The Christmas shopping has been completed early this year First time ever. A PS5 for the kids, new clothes, a pricey handbag and the promise of a half-term skiing trip (Omicron-allowing) for my wife and last but not least a tidy little 3-bedroom end of terrace for me. Bought out of probate, it’s taken a while to go through, but here we are mid-December and I’m trying to get my refurb team out of the pub, prizing pints out of their hands and replacing them with paintbrushes. The timing isn’t the best but sometimes you’ve just got to roll with it. No pun intended.
Profit
Sure, it needs a new bathroom suite and the aluminium windows have seen better days (summer of 1970) but they’ll be replaced. On the plus side, the combi boiler (Worcester Bosch - nice) is brand new and the kitchen was replaced not more than a couple of years ago, although it’s basic and could do with a few bells and whistles to bring it up to my standards.
Once Quick Flick Les, my painter, has whitewashed the living daylights out it and Craig Davies (always sung to the tune of Craaaaig Dav-id!) fits the standard-issue Cottle-grey carpets and Moroccan style linos, it’ll be the sharpest pad on the row, and a mint new 2022 home for the lucky early bird who fits my exacting standards in a prospective tenant. Three prospects are already hunting me down for a viewing – ‘I haven’t got the keys yet, but when I do, I’ll call you first!’ Call me cynical but Divorce Day is after all, just around the corner and the phone always overheats during that week. I smell profit.
All in I’ve laid aside ten grand for the refurbishment, and I should get enough change to pay for New Year’s Eve. The mortgage funds are being advanced at a rate of 2.79% by the good people at Precise Mortgages so I know I’m in good hands. This little beauty of a pad will rent for £1,000 a month, maybe more with the January winds blowing in the right direction. There’s more than £650 a month profit in the post from this one. Doesn’t sound much? Remember, that’s month in month out forever, inflation-proof. Not to mention the capital appreciation (15.4% in Wales over the last 12 months - just saying, wink emoji).
Truth be told, this place should have completed a month ago and the refurb should be nearing its end right now, but probate is what it is and so here we are. In any case, I agreed a very reasonable price on it four, yes four, months ago and it’s already worth £20,000 more today. All in all, 2021 has had both low and high points for me, as I’m sure it has you. But my property buying plans have been almost on point this year and although I’m a little behind my lofty 2021 target, I’m as close to it as I could realistically expect to be.
2022 is well in my sights and two half promises of off-the-market transactions are currently being worked on. This will see me through till March, maybe April. Estate agents love an investor with a good track record who’ll pay a fair price without having to go to the hassle and cost of actually marketing it. As an investor, buying it before it goes to market is music to our ears, but it’s imperative that the sale completes smoothly or else those precious early calls won’t come again.
As for the rest of the year, well I don’t know what will come up yet. I have my eye on a few hangers-on, the ones that have been on Rightmove longer than they should have. These are the ugly ducklings that may need a little extra Max Factor at the outset but will be the stars of the street once they have had ‘the treatment’. They are the ones that will get nipped for a lower price, but those savings can be used to make an impact that will see their capital growth rise through the ranks of the portfolio with new confidence.
New Year, New You
If you’re planning to get onto the rental property ladder next year then now is the time you should be thinking about it. Do yourself a favour and set yourself that goal. Why now? Because there is no time like the present, and next year is a couple of Christmas parties and a few bottles of champagne away. You don’t want to get halfway through January and still haven’t given it any thought. That’s a guaranteed way of ensuring that it’ll be the second quarter before you actually do something about it, and quarter three by the time you get your keys. Much too late in the day. You’ll have grey hair and be smoking a pipe by the time you make a penny.
Even if you’re not in a financial position to buy for another 3 months, it’s a good time to look and get your offers in before Christmas. It’ll take 3 months for anything to go through anyway. Silly season is a good time to go house-hunting because most people are distracted by the festivities and the market is less fluid leaving vendors open to lower offers.
The Goal
Set yourself a realistic goal and try to stick to it. ‘I will secure a property purchase by 15 January’, for example. I’m not trying to teach you to suck eggs but if you are serious about investing in property then you need to make your move – now. ‘The Goal’ for me was being able to generate sufficient income from property to cover all my living expenses and have enough left over to (pay my family’s Amazon bill) enjoy a reasonable lifestyle, without having to exchange my time for income.
Don’t get too starry-eyed though, it didn’t happen overnight. It took 20 years, and an incredible amount of willpower to say no to some of the finer things in life (sometimes I gave in of course) to ensure The Goal was met. It’s important to get your significant other to buy into The Goal with you, or else you’ll be flogging a dead horse. If they are the type that prefers to flex the plastic while sipping vintage Krug for breakfast, you may want to consider your options (or your partner) before you start out.
You’ll need as much capital as you can lay your hands on, so those who insist on the high life using your funds won’t fit with your plans. On the few occasions in my life where I’ve had large chunks of capital sloshing about, I’ve tried as quickly as I can to acquire property or shares with it, so that as little as possible gets frittered away on Prada loafers and helicopter rides.
The Yellow Brick Road
My Goal wasn’t always the same, initially, it was about supplementing my income and creating a future nest egg for some far-off time in the future (which for me is now). Then as a few more properties were acquired, The Goal became about generating enough cash each year to self-fund an additional property. As time went on, I started buying more frequently by drawing down equity in some of the existing properties and adding my own funds along the way. The Goal changed slightly in recent years as I neared the tipping point of financial sustainability.
The buying became more frantic. When I could see that the seemingly elusive target of self-sufficiency was finally in sight, I understood what it must have felt like for Dorothy, and her sidekicks as they made the final approach to the gates of the Emerald City, after their long and torturous journey along the yellow brick road.
Keeping it short and sweet (there are Christmas parties to get to, you know) get yourself on Rightmove today and start favouriting some potential rental properties. Make that move before the New Year begins. There won’t be a boxing day or January blue cross sale, but you will thank me for it in the future, that’s a guarantee.
Merry Christmas.
