Our interview festival continues. Some of you may be familiar with Property Investment Project... rants, raves and rafts of useful information for landlords. But especially rants. The man himself, a kind of buy-to-let Stig known only as "The Landlord", kindly agreed to answer a few of our questions. "Just... keep it clean," we demanded.
Tell me about the background to the Property Investment Project… am I right it started out as a specific challenge but changed direction to become what it is today?
Well, it wasn’t so much of a challenge, but more of a shameless cry for help. I had some cash lying around and I knew I wanted to invest in property. Unfortunately, at the time I severely lacked industry knowledge. In retrospect, I’m amazed at how out of my depth I was. I started an online diary, documenting my story, hoping people with experience would find my site and help me along the way.
The site wasn’t built to help others; it was there to help me. It was all about me. Of course, that’s far from the case these days.
So… you’re young and you’ve lots of property. How young? How much property?
Funny, these days I don’t feel young. I’m 25. Is that even considered “young” anymore? I think I started investing when I was 20. Maybe 21. It’s all a blur.
I don’t actually have many properties. I currently only have four in the UK and one in Dubai. I’m not what you’d call a high-rolling landlord. The most I’ve ever had at one point is five. But I’ve learned a lot, especially about being a landlord. The buying/selling process is so mundane to me. I do, however, plan on shopping this Christmas.
So how did you get the finances together to start building a portfolio?
I literally just worked and saved. There was no special formula. I wasn’t being a scrooge or anything; I still maintained a very healthy social life. But, I also saved each month.
I think at the age of 18 no one really thinks about saving for a house, most people just spunk their money up the wall on prostitutes and alcohol.
Continue reading, after the jump.
When I was 21 and told people I had two BTL’s, they seemed impressed by it. But it’s really not that impressive if you think about it. Most 18-yr-olds (the age I started saving) live with their parents; consequently they don’t have many financial outgoings. So if you’re in that position and have a regular full-time job, it’s not that difficult to save. But like I said, at the age of 18, who’s thinking beyond who they’d like to bone this weekend?
Don't assume that will necessarily change. Do you do any other work, or are you a full-time landlord?
I’m definitely not a full-time landlord - even though I probably could be if I wanted to. But that would involve a lot of being idle - and that’s just not me. What do full-time landlords even do with their time when they’re not counting pennies? I’ve always wondered.
I’m actually a web-developer, and I love it.
You’ve been pretty brutally outspoken about, I think, some of your tenants and, definitely, tenants in general. No guilt, not reticence, about what some people characterize as an unfair and exploitative system?
I’ve heard this grunt from people before. But I never understood how or why it’s considered “unfair” and “exploitative” - so I guess I can’t even answer the question if I don’t understand the reasoning behind those claims.
You clearly aim to provoke… so what’s been your most provocative blog post? What would you say made the most people most angry?
Ha, that’s easy. One day I was bored at work so I started flicking through the housepricecrash website. I go on there occasionally for comical value - nothing serious.
I must have read one of their traditional extremists’ forum threads, because I subconsciously started sketching a comic strip, displaying how erratic and crazy they are as a clan.
I decided to put the comic strip up on my site. Eventually it got discovered and it was pinned up in the HPC forum and on the HPC homepage. Man, it was like being on the front page of Digg. My site was getting pounded with traffic and hate mail. I just sat back and enjoyed it.
How’re you surviving the downturn? Have falling prices and changed loan-to-value ratios forced you to pump cash into any of your mortgages?
I’m coping just fine. I still find it bizarre that so many people thought the property boom was going to defy science by continually going up. I’m a long-term investor. I don’t plan on making big bucks with my investments in the next year, or even in the next five years. I plan on cashing out in ten years.
I consider myself to be a very safe player. I put down 25% deposits, and I only deal with repayment mortgages and high rental yields. I have one 3% mortgage and two mortgages that are below 1%. That’s thanks to the downturn.
If I changed all my mortgages to interest-only, I could actually make a decent return each month. But instead, I’m making overpayments on repayment mortgages with purely my rental income. I think that’s an unheard of strategy for a landlord.
I have enough equity in all my properties to remortgage tomorrow without pumping extra money into the cause.
Why does my method work? In 15yrs time, I probably won’t have a mortgage, and all I did was invest 25%.
I really don’t understand the mentality behind the “grab and run” landlords out there. Everyone was trying to expand their portfolio as quickly as possible like it was a competition. Releasing equity and/or applying for ridiculous 100% mortgages to fund the next project was never the answer. Whatever happened to buying something when you can actually afford it? And if you can’t afford it, don’t bloody buy it.
Would you recommend this business… (the landlord business, not the answering questions business)?
I wouldn’t recommend it, but I certainly wouldn’t discourage anyone from doing it.
Any words of advice?
Never invest for a quick exit - the probability for failure is a lot greater. Invest for the longterm. If you manage to get a window of opportunity to exit early, with a profit, that’s merely a bonus.
The key to a successful BTL career is getting the right mortgage. Most people just sit on the same mortgage deal - that is financial suicide. Shop around for better deals every few years - you could save thousands.
In the long run, you’ll make more money clearing debt than saving thousands in the bank. Make your money work as hard as possible.
Thanks, Landlord... that was fun.
I have been a prolific property investor since 2003 and I have bought 43 properties in the UK, Spain, Portugal, Florida and in the Carribbean. I have bought properties direct from developers, via estate agents, through property clubs and at auction. I quit my day job in 2007 to become a full-time property investor and coach.
The majority of my own property deals have turned out to be superb long-term investments, but I have also had my fair share of horror stories along the way. I go into these in great depth on the training.
The training I offer is based on my own personal experiences, both good and bad. You will learn from my mistakes and make sure that you don’t fall into the same traps.
Property investing is like a minefield, at the other of which is a lifestyle beyond your wildest dreams. My goal is to guide you through this minefield, so that you can achieve the lifestyle you deserve. www.ukpropertymentor.co.uk
