MY RULES OF PROPERTY INVESTING

  

1. Never buy a house I wouldn’t live in myself

A nice simple self-explanatory rule to start with!

With all my houses, even the ones in the less popular areas of the city, I would still be content to live in them myself if I had to. Because if I’m not prepared to live in the homes I’ve created, why should I expect anybody else to?

If the street or area is rough and ropy or unsafe, or the house is not refurbished well enough, then it’s not suitable for customers / tenants / people. And if I think it’s not good enough for me, it’s not good enough for others either.

 

2. Only buy houses within 20 minutes from my front door

I’m Leeds born and bred, and have lived here all my life. Whilst I can understand the appeal that some other investors have about buying property in different areas all over the country, that’s just not for me.

My goal was always to provide local homes for local people in my home town.

And because my houses are relatively close, I can visit them easily, or get there quickly if there’s an emergency to deal with.

 

3. Ensure the property cashflows a minimum £250 net profit from the rent per month

From a monetary business aspect, each house must create positive cashflow every month after the mortgage has been paid.

 

It astounds me to hear of landlords where the rental income only just covers the property’s buy-to-let mortgage.

Or even worse - the mortgage is more than the rent, so the landlord is effectively paying for a tenant to live there!

Make sure you make money from each property, or you may end up in debt, stress, and trouble.

Another key property business mistake to avoid is this: don’t get too emotionally attached to the houses either - it’s a business, so they are effectively just boxes that you make money from. As long as you maintain and look after your boxes and their contents (people included!) all should be well.

4. Have the potential to add at least £25k to the end value

Buying houses below market value is not always easy. But that’s the way my business model works. I’ve got to be able to uplift the value via refurbishment to be able to pull out mine and my investors’ money when the property is revalued, after all the work is complete. So you need to be realistic when checking end values and ceiling prices of the rest of the comparable houses nearby.

Be cautious when researching likely end property values, so take your cheerful rose-tinted glasses off!

Here’s one of the very few places in life where it’s better to be cautiously pessimistic / realistic in the financial figures rather than overly optimistic.

5. Don’t deal with dickheads

There’s no other way to phrase this nicely.

Some people will just cause you chaos, stress, anxiety, and cost you time, money, effect and energy.

There’s lots of lovely people, tenants, contractors, and professionals around…So we don’t need to waste our time with unscrupulous and unsuitable people who just do not respect us.

They may be rude or disrespectful or patronising to you, not do as good a job as they promised, trash your house, lie to you, and generally cause you a headache. The key is being able to spot these types of people before you engage with them.

Which leads us to…

6. Use your gut instinct when working with other people

Spotting genuinely good people from those who just pretend to be, is difficult.

I’ve had a plasterer that promised me he was awesome - then walked off the job because he couldn’t get his plaster to stick to the ceiling.

I’ve had a HMO tenant be such a charming manipulative liar that he lied to my face with ease - only to then stop paying rent, and become an avoidant problematic bullshitter.

I’ve had a tenant wanting a fresh start of stability from her chaotic past and provide a secure home for her children - only to repeat her same mistakes, get involved with drugs and violent boyfriends and utterly trash my house and abscond leaving a horrendous and expensive mess for me to deal with.

The common factor in these, and every case I’ve had which has turned out badly, is that every time, I had a niggling feeling in my gut that something wasn’t right about these people.

But I chose to ignore that uncertainty I felt and gave them a chance anyway, because I try to be nice like that, and trust that they won’t let me down with their chance.

I don’t do that anymore.

If my gut instinct tells me something isn’t right about something or someone - I believe it.

 

7. A void is better than a headache

Following on from my last point, if your gut instinct tells you someone will not make a suitable tenant in your property, wait until you find one that is.

There’s plenty of people around needing housing, so we shouldn’t be so desperate to grasp rental money that we end up putting someone unsuitable in our properties.

Not only because if / when it all goes wrong, it’s then very difficult to get rid of them, especially if you have to go down the costly eviction route.

Do stringent checks on your potential tenants, and if someone’s not right or you just don’t get a good feeling about them, say no.

It really is better to have a void than a headache.

I’ve left rooms and properties empty for weeks and weeks sometimes, because I haven’t been totally happy about potential tenants that have viewed them.

The right tenant is worth waiting for.

You’re looking for long term stability and reliability in your tenants, not just filling your wallet with short term cash.

 

8. Avoid false economy during refurbishments

It may seem like a good idea at the time, not doing certain things during refurbishments to save time or money - but it is false economy in the long run.

Examples I have made like this which taught me this lesson include:

⁃ Not putting radiators in kitchens. Only to then later have to retrofit electric heaters.

⁃ Not replacing the old gutters at the same time as having a new roof done. Only to then have to replace them a few years later - and the majority of the cost was having to put scaffolding up again.

⁃ Buying cheap poor quality boilers - only to then have to replace them way before the usual boiler lifespan because they went kaput.

Better to do big jobs all at once during the refurb, rather than kicking the can down the road to have to deal with at a later time - and likely with more expensive retrofitting or replacement costs.

 

9. Be a good person

Unfortunately there are a lot of wretches in this industry.

They talk a good game, give a nice winning smile, extort money from people… only to then do them wrong or rip them off for vast amounts of money. Eventually though, all these wretches get found out, and rightly so.

Because it’s not enough to just PRETEND to be a good person - you’ve got to actually BE a good person.

And that means caring about other people, rather than taking advantage of them for your own selfish needs.

So be understanding when your tenant is genuinely struggling.

Pay your contractors’ invoice swiftly when they have already completed the work for you.

Repay your investors in full and on time - and if there’s a problem, be open and honest about it, and work hard to get it resolved.

Things do sometimes go wrong - in projects and in life - but radio silence and lack of communication just causes mistrust and makes things worse.

My final thought on this topic is one personal life rule I live by:

Don’t ever say anything or do anything or behave in a way that would make your favourite grandma ashamed of you.

Your Nanna and your conscience are watching - so don’t let them down, and do yourself proud.

 

10. Have great integrity and do what you say you will do

Last one, which is a nice follow on from the previous rule.

It surprises and appals me how many people in life don’t actually do what they say they will do. I think if you do have great integrity, you really are in the minority of people.

You wouldn’t believe the amount of people I book tenancy viewings or meetings for, who don’t even turn up.

They don’t appear, they don’t call, they don’t do the thing they agreed to. It tells me a lot about that person.

And an unreliable, untrustworthy, flaky person of poor integrity is not the sort of reputation you want other people to have about you.

Having great integrity is always doing the right thing - even when no one is watching.

 

So those are my own personal ten rules of property investing - and as you’ve seen, it’s not just about the tangible bricks and mortar aspect of it!

Best of luck with building your own property portfolio, because it’s not easy.

Because if it was, everyone would do it…

Wouldn’t they…?!?

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Kellyann Martin is a UK-based property investor.

She has a book available for purchase on Amazon, click here to buy:

STARTING OUT IN PROPERTY...: What I Wish I'd Known At The Beginning! : Martin, Kellyann: Amazon.co.uk: Books

What I’ve Learnt from my House Getting Trashed

What I’ve Learnt from my House Getting Trashed

 

You might have seen on social media over the last couple of months that a tenant left one of my rental houses in a horrific state.

 

Despite the tenant only being in the property two years, and the first/only tenant since it was all newly refurbished, poor choices meant things spiralled out of control in their life, and the property suffered badly because of this deterioration.

 

This included: trashed and ruined carpets throughout, broken kitchen units, smashed windows, a kicked-in door, damage to the walls and electrical sockets, a garage filled with illegal waste removal items, plus a couple of tons of asbestos dumped on the drive.

 

I was left to deal with all this, along with the disposal of all the furniture, rubbish and items left in the house, which had been abandoned. Oh and I nearly forgot to mention getting rid of the cannabis farm that had been set up in the loft.

 

Deep joy, eh?

 

It took several months and many thousands of pounds to get it back to a lettable state. It caused me stress, headaches, drama, worry, sleepless nights, and money.

 

But still, I’m a strong believer in karma, so I’m not too worried about those people getting justice. Everyone gets exactly what they deserve in life; whether that’s good or bad is down to them!

 

And writing this blog is almost cathartic – because if we don’t learn anything from the harsh unpleasantries in life, we are destined to repeat our mistakes until we do learn the lesson!

So here we go:

 

Five things I’ve learned from my house getting trashed:

 1. Some people just don’t behave themselves.

No matter how nice or helpful or trusting you are of some people… some people just don’t give a shit about how much time, effort or money you’ve put into a property. It’s not theirs, so they’re not bothered if it gets trashed.

If you get an initial unusually cautious feeling in your stomach when meeting them… even if it’s only a teeny tiny gut reaction… listen to it, and don’t let your empathy in wanting to help someone overrule the concerns.

Even pink flags are closer to red flags than white ones!

So check, but verify.

Especially if you get *that* feeling, no matter how minute.

2. The council doesn’t give a shit about you.

Don’t think for a second the council want to help you as a private landlord.

They don’t.

And even if they say they do, they drag their feet, and you have to chase them for weeks and weeks to get them to do the thing they’re are supposed to do.

There was only one lady at the council I was impressed with during all this fiasco, and she didn’t even work in any of the departments for housing, lettings, tenants or social services, but the environmental waste team. She worked harder than all the other civil servants I dealt with put together, and this issue wasn’t even her remit.

Also, the council actually provided me with this tenant to begin with, under a housing private landlord letting scheme. Let me be clear about why they do this: not only because they have a shortage of houses, but sometimes they are actually glad to have problem people off their books and onto yours. They are glad to have washed their hands of certain tenants, because now they become your problem, not theirs.

The insurance loss adjustor man told me this, which leads me onto our next point…

 

3. The insurance company doesn’t give a shit about you.

Listen carefully: Insurance loss adjustors are not your friend.

They might come and assess your house damage and smile and say nice reassuring things and pretend to be helpful, but they are not on your side. They are there to mitigate their loss.

In fact here’s an industry secret, told to me by an insurance broker: many loss adjustors actually get a bonus if they can manage to reduce your claim. ie – they get monetary bonuses for you not getting money from the insurance. That’s a sly little secret they keep quiet, isn’t it?!

 

Thus, my claim for malicious damage was pooh-poohed away as ‘tenant lifestyle choices’ and ‘wear and tear’, despite photographic evidence to the contrary. Oh, and if need be, they also pull out about a million tiny clauses from your policy, meaning unless you can manage pull some particular minute obscure piece of evidence out of your arse, the claim ‘cannot proceed without it’. ie: you get nothing.

 

4. People are wretches when a house is empty.

Fun and games whilst the property is empty sometimes… not all neighbours are nice ones. Apart from the asbestos dumping the tenant allowed, other lovely people also took the opportunity of an empty property to fly tip the drive. Several times.

 

One person lovingly handballed black bags of rubbish all the way to the front door’s path, and a horrible landlord developer decided to offload all their property refurbishment waste of rubble and plasterboard onto my land. Wretches.

 

Oh and then local naughty kids/teenagers set fire to said rubbish in the garden, meaning two nights running the fire brigade had to be called out to put out the arson fires… whilst hooded teenagers watched them undo their incendiary work. Lovely, eh?

This is what I did: asked the police to patrol the area more often. Allowed the council to put up a warning notice flytipping / CCTV sign. Locked the gate with a bike lock to deter more reversing vehicle flytips.

This is what I should have done: Put the actual camera up, fast. Get a timer switch much earlier so the lamps inside went on to make it look occupied at night. Got the mess of the trashed house sorted out quicker, and filled the house quicker.

Still, we live and learn; every day’s a school day, eh?

And sometimes no matter what you do, certain people will always behave like scumbags.

5. Don’t become jaded because of one bad experience, and continue to give people chances.

Final lesson… listen: one bad tenant does not mean all tenants are bad. In fact, since starting landlording in 2008, that’s the worst tenant experience I’ve had in all that time, so that’s not bad going in 14 years.

Statistically it had to happen at some point!

We can move past it now and just call it what it was: a bad time in the business.

Sometimes bad things happen so that better things can occur instead.

In this case, a new and very lovely tenant. In fact there were three lovely families who viewed the property on the same day that I would gladly have housed, all pleasant, polite, family-orientated, and genuinely nice and good people in need of accommodation.

I have a favourite phrase: don’t bleed all over someone who didn’t cut you.

This means you shouldn’t take things out on people when they didn’t cause you the distress in the first place. It’s not fair to them to do that.

Thus, a new tenant, a fresh start, with the same positive hopeful attitude towards them that all my new occupiers get.

We cannot tar all tenants with the same brush. I have many other lovely long-term tenants that always do the right thing, and for that I am very grateful.

So a snippet of bad luck, a stressful, horrendously difficult and unpleasant time, but now it’s time to learn from it and move onwards and upwards for the future.

I do hope you never have to go through such chaos, but at least we’ve learnt some lessons if you do.

And remember, when bad things happen, remind yourself: I’m too stubborn to let this take me down!

Thanks for reading, and my very best wishes,

Kellyann x x x

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Kellyann Martin is a UK-based property investor.

She has a book available for purchase on Amazon, click here to buy:

STARTING OUT IN PROPERTY...: What I Wish I'd Known At The Beginning! : Martin, Kellyann: Amazon.co.uk: Books

FAIR PRICE OR A FLEECING?

FAIR PRICE OR A FLEECING?

CHRISTMAS – WEDDING – NEW YEAR’S EVE – LANDLORD

What do all these words have in common?



I’ll tell you: they make the sellers bump up the price of items and services unnecessarily!



I’ve seen it today in the local shopping centre. We’re a few days before Christmas and shoppers were falling over themselves to buy, in short, utter tat. Christmas presents items such as soap sets, make up, aftershaves, tacky toys, novelty gifts etc. 

It’s always baffled me why the price of these goods massively increases just because the manufacturers have boxed them up in jazzy snazzy festive boxes aimed for the Christmas market. 


Look at the actual products inside people: you’re not telling me it’s worth the bumped-up value just because it’s in a nice glittery box?!



Ditto New Year’s Eve – where many pubs, free for 364 days of the year, now sell you tickets on the door just to let you in to buy their beverages – what’s all that about?!



And as for the word ‘wedding’ – ooof, it’s a free reign licence to sting you!



But my gripe today is when contractors bump up the price of a job just because they hear the word LANDLORD.

There is some bizarre assumption by the world as a whole that most landlords are super rich, greedy money-grabbing fatcats.


I am not most landlords. 


And although I acknowledge that there are some people in property world exactly like that, in my experience, most of the property landlords I know locally are just hard working people doing their best to provide a service, and they’re not super-wealthy. 


Even though we’d like to be!!


But sadly, this urban myth remains prevalent amongst contractors, who persist in giving you ridiculously-prices for services, just because they know you’re a landlord.



I have this running joke, when my friends and other people say “Oh, you must be rich, you’ve got all these houses!”


To which I reply “I’m not rich, BECAUSE I’ve got all these houses!”


Boilers don’t fix themselves you know! All maintenance and repairs works must be paid for – and sadly the Maintenance Monster rears its head in rental properties way too often for my liking!

Now when I talk about fair prices or fleecing, this is not about me being super tight, or mean, or pennypinching (oh ok, I am a bit, I’m Yorkshire, but we all are up here!)


I’m not saying that contractors aren’t worth their price. 


Some definitely are - and they’ll know I appreciate their good work and fair fees because I’m loyal; if they look after me, I’ll use their services again and again.


Several times recently I have had discussions with contractors, where they were nice guys, I liked them and wanted to give them the business – but then they went and gave me a stupid quote.


And then things get awkward when you have to tell them: ‘OWWWW MUCH?!?! That’s double what I’ve ever paid before, sorry, but you’re not getting the job.

I know people still need to make a profit, and they’ve got their own business to run and their own families to feed. 


I get that.


But I also know what things are worth, because of my experience and prices I’ve paid for things before.


Yes, I might be a landlord, but I’m not a gullible moron who wants to set fire to my money just because you’re greedy.


So yes, sadly, I do find it difficult to undergo any refurbishment work from fair people for a fair price. Add into the mix that I’m female and the amount of piss-taking pricing and patronising doubles. 


(Don’t believe me? Ask any other female property investor!)


I just want a good job done by good guys in a decent timescale for a fair price - without being ripped off – is that too much to ask?!!

It’s sheep that follow someone blindly and end up getting fleeced – so you need a fair price, not a fleecing.


Here’s a couple of tips when looking for contractors to do work:

1.   Find some local firms who provide the service you need. Meeting them in person is good, such as at networking meetings, or ask for referrals from people you know who have used their services.

2.   Check them out online, look at their social media, examples of work, testimonials.

3.   Arrange for each of your shortlisted contractors to come and do a site visit. Not all at the same time though!

Ps - some of these contractors won’t even turn up.

I’m not joking…

If they don’t even ring you to explain with a genuine excuse for their absence, remove them from your list. 

4.   Bear in mind their attitude, personality and demeanour on the site visit.

If you hate them automatically, your gut instinct is giving you a stark warning to avoid avoid avoid!

Like the recent patronising guy who kept calling me ‘flower’… Imagine the drama I’d have had getting him to do what I needed without a load of hassle and fuss?!

5.   Await quotes. This can be anything from 2 hours to never.

Yes really. Some people you will never hear from again.

I’m still waiting for a quote from a guy 18 months ago who spent two hours travelling and pricing up a job!

(Makes interesting fun seeing him dance about to avoid me when he attends the same networking meeting…

…hey, maybe he just decided he hates me, and that’s ok too!)

6.   Assess all the quotes for the best. This might not necessarily be the cheapest.

Stupid quotes can also be removed at this point.

In my head, that’s basically the contractor saying: “I don’t like you, I don’t want to work with you, so I’m going to rip you off”. 
So that’s those guys doing you a favour, they’ve heard the word LANDLORD and those pounds signs starting flashing in their eyes. 
Not today, and not with me, my friend!

7.   Pick your favourite contractor with their fair quote.

Book them in for the job. Ideally, it’s someone you know, like and trust.

8.   Let them do the job! 

Oversee their work, address any queries that arise, but no need to micromanage. They’re competent experts, not schoolkid apprentices.

9.   I’m going to add this in, as it seems to be a rising problem for contractors…

Once they’ve done their job to a great standard – pay them!!! There’s been a horrendous rise lately in service providers not being paid for the work they’ve done, or people withholding their payment for ages - and that’s simply not fair.

If they’ve done you a great job, delivered what you asked, why would you not pay them immediately?

And if you can’t afford to do that, then you shouldn’t be booking them in for work until you can. *RANT OVER!

10.               Appreciate their efforts. Make sure they know you’re thankful for their super work. Leave them online testimonials. Refer them to other people you know. Use their services over and over again.

So there we have it… we all love a fair price, but we hate a fleecing!



And yes, for the record, I am a Libra starsign – the sign of the justice scales, of fairness and equality – so woe betide anyone who tries to upset that balance!



Have a super Christmas and a very happy new year!



Kellyann x x x