Investing in property

Residential | 23/10/19  

In order to understand the Buy-to-let Market further we had the opportunity to meet with property investor Craig Williams who owns ” Ideal Location Property Limited” based in Chelmsford.

Craig’s first experience within property investment dates back 12 years ago when he purchased a 4 bedroom semi-detached house for himself to live in but quickly realised the house was too big for just himself. Craig decided to let the spare rooms out to friends,and it soon came apparent that’ this was a good business idea and from here Craig went on to purchase 12 HMOS and manage over 80 tenants within his 1st year, through buy-to-let mortgages.

You have over 12 years’ experience within property investment mostly within the HMO market. How did you first start out in property?

I suddenly spilt up with my partner and had to purchase a property of my own. I bought an ex-council 4 bedroom semi-detached house in Chelmsford. I decided to rent a few of the rooms out and it worked really well, it helped to pay the mortgage and it gave me some extra cash in my pocket so I decided to acquire a £25,000 bank loan in order to purchase my next house via a buy-to-let mortgage. I was currently working in the city at the time, I would have very long days traveling, working and then I would come home and attend viewings. My working days would amount to around 18 hours and it got to the point where I had so much of my own work to do, and that was my priority; that I ended up leaving my full-time job to work for myself.

How many properties do you currently have within your portfolio and how many tenants do you manage?

Currently I have 50 properties and manage 200 tenants within the Chelmsford area over both the residential and commercial sector. I have just purchased a large commercial building which provides 20,000sqft of office space very near Chelmsford town centre so I expect the number of tenants I have to increase quite significantly.

Since starting out what is the biggest success to date?

Buying the new commercial property in Chelmsford as this was a building I thought wasn’t achievable for me as the cost was within the millions and would be a considerable amount for me to invest in. However on a life-changing recent holiday to Necker Island I met Richard Branson and got to spend some time with him and after speaking he advised that it was time for me to step out of my comfort zone as anything that is easy is fine, and to do it, it’s your bread and butter, but the magic doesn’t happen until you step outside your comfort zone.

Have you had any failures and how did you overcome them?

I haven’t had many failures as such and I wish I would have had some drastic failures as it would show I am pushing myself to my limit. I haven’t had any big failures well within the financial sense. The biggest risk I have taken is buying a commercial property at auction without viewing it first; I went to the auction to buy a row of terrace houses but they went above the budget I had set. I didn’t want to walk away empty handed so I took a gamble on a commercial property which seemed to have potential. When I turned up at the property I walked through the door of the building to realise it had no roof and it was currently raining so you can imagine the state of the inside. Luckily I put the property back into another auction and pretty much made my money back. Besides from this, the only other regret I have is not employing the best people I could from the start i.e. accountants, property managers etc.

You currently manage a portfolio of properties, what top tips or top don’ts would you give to individuals wanting to become Landlords themselves?

Start off by seeking advice from experts i.e. Mortgage and tax advisors, and create a financial plan with a clear end goal in place, are you looking for long-term rental income or short-term capital growth? Consider which area you want to invest in and what kind of property you wish to purchase? Look at transport links, rail, road’s etc. schools, and university’s in the area, amenities and job offerings. This will help you to decide if this could be a good area to invest in and furthermore which tenant demographic you would be able to rent the property to, Families, professionals, couples. Think about the future, investing in regeneration areas could boost rental yields/ capital growth and future proof your investment. Speak to local letting’s agents in the area you are thinking of investing within. Property managers can manage the entire process at a fee which is always worth bearing in mind as there is a lot of legislation out there and more and more coming in to place each year. Do think about rental yield as this is an indicator as to whether your buy-to-let investment is financially viable. A typical yield is around 4-5% anything over this would be very good.

In regards to don’ts, learn from my mistake always view a property; don’t purchase a property that requires too much work or maintenance your budget will soon wither away. Make sure the property meets requirements and don’t cut any corners.

With the current tenant fee ban which came in to effect in June. Do you feel the ban has encouraged landlords to raise the rents they charge?

Yes, I feel they have to. Most agencies now pass the charges directly on to the Landlord which forces them to put up the rent in order to receive the charges back.

Do you believe now is still a good time to invest money into property with Brexit looming?

Brexit who knows, it remains a subject of uncertainty. All I can say is the UK remains a country with undersupply of property which is favourable to those who invest in property, a lack of supply but the demand is still present. There is always a chance that a no deal or unfavourable deal could result in a stall for the property market but taking into considerations the positive and negative trends the rental market has remained fairly resilient through times of uncertainty.