamant the best place to start with HMOs was creating them yourselves. So, let’s kick-off, what sort of properties might you look to convert?

“The most typical kind of conversation are family houses, usually three beds converted to six bed HMOs with a rear and dormer extension. These are great ways to add value.”

Patania explains.

“Investors need to familiarise themselves with full compliance with HMO development, they don’t want the council coming around and threatening planning enforcement, the investor needs to be compliant with not one, not two but three sets of regulations. Each one is completely separate and independent from the others. Planning, building control and licensing. A lot of investors make the mistake of thinking planning and licensing are the same thing, it’s not true, they’re separated, different council departments who rarely speak with each other,” he continues.

Windsor, who we also interviewed about his own portfolio-building experience which will be released in the next issue was keen to reinforce just how critical this is.

“I can’t stress this enough, we probably get five calls a day wh people have developed a property, and done everything right but haven’t done the very simple change of use. They keep referring that they’ve got the licence but the planning change of use can cause a lot of problems - with the mortgage lender or council.”

PROPER ARTICLE

Article 4 direction is a phrase you often see mentioned on the Facebook group, often abbreviated to A4, it essentially means the removal of permitted development. I.e., the right to develop certain aspects of the property without seeking permission.

Patania explains: “Normally HMO conversions

up to six occupants can be done from a family house to HMO under permitted development (PD), but in some areas, where the concentration of HMOs becomes unreasonably high, the council try to balance family and HMOs. This is often no more than 30% in an area - postcode, or area of the city, it depends on the council.”

He continues… “A4 is a tool to remove the PD rights that normally you’d have. It doesn’t mean you can’t do HMOs but it means you have to apply. This depends on the council, sometimes it’s black and white, and sometimes you can get an HMO through.”

INSIDER KNOWLEDGE

Now for the good bit - Patania was able to explain exactly what the council looks at when deciding whether to grant or not.

“There are three deal-breaking categories, in our experience, if any of these applies, you can’t do an HMO, doesn’t matter how beautiful the design or spacious the rooms, you won’t get it through,” he says.

1. Concentration - for example, Liverpool has a threshold of 10%, Kensington in Liverpool has 43% concentration and A4 came in, so in Kensington Liverpool, there just won’t be any more HMOs. Other areas are maybe 4, 5% so you can still convert HMOs. Having a relationship with the council here makes it easier to find out concentration etc, some councils make it easy, some don’t and it’s quite complex.

2. Sandwiching - some councils won’t allow an HMO conversion if the property is attached to another existing HMO or if there is one just one property away from your one, assuming terrace houses. If this policy is in place, it’s black and white. And this is regardless of the number of occupants, the policy will apply.

3. Size - we see this often in London and its surroundings, where they really want to protect specific types of family housing stock. Some councils will say if the property is bigger than 120sqm (for example) they might accept conversion. If it’s less than that, they want to keep it for families so will say no. They still complain if the property is only a little above the limit. The safe way is to buy a property well above the limit they set. e.g if it says 120sqm, you ideally have 150 sqm.”

The key learning here is that just because there’s an A4 directive in place, doesn’t necessarily mean it’s a no go. There may be pockets where there’s potential, there are other pockets where you’d get laughed out of the door. This is partly where Windsor and Patania, along with their team, can help.

“We offer a specific service to do all of this due-diligence pre-purchase. Reports, design appraisal, sketching, basically highlighting all of the risks and constraints. We’d rather do that and if it’s a real bad situation with one of the deal breakers, we’ll tell you and you don’t waste time and money.”

ORDER, ORDER I SAY!

So, the question then is, where does this all fit within the buying process? What’s the order? Do you buy, apply and build? Do you apply, buy, and then build?

Windsor says: “If you can do an offer on a property subject to permission that’s the dream, but you have to get the other party to agree, many sellers won’t want to. Most of our clients will come and speak to us, we’ll give them some general advice in terms of how to assess deals, they’ll go away, do their viewings and run their calculations, discount a few, and then they’ll come to us on a pre-purchase consultation call. From that we’ll work with them to discount any of them, and prioritise the remaining into a preference order. Then they secure it, we then do more due-diligence and then they make the final decision on whether they push forward.

“We always want to get as much of planning application done as we can before they actually take on the property and take on the liability of the mortgage or the bridging (to minimise time paying financing costs, this can save thousands),” adds Windsor.

On timelines, he told us: “On an average HMO we’re looking at six weeks to submit an application and then the council on average, you’re looking at three months for their decision. One of our colleagues who was head of planning in her council said that, on average, a council officer should have 10 applications on their desk at any time, she says many have over 170 on their desks at the moment which is just mental.”

OTH Mag wishes to go on record here to say that on hearing this, our interviewer, Alex Daley, cracked the gag “must be a pretty big desk!” Which was greeted with absolutely no laughter. Not even a pity laugh. Whilst Windsor and Patania may know what they’re talking about when it comes to HMO conversions, they clearly don’t appreciate good banter when they hear it.

FAILED BANTER ASIDE…

But look, there are negatives to this whole conversion business as Windsor explains: “If you get the wrong advice you can get scuppered straight away, it can be more of a risk. With any development, there’s a risk, during the pandemic building sites got shut down for example. It can also open up a can of worms, when you knock down a wall, you might see more problems than you bargained for, so you need a contingency fund at all times. Of course, having the right build team involved is key.”

Final words from the gents: Windsor - “I always try to look at loft conversions, they cost about £35-40k depending on where you are in the country but can see a great return on investment, we often see 20% ROI from that based on what they bring in. Let alone value add. Some of our clients will even offer that room

as an AirBnB room.”

Patania - “Many people underestimate how slow councils can be, so if they’re using bridging, they really need to take this into account. Managing timelines is one of the biggest challenges.”

And there you have it, we’ve snorkeled with one of the most known HMO investors in the UK last month, taking a good look at things from a high-level perspective, and now we’ve gone deep sea diving with the detail-crazed HMO architect nerds.

TWO-BED TERRACE RENO, CHORLEY

OTH: Tell us a bit about you and your property investing journey so far...

My wife and I live in the North West. We both work full-time with two young children so life is pretty hectic but we are keen to build a property portfolio and this is the first property investment for us. The main objective for us is to build additional revenue streams to enable us to become more financially independent in the future and enjoy more time with family and eventually escape the 9-5! We mainly learnt about property investing through online research and following Facebook groups. I’ve read a lot of personal finance books which also cover property investment. I think the key part is making sure the numbers stack up, and like any investing you need to take the emotion away from it. We were both keen to invest in property and my wife trusted me to make sure the numbers stacked up before we made an offer on the property.

I’m a chartered accountant which really helps me appraise the numbers. As an accountant, I would have to say that the numbers are key to success.

OTH: Please tell us about the project and how it was sourced? We were looking for a property that needed some TLC so that we could do the work on it ourselves and add as much value as possible. I found the property on RightMove. Our plan was to buy, refurb, rent and eventually refinance when the time is right, for the next investment.

We chose to buy a rental property in our hometown, partly because we know the local market very well and also just for ease. The area is Chorley near Preston, Central Lancashire.

OTH: Why did you feel this property was a good prospect?

The property had been let to a long-term tenant for a number of years and recently had some roof issues that had caused water ingress. The roof issues had been resolved and the property was structurally sound but was in desperate need of refurbishment and modernisation. Given the condition of the property and that fact that the work needed was largely cosmetic, we knew we could add value to the property and that it would achieve much better rent once refurbished.

It may sound like a straightforward project but the arrival a new family member, coupled with doing the majority of the work themselves and trying to keep the budget super tight made this a challenging renovation for Ryan and Hannah Pearson

OTH: How did you decide or manage to finance the deal?

Interest only BTL mortgage. We used a broker who was really helpful and we timed it very well inadvertently, as we secured a BTL mortgage at 1.95% on a 5yr fix just before the rate hikes! To be honest, securing the mortgage was pain-free. Our broker did a great job.

OTH: Talk us through the plans, the process and the end result?

The property is a two-bed terraced property with downstairs bathroom. The condition of the property was very poor. The kitchen and bathroom were probably 30+ years old and barely functional, so we knew these would need replacing. The walls downstairs were in poor condition as there had been damp issues due to previous roofing and draining issues, so we decided to reskim all the way through downstairs as well. Upstairs needed less doing so we replaced the carpet and fittings, and repainted.

OTH: Please provide details of any challenges or unexpected roadblocks that you faced and had to overcome during the renovation process?

We were keen to keep the renovation costs to a minimum so as well as completing all of the work, apart from gas and electric ourselves, with help from family at times, we also looked for the best value in materials. For example we bought a second-hand kitchen off Facebook for £750 including the oven and sink, and we bought inexpensive floor tiles to do the entire downstairs. The flipside to doing it ourselves was time. Almost everything took us twice as long as we expected given we were learning as we went.

OTH: Oh that’s interesting how did you learn as you go? What sources where you learning from?

YouTube and also with help from family e.g. my father in law taught me how to plaster. We also had our second child during the renovation so we stopped work for a few months, which delayed the process further.

OTH: Wow, so a new-born, lack of sleep, another child and you also had a renovation to finish! Crikey that must have been an exhausting time. How on earth did you manage to juggle that and also we assume a full-time job? It was very tough, both for me doing the work at every spare evening and weekend, and for my wife looking after both kids and taking care of everything else, but you get out what you put in!

OTH: How do you feel about the end result and how it works for you as part of your portfolio or overall investment picture?

We are really pleased with the end result. It was a learning curve so, whilst it consumed a lot of our evenings and weekends and its been physically demanding, we have learnt so much along the way and created a good quality, durable living space. We were lucky to secure a cheap mortgage before the rate hikes so the numbers really stack up and we have built a decent amount of equity with our first project. On to the next!

OTH: Are you self-managing the property? We are using an agent to fully manage the property for now given it’s our first and we are very time poor at the moment!

OTH: What lessons, key learnings and philosophy will you take with you from this project to future investments?

In future, we would not do all of the work ourselves. Whilst we saved lots of money, it took us far longer than anticipated and I missed out on a lot of time with my family. So next time, we will budget for some of the work to be done by professionals and accept a lower return. That said, we have learnt lots of valuable skills along the way so we are glad we did it ourselves for the first one.

THE NUMBERS

Purchase price £98K

(around market value for its condition)

Renovation estimate £5,000

Estimated ARV N/A

Fees and Legal £4,000

Renovation actual £7,000

Actual ARV £135K

Rental amount PCM £650 Net cashflow PCM £410

Cash left in Deal £35.5K - £28K

(available when refinanced leaving about £8K in deal)

ROI 14% (Annual)

Welcome to beginner’s corner - Each issue in this special section of ON THE HOUSE Magazine we will deep dive into an important step that will help newbie investors on their way to being fully-fledged property investors.

HOW TO STACK A PROPERTY DEAL

Knowing your numbers is property 101 so if you want to succeed stacking needs to become second nature. In the third outing of our Beginner’s Corner Alex Daley explains more… (Plus scroll down for a FREE STACKING SHEET)

We’ve explored what strategy to choose, we’ve explored where you might want to set up camp, and today, we discuss deal stacking. Ensuring your deal stacks is make or break when it comes to your property success. And it’s the area that, unfortunately, has meant lots of property investors have been stung recently.

There are countless examples of investors who bought properties over the last few years, took advantage of the very cheap debt, fixing mortgages at 1,2%, which made their numbers look much more attractive than in reality, they would continue to look. Investors were seeing a few hundred pounds in profit each month and enjoying the capital appreciation.

Unfortunately, when they came around to refinance or perhaps are yet to do that, when they do, they suddenly see rates that are often well over double what they’d previously been on. Suddenly, many BTLs are barely paying for themselves, let alone when major expenses come around.

We don’t want to paint a really bleak picture, but it’s important to realise the truth, lots of people’s BTLs make very, very little money. Gone are the days where you could pick up any property and make a really solid return. What the last six months have shown, is finding the right deals is a skill. Being honest about figures and potential future figures is crucial. And hiding from inevitable costs is a recipe for disaster.

Luckily, at OTH Magazine, we’ve got you covered.

TOP OF THE STACK

Let’s start from the top, what is deal stacking?

“Deal stacking is an integral part of determining whether a deal is worth pursuing or not. It involves using all known financial data i.e. works costs, rental amounts, refinance after works, value uplift etc. Get the numbers right in order to get the deal right. Never manipulate the numbers to try to make the deal work,” explains Wes De Leur, the Buy To Let Property Group founder and long-term investor.

So where do we start?

Well first, let’s gather the information that won’t vary massively so we have that to hand to build our deal stacking sheet.

As often is the way, this means a call to a broker, to get an idea of what rates you’re going to have access to. There’s no point in Googling to find out what the lowest BTL rate is, when you may not qualify. You want to get a feel for interest rates and any fees, which could be valuation fees, product fees, their fees etc.

Rental figures

The make or break elements to seeing if deals stack is getting good

info on what potential properties will rent for. This can’t be guesswork, if you’re £100 out, that’s £100 less profit, and could be the difference between buy or no buy.

What we look at here are called ‘comparables’, properties that are similar enough to the one you’re looking at buying as to give us a good idea of what the rental market is like. The best place to start is Rightmove, rent section, within 1/4 mile of your prospective investment’s postcode, inputting the key details - terrace, semi, detached or if it’s a flat, number of bedrooms and click ‘include let agreed’. If nothing really shows up, you can expand that radius to 1/2 mile. But you’ll need to rely on your knowledge of the area to know whether certain areas within the search are too different to be direct comparables. There are plenty of places in cities where a couple of streets will make a world of difference between rental income and desirability.

Once you have your list of properties (pay more attention to ‘let agreed’ as it gives a better indication of what’s being let not just offered) look through each one, and get a feel for the quality of finish and what that means rent-wise. You’re looking to be quite strict with yourself here, if someone has a much higher spec than you’re going to do, is it really worth the same? Soon, you’ll build a picture of what your property will likely be worth on the rental market. You can also phone a letting agent to sanity-check you.

Stress testing

This is key and will be the moment you see whether your potential investment can stack up as a good deal in tough times, as well as good. It’s where many investors got complacent during the 2% interest days. Previously, the general standard was to stress test at 5.5-6% and see if the deal still makes sense. If these last six months have taught us anything, it’s that it’s better to be more conservative with these calculations than sorry. Right now, we’d suggest you stress test deals to at least 8%. Now, that would have seemed bonkers this time last year. If you can make your deal work at 8%, the likely case is, you’re looking at the right type of property.

On your spreadsheet, it’s good to have two profit calculations, one at the expected interest rate and the second at the stress-tested rate - to see if you’ll you survive if the proverbial hits the fan and rates go up. Lendlord (free version) has a really neat deal analyser which allows you to track future performance, we encourage using that, alongside your own spreadsheet to get a full picture.

Counting the Costs

COSTS YOU MAY NOT HAVE CONSIDERED:

• Insurance

• EICR (this can be over £1,000 if there’s remedial work that needs doing).

• Annual gas certificate

• Holding costs until you get it rented out (council tax, utilities)

• Independent legal advice

COSTS THAT ARE OFTEN UNDERESTIMATED

• Maintenance - read our article on predicting long-term maintenance costs, much better to manage your expectations now than get a few years down the line and feel like the costs have come out of nowhere. Read this to get a real feel of the true costs.

• Renovation costs - whatever you think it’ll cost, it won’t! And it’ll take longer which adds to those holding costs. Renovation master Martin Rapley gave us a masterclass in this here.

FREE DOWNLOAD: STACKING SHEET

Building a spreadsheet can take hours, but we’ve built one that will get you started, copy it, edit it, make it your own and populate it with a bunch of deals. You’ll quite quickly see which deals work already and which you need to negotiate a big sum off the price. And that’s what this tool is all about, giving you a quick and easy way to see at what price, each property is worthwhile to you. Happy stacking!

DOWNLOAD NOW

Ramsay & White are the Buy to Let Property Group’s preferred mortgage brokers but they are also experienced property investors too. So it’s MD Joel White thought it would a good idea to talk about some of the common investing errors and pitfalls to avoid when starting out.

While property investing can offer lucrative financial rewards, without experience and guidance, it can be easy to quickly lose money, time, and sleep.

Here are some of the most common mistakes inexperienced landlords make, so you can avoid doing the same:

PAYING TOO MUCH

Never pay over the odds for the first deal you see and, if you can, get a builder to look over potential renovation costs. Purchasing below market value (BMV) should always be the goal. If you cannot purchase BMV, always ensure you’re getting a fair deal based on the current market and make sure you have scope to add further value to generate a healthy profit. To succeed in property, the numbers have to stack up. Property is a business, and like all businesses, every penny counts. If you want a genuine edge in any negotiation, read this.

PROVIDING THE WRONG PROPERTY

The location is vitally important, and a great location makes the difference between a flyer and a dud. Understand what location means to your investment – the rule of buying the worst house on the best street in town has stood the test of time.

Before purchasing a property for investment, do your due diligence on the area and be clear on the type of property your tenant or buyer is likely to want in that area. For example, purchasing a property in a student area and carrying out a high-quality renovation with the plan of selling it to a family is not a good idea. Conversely, buying a flat to rent to a single professional in a city centre is more on the money.

UNDERESTIMATING RENOVATION AND MAINTENANCE COSTS

As mentioned above, for your investment to generate a healthy return, getting the numbers right is crucial. This includes factoring in all costs of repairs and maintenance – which many investors underestimate. It’s important to keep your property to a standard that allows you to rent to tenants legally.

Additionally, if your properties are maintained well, you’re more likely to attract good-paying tenants. If you are doing a full renovation and want to ensure you get your costs right, read this and if you want to get a true overview of the long term costs of running a buy to let rental this is a must-read.

ASSUMING THE PROPERTY WILL ALWAYS BE RENTED

This is a poor assumption that many investors make and can be costly if the tenant stops paying or there’s a long void period. This is where using a good letting agent is incredibly valuable, as they can find the right tenant for the property, carry out all the relevant checks, and deal with any issues that arise.

RELYING ON HANDSHAKES

In the UK property market, a handshake means pretty much nothing. The deal isn’t sealed until the paperwork is signed and the keys are in your hand. Don’t get ahead of yourself if you agree to a price on a property deal – you have only reached the start line. The finish is a long way in the distance.

Your seller can pull out any time up to the exchange of contracts, so never don’t arrange the builder to come in and don’t put the building’s insurance in place until the solicitor confirms that the property is yours. Acting on handshakes rather than contracts could leave you out of pocket. If you want to get a full overview of everything that goes into the conveyancing process, read this.

NOT BEING FULLY COMPLIANT

This is arguably the most important aspect of being a landlord and should be taken extremely seriously. Failing to meet health and safety regulations could not only result in costly fines (and a prison sentence) but could risk the life of your tenant. With frequent regulation changes, an experienced letting agent can advise on the requirements the property needs to meet as well as your role as a lawful landlord. (PRO TIP: In every issue of ON THE HOUSE Magazine we include the Regulatory Round up which it intended to keep you aware of all the coming changes in requirements for landlords.)

SECURING THE WRONG TYPE OF FINANCE

Profit margins are everything in property, and there can often be changes that affect your bottom line, such as mortgage rates increasing or economic challenges causing tenants to struggle to pay their rent. Whether you need a bridging loan, auction finance, development finance or a mortgage, the right product with the best terms will help to maximise your returns. For an introduction to bridging loans check out our previous column here or for a simple overview of buy to let finance we compiled this explainer.

HAPPY TENANT, HAPPY LIFE?

As a landlord, keeping tenants happy and ensuring they pay rent is essential for maintaining a successful business and enjoying some of the benefits of property investing. Happy tenants are more likely to renew their leases, pay rent on time and take care of your property. So here are a few tips to help you keep hold of tenants even in times of unprecedented demand:

Vet tenants properly

If you are self-managing insist on meeting all the tenants who are going to be staying in your property and get to know your prospective tenants – trying to take a genuine interest in their lives. As well as a full referencing process with employment, credit and previous landlord checks, try and get a feel for how long they intend to stay in the property. How long were they in their previous property? Is their job location-stable or are they likely to have to move around? Do they have family nearby or anything tying them to the area?

Communicate Effectively

Effective communication is key to keeping your tenants happy. Be responsive to their inquiries, complaints and concerns – we are not the revenge-evicting landlord monsters the mainstream media make out. Having a decent sinking fund for your portfolio is key for this. Set up clear lines of communication through email, text, or phone.

Be Proactive with Maintenance

Keeping your rental property in good condition and being compliant to all regulations is crucial. Conduct regular inspections, fix issues quickly, and make upgrades when necessary. Create a maintenance schedule and stick to it to avoid major problems.

Treat Your Tenants with Respect

Treat your tenants as you would want to be treated. Be professional, courteous, and fair in your interactions. Avoid condescension, belittling, or talking down to them. Remember that your tenants are your customers, so try and maintain a cordial and professional working relationship where possible.

Maintain

Safe and Secure Properties

Safety and security are top priorities for tenants. Make sure your property is secure and well-lit, install smoke detectors, and provide proper locks on doors and windows. Consider offering a security system. A safe and secure property gives tenants peace of mind and makes them more likely to stay long-term.

Be Flexible

Being flexible can make all the difference when it comes to keeping tenants happy. Be open to negotiating lease terms, accommodating special requests or working with tenants who have financial difficulties. Don’t be a push over, but being firm, fair and a little bit flexible can go a long way. You are running a business, but you are also dealing with people who have unique situations and needs.

Having said all the above, it is of course still possible that tenants fail to pay rent or don’t look after your property – it happens to almost all investors at some point and in this case we thoroughly advise talking to an eviction specialist like Buy To Let Group Preferred Partner Evict My Tenant.

Remember, happy tenants are more likely to pay and stay.

The key to (relatively) passive property income – content, paying tenants. OTH Editor Julian Pletts gives his tips to cultivate the best landlord-tenant relationship possible.

THE GLOW UP Richard

In a follow on from this month’s Ones To Watch we are wowed by one of the Puchner’s really rather special HMO conversions. It’s a seven-bed all ensuite property with three self-contained studios

and Susan Puchner

“When you do the final staging, that’s my favourite part and you see it all come together, that is just really awesome!”

The Numbers

Purchase Price - £180,000

Refurb - £130,000

GDV - £390,000

Gross rent - £52,500

THE LIST

You could Google it but you’re already here… This is by no means an extensive listing but it is our personally-curated list of useful contacts, services and resources for property investing and beyond.

INSURANCE SERVICES

Falcon Insurance

LIMITED COMPANY SERVICES

GetGround

TAXES AND ACCOUNTANCY SERVICES

Astonia Associates

MAINTENANCE SERVICES

Ark

MORTGAGE SERVICES

Ramsey and White

FINANCES AND PORTFOLIO TRACKING

Hammock

PROPERTY FINANCE TRAINING

Kevin Wright – Recycle your cash

DEPOSIT PROTECTION SCHEMES

Tenancy Deposit Scheme

My Deposits

DPS

ZeroDeposit

UTILITIES

Gas Safe National Grid Energy Ombudsman

EPC SERVICES

tenancydepositscheme.com mydeposits.co.uk depositprotection.com zerodeposit.com

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.

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 wealthbuilding 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

The Complete Guide to Property Investing 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

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 exFBI 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.

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.

National Network of Accredited Assessors

Swindon Energy – Paul Crovella

Eco4 grant applications

EPC Experts

NETWORKING

gassaferegister.co.uk nationalgrid.com ombudsman-services.org theepcman.co.uk heatinggrants.io epcexperts.org

Partners in Property (PIP) – Comprehensive paid for networking and education full day sessions with a promise of zero hard sell.

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.

BTL Group Preffered Partner

PODCASTS

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

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.

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

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 a property business.

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 to 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 scene 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 only that is perfect for true property fans and also for educating yourself on pitfalls a 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 check out Ali’s best hits.

AS FEATURED IN ON THE HOUSE MAGAZINE

Martin Baker – Founder of the EPC Man Network

Kev Dendy – Action-taking new investor and member of the RoundTable Mastermind Group

Suzi Carter – Commercial Property Investment advisor, creator of the Commercial Property Academy and chartered surveyor.

Sue Simms – Social Housing investment expert, long-term investor, agency owner and partner in Partners in Property.

Kevin Wright – Property Finance Expert who has been investing in property for four decades

Danny Inman – Experienced developer, investor, business person and co-founder of Prosperity Network

Sean Thomson – South African investor who founded WealthTrek to help fellow countrypersons invest in the UK property market.

Stephen Kempt – North West ambitious investor with plans for property-funded animal rescue sanctuary

Ross Harper – Glasgow investor and businessman founder of Auction House Scotland

Debbie Dorans – North East Property investment expert, strategist and mentor. Founder of Vigeo Property Hub

Adam Lawrence – Investor with over 500 deals under his belt, co-founder or Partners in Property Network and Co-Founder at Boardroom Club Consulting

David Williams – HMO Investor and founder of Beelief Property

Lee Scott – Long-term single let property investor

Jackie Gammage – Rent to rent investor

Nick Gordon – Eviction specialist, investor and founder of Evict My Tenant

Dave Cordner – Author - ‘Serviced Accommodation 5 Star Fundamentals’, serviced accommodation coach and Founder of Central Belfast Apartments

Alfie Best – Sunday Times Rich lister, gypsy businessman and property investor.

Jamie Greaves – Serviced accommodation investor

THE RIGHT STUFF

Often, I see individuals entering the market for the wrong reasons. Maybe they have seen or heard somewhere that someone is making money from property and think it’s a good idea for them to do. Ironically, since I set up the Buy To Let Property Group on Facebook, in a roundabout way I blame social media for this sort of recruitment. However, people who answer the property draft of these ‘influencers’ without properly vetting them only really have themselves to blame.

I’ve been made aware of a recent spate of people getting into financial difficulties due to not fully understanding the processes and obligations of servicing of debt down the line. I even had someone call me a few weeks ago asking for advice. They had previously followed someone on social media who seemingly made a strategy look hassle-free to execute.

When asked about financing deals, the influencer told the individual to look at leveraging their own home, as well as personal loans to proceed in building their dream portfolio. The individual duly followed ‘influencer’s’ orders.

Here’s how it played out.

Attack – The new investor purchased three single lets. So far so good… Skirmish – But wait… they are now unable to refinance due to affordability and interest rate changes.

Retreat – They are now facing the prospect of having to possibly sell either the investment properties, their own home or both, depending on a few factors.

I really do feel sorry for the individual however, they were not properly informed of the consequences of their actions. And you know what Gunnery Sergeant Hartman would say about poor planning!

Please do your research on people you are following, do your research on funding, do your research on debt servicing and make sure you have a robust plan of action on how you intend to move forwards, as well as a plan should circumstances change. It really does need to be militarylevel preparation – the stakes are high.

Happy investing all.

Wes De Leur – Buy To Let Property Group founder says you need to be militant about your due diligence or you’ll get your marching orders or worse!