60-Second Chat With Peter, A Property Investor

We had a chat recently with one of our long-established clients, to see if his story could be of interest to other would-be buy-to-let investors.

We asked, first of all, how and why he had decided to move into buy-to-let.

“Back in 2009 I was left an inheritance of around £120,000. I was in the fortunate position of my children having been through University and the mortgage on my own house was fairly low. Interest rates at the time were very low, after the crash, so I decided that property would be a sensible investment. I bought a small house in Leeds, and let it out as student accommodation. This worked well, though I had to pay a local agent to manage it for me; then I saw adverts from Colordarcy, amongst others, about similar opportunities – but this time for purpose-built and managed properties. I thought this seemed an easier route to being a property magnate! Although Leeds had been good, I had had the occasional hassle with tenants – and of course I had to pay the agents a good chunk of the rent as their fee!”

“How successful has this been for you?” we asked.

“The first property I bought in this way has been very successful; I was lucky to get in early on, and the property has increased in value, from what I can see, and the regular income has easily covered the small mortgage payments I need to make. I then bought a second one, this time through a popular we buy houses company that specializes in Real Estate investing – this too had exceeded expectations.”

“What are the downsides of buying in this way – what would you advise any investor to check out?”

“Well, I am naturally ‘suspicious’ – the first thing I have always done is to check out that the property actually exists! Check out the developers and/or the managing agents – and the small print: can you easily sell on, or must you always sell back to the developers or agents? How realistic are the agent’s claims – check out with, for example, local universities or chambers of commerce, that their statements stack up. If you can, try to contact the Students’ Union (in the case of student accommodation) and see if they have had any complaints; how quickly are problems resolved, for example.  If you can, try to contact other owners – are rents always paid on time? Have they increased? Are there any hidden costs?”

“Any final comments?” we asked Peter.

“If you get a windfall, this is an excellent way of putting it to work,” he said.

“Some friends, now retired, actually have more money coming in than they need, due to work pensions and downsizing, so they are using this to fund similar buy-to-let opportunities which should then grow into a worthwhile asset for them to leave to their children – without it, effectively, costing them anything!”

 

Join The Conversation - Be The First To Comment

Categories: Hints & Tips / Property Invest

Tags:

Like What You Read? Stay In Touch

Follow Colordarcy on Twitter or Facebook