The 8th April 2024, marked the 14th anniversary of buying my first investment property at the age of twenty-two. Since then, I have made it my mission to improve the tenant experience, across a portfolio of residential assets, in the home counties surrounding London.
I never wanted to be known as a property investor. I wanted to create a culture that tenants and staff alike could buy into. A place where everyone is treated like a Rockstar.
I am always fascinated to understand why people get started in property investment, as well as what keeps investors hungry for more, year after year. Some invest in property because they believe that these assets will gift them freedom and time, which it can, if structured correctly. However, if you have set up your business in a way that contradicts that very freedom you have set out to achieve, you will no doubt find it difficult to feel consistently content.
I’m fortunate to say I have a specialist team of people who assist me in the growth and management of the Rockstar Property organisation. The team and I have built a lifetime GDV (gross development value) of over £30m, across 75 projects. However, it wasn’t always like this. Allow me to take you back to where it all began.
From the age of eleven, I was a professional drummer. I gigged my way around the circuit and at the age of twenty-two, I went on tour and travelled around Europe, South America and most of the UK. But despite my love for music, I couldn’t shake off the feeling that I wanted to understand the profit and loss account for the tour. I began to take more of an interest in business, finance and financial calculations, which was rather surprising, seeing as I had only achieved a grade ‘D’ in maths in the GCSE exam!
That financial inclination grew stronger as the tour went on, to the point where I decided to purchase my first investment property, using my life savings of £9,000. The property was a two-up-two-down house that I tried to refurbish myself, using the very modest money I had left in the bank. This property resulted in a 13.5% gross yield, which I was very happy with at the time.
However, it was my second property that changed the direction of my life entirely. One that showed me a great upside, just by making a few minor adjustments.
I purchased a second, end-terrace house for £190,000 in Farnham, near Guildford. I invited a local agent to look at the property before the refurbishment began, just to give me an idea of the current market value. The agent strolled around upstairs and asked me, “is this house a two bed?” “Yes,” I replied. He then went on, “I have been selling houses on this estate for fifteen years and I’ve never seen a two bed, the rest of them are three beds.”
He suggested that by placing a partition wall in one of the upstairs rooms and installing a window in the smallest room, then a third bedroom could be created. Furthermore, I could do the same downstairs between the kitchen and dining room, to create a fourth bedroom! “In fact, you could rent each room out to students for £550 each. There’s a university called the UCA in the town, they’re always needing more rooms,” he said. To my surprise, he was absolutely right. By making those changes the investment started to look really promising. I did exactly what the agent told me to do. I had the work arranged, made the property HMO-compliant and rented the rooms to four students, for a total of £2,200 per month. Not bad, considering the other buy-to-lets on the estate were being rented for £800 per month!
After ten months, I sold this property for a profit of £80,000. I couldn’t believe it. Not only had I run into an accidental HMO, but I also sold the asset for above the original value too. It went so well that I bought the house next door and did exactly the same. I continued this successful strategy and by the time I was thirty-one, I had bought thirty of these properties. However, it wasn’t easy. My idea was to buy and sell in my twenties so I could buy and hold in my thirties, which is exactly what happened.
One day, I should find that agent’s details and thank him for that conversation!
When I realised the difference in tax bills when refinancing versus selling, I soon started to implement the BRRR model (buy, refurbish, refinance, rent). So, nowadays, you won’t often see me selling our units. Instead, I adopt what I call, ‘buy-to-forget’. Let me explain.
Each of our properties has a clear direction it is heading in and my overall purpose is to see the portfolio become unencumbered as soon as possible. We therefore rent each property to corporate tenants (not renting by room) for the longest period possible (usually to align with the fixed-rate mortgage term). Once the tenant is in, it’s now filled and I psychologically ‘forget’ the investment exists. Now, I certainly don’t forget the property, but I do put it to the back of my mind. The key is to ensure you’ve started the investment off in the right way, that complements your end goal. For example, I want the mortgage paid off as soon as possible, so I put a capital repayment mortgage in place and even make overpayments where necessary.
Even though our properties need to be HMO-compliant, we really don’t view them as HMOs. Our primary corporate tenant houses their employees and with tenants like this, technically you’re only managing the one person from the company who organises it, making the day-to-day management of the asset easier. Rarely do our staff speak to the individual tenants who live in our properties.
A number of our properties are rented to the NHS Trust for their employees. There are housing departments within the Trust that you can contact when you have a property that will soon be launched on the lettings market. Providing the Trust have a need for property in your area, they may rent the property from you directly. It’s incredibly straight forward to start a tenancy with the NHS and thankfully, they’re a rather well-funded tenant!
Many hospitals are desperate for accommodation for their nurses, so may be thankful to receive your call. A quick phone call could be worth its weight in gold.
Even if the NHS Trust can’t take on more properties, they may instead pass on our details to nurses searching for rooms – this has worked incredibly well for us too.
Either way, working with the NHS has proven to be a wonderful way to give back, while seeing consistent results from our rental properties.
Another reason corporate clients enjoy working with us, is for the 24/7 tenant helpline we provide. Our out of hours helpline, assists tenants with any issues they have when our office is closed – even on Christmas Day! Issues with properties don’t just happen during office hours. So, I engaged a third party to provide a wrap-around care service for our valuable tenants. The helpline has been authorised to deal with everything on our behalf, from handling minor repairs (up to £150) to dealing with real emergencies, like an out of hours gas leak. Tenant safety is paramount to us.
Seeing firsthand how useful this service has been for our tenants, makes it all worth it for our in-house team.
Some investors continually release as much equity as possible, through refinancing. However, I’ve adopted a different approach. Making overpayments on your mortgage isn’t something you see being pushed in front of you on Instagram, is it? After all, a bright green Lamborghini is far more impressive, right? Well maybe for some, but not for me. It’s only when you do the sums, that you realise the extraordinary savings that come with paying off debt quicker, through overpayments – not to mention the significant decrease in risk, in times when the market drops.
I challenge you to plug in some numbers, into a free overpayment calculator you can find on Google, just to see how much interest you can save when making a small overpayment of say, £200 per month. It’s shocking to see how the figures unravel themselves when you drive the borrowing costs down, especially when you own a significant portfolio that generates a bottom line of five or even six figures every year.
Whether you’re new to property investment or experienced, my advice remains the same: find someone that has twenty or more years’ experience, who has achieved what you want to achieve and learn directly from them; let them help you to fill the gaps in your knowledge, helping you to progress to the next level.
I don’t mean buying training courses or learning from paid mentors either. My best advisors were people like my accountant, rather than those who marketed themselves to me.
I like to learn from those that have not only seen success, but they have the battle scars too. It’s equally important to learn what not to do, as much as what to do, to become successful in property investment and life in general.
I hope that you have learnt something from this article, or it has provoked some thought into how you can view property from a different angle. And remember, never lose sight of your end goal – you may just get there sooner than you think.
Feel free to follow me on the social channels below and get in touch if you have any questions.
Website: https://rockstarproperty.co.uk/
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