On 11/11, 13 years ago, I moved to the UK from N.Ireland to join my Dad in his property investment business. He had taken early retirement from work & started buying houses in the NW of England, renovating them (he was always a keen DIY’er!) & either selling them on or renting them out to tenants. My role was to be managing the properties with tenants in (boy, could I tell you a few stories about the things I experienced – some good & some bad!).
I also had quite a bit of savings from a previous corporate professional job so my Dad & I started buying more properties jointly on a Buy To Let basis. These were mainly in the Glasgow suburbs in Scotland, but we also jointly bought my first home in the NW of England. I never thought I would be a home owner (even if jointly) at only the age of 27! It was thrilling & exciting. We also undertook a lot of professional property education & had a personal mentor to help us buy a number of our Scotland Buy-to-Let properties. I felt like a whole new world had opened up to me, I even had dreams of being a property millionaire before I was 30!!
Unfortunately that didn’t happen! I must admit, I was pretty clueless & naive about the financial side of the property business. I loved the hands on stuff – helping to renovate & decorate & dealing with the people side of it. I let my Dad take care of all the business stuff including all the mortgage applications etc. We also had a mortgage broker, who was really helpful in getting us the best deals.
Unfortunately, due to (very) poor financial planning, we didn’t have an exit strategy for our mortgages & when my Dad became seriously ill in later years after multiple strokes then we found ourselves in a situation where we couldn’t take out new mortgages as my credit rating wasn’t strong enough to do so alone without him. We ended up losing all the properties – some were sold (at a small profit) & many more were repossessed. It turned out to be an extremely difficult & stressful few years. I definitely wish I had been more hands on with the financial side – maybe things would have worked out differently…
The buy-to-let market is pretty good in 2021 especially with such a high level of rental demand over the UK.
So, based on my experience, my tips for anyone looking to invest in property are –
- Get educated! From property training companies, from networking events etc. The more knowledge you have, the better your chances of success. I would highly recommend Progressive Property for their education. I did some training with them personally back when Rob & Mark were just starting out & they are great guys.
- Get clear on exactly how much you can afford to invest based on your income & circumstances. Doing the sums manually can be time-consuming & confusing if you’re not a number whizz (like me!) Use mortgage calculator tools to help you. There are also other tools available to help work out re-mortgages & mortgage over-payments. So clever!
- Have a clear exit strategy! Most buy-to-let mortgages only last for a certain number of years. How are you going to either pay off the mortgage or remortgage at the end of the period?
- Keep your credit rating in good standing. This will help you be accepted for re-mortgages etc in the future, especially if circumstances mean you have to apply alone instead of as a partnership. If you have no idea what your credit rating even is, it’s time to get clear on that too! There are a number of free sites who offer this like Experian.
- Hire tradesmen to do the work! It costs more, yes, but they are likely to do it in half the time that you could (unless you’re a DIY whizz!) & it will almost certainly be a more professional finish. I would recommend sites like My Builder to find reputable tradesmen in your area.
- Unless you like dealing with people & (often) chasing them for rent & dealing with problems at all hours of the day & night (including Christmas!!) – outsource the tenant & rent management to a letting agency. Again, they will take a % fee of the monthly rent but it is usually worth it for the reduction in hassle & stress! Have a introductory chat with some letting agencies in your local area & see which one you would feel most confident & comfortable with.
- Create a network of like-minded people who are all in the same line of business. Property or business networking events are great for this, & are often free to attend. You will likely meet some great contacts & may end up working together on projects in the future. Plus they often include guest speakers on topics so you are continually broadening your market knowledge too!
Have you had any experience with investing in property? Is it something that you would like to do in the future?
This blog post is dedicated to the memory of my Dad, who sadly passed away unexpectedly earlier this year on his 78th birthday. I love you & miss you Dad, & thank you for introducing me to the world of property & entrepreneurship even though we made some (a lot of!) mistakes & it didn’t work out perfectly! No regrets…!