Fancy being a landlord? Read our Q&A with Vanessa from Property Tribes
Thinking about becoming a buy to let landlord? Or need advice on managing an existing property? Property expert Vanessa Warwick shares her tips and helpful resources in our Q&A.
In 2004, Vanessa Warwick and her husband Nick Tadd started investing in property. And in 2009 they set up a forum to help educate landlords on their legal obligations, and promote best practice in the private rented sector.
Today, Property Tribes is the UK’s leading landlord community, helping landlords quickly access they information they need.
We asked Vanessa whether property was a wise business investment for mums, and what advice she had on buying and managing a successful buy to let property.
So whether you’re already a landlord, or considering venturing into the buy to let market, you’ll find plenty of wise advice, and useful links in our Q&A with Vanessa.
Why do you think property is a wise investment for mums?
I think investing in property is a good idea for mums for a number of reasons. First of all, it is business that you can run on your own terms, to your own timescales, from your own home.
It’s not a 9-5 business. If you opt for a fully managed service through a lettings agent, then your input can be fairly minimal. If set up correctly, it can be a relatively passive business, freeing up time to spend with children during those crucial and precious years when they grow up so quickly.
Secondly, I think it’s great for women to achieve their own financial independence, whether they are in a happy relationship or not. It can be a way to future-proof your life and could give a woman confidence to leave an unhappy relationship, knowing she has financial stability to stand on her own two feet.
Thirdly, property is very much a people business and this is something that ladies excel at, as they have compassion and empathy for tenants and also understand what makes a home where tenants would like to put down roots and stay for a long time.
Finally, there is a huge amount of support out there including sites like propertytribes.com and off-line networking events, where you can learn and grow and feel that you are not working in isolation. Property people love to talk and share and you can use other people’s hindsight as your foresight to avoid the pitfalls!
What tips do you have for buying a buy to let property?
My greatest tip is to find tenant demand before you go about creating the supply! Too many people create the supply and then hope that there is demand – a risky gamble.
Becoming an expert researcher and undertaking due diligence on every aspect of a property mitigates risk and significantly increases your returns. I always recommend investing for cash flow and yield, as this is money in your bank account month on month. Investing for capital growth is actually not investing at all; it is classified as speculation.
Investing for cash flow allows you to remain in the game long enough to benefit from any capital growth. You need to take a long-term view (15 to 20 years) if you are investing in standard single occupancy buy to let. (You can find out more about getting started by reading Top 10 Property Tribes discussions for novice investors.)
What’s the difference in buying a buy to let property and a home – how do you need to change your mindset when house hunting?
A buy to let property is a business and therefore you must be clear on the demand for your property and the type of tenant demographic it will attract.
I always say that ‘numbers never lie’ so you must make sure that a deal stacks up financially and that it will deliver a positive net cash flow each month.
I am very much of the school of thought that I should only buy properties that I would be prepared to live in myself! If I won’t live there, then why should I expect my tenants to? It’s a bit like Richard Branson refusing to fly on his own airline!
Many landlords will tell you that it’s just a brick box to make you money and you shouldn’t get emotional about it, but I don’t believe it is emotional to consider the needs of my clients (tenants).
I always put myself in my tenants’ shoes and think (for instance) “Would I feel comfortable walking home at night to this property?”. If the answer to that question is “No”, then I should not expect prospective female tenants to want to live there. Therefore, I have just decreased the number of tenants the property will appeal to by 50%!
My strategy is for the current market conditions would be to buy the worst house in the best street, and refurbish it and maintain it to a high standard. In my experience, this attracts good quality tenants, premium rents, and minimises void periods.
Back when I started investing in 2004, I purchased mainly new build properties as these are popular with tenants, are all done to building regulations, come with a 10 year NHBC guarantee, and are virtually maintenance-free for the first 5-8 years. I much prefer houses to flats.
I investigate each property fully and created my own checklist for people to use: Questions to ask at a property investment viewing. And these are the signs that would make me walk away from a property.
What are the big three mistakes buy to let landlords need to avoid?
My top three mistakes are:
- Lack of due diligence on any aspect of property, such as property deals, lettings agents, tenants, and suppliers of products and service. (See 100 questions every landlord ought to know to ask.)
- Buying a property that is a long way away from where you live. My advice is to buy within a 10-mile radius of your home.
- Failure to understand that you are starting a business. As a landlord you have to comply to over 100 Government statutes and regulations. It’s not a case of simply buying a property, putting a tenant in, and expecting a rent payment at the end of each month! You need to understand your legal obligations and provide your tenants with a safe and compliant home. If not, you could end up being heavily fined or even causing death – for instance if you do not have gas appliances checked professionally each year.
What questions do you need to ask when choosing a letting agent?
This is an important question as the lettings industry is largely unregulated and, as such, does attract rogues. You can read 12 questions I use to vet lettings agents here.
The main thing is only to let through an agent who is a member of an Ombudsman scheme, and who has committed to professional standards by voluntarily joining an accreditation scheme like Association of Residential Lettings Agents (ARLA) or National Approved Lettings Scheme (NALS). You can also look for the SAFEagent badge, which is a signpost to agents who have recognised client money protection in place.
How do you think recent tax changes for landlords will affect the buy to let market?
The recent tax changes are a game-changer and they affect prospective landlords and existing landlords alike, but in different ways.
It’s a complex topic and I would strongly recommend that landlords seek professional advice, such as speaking to professional advisors like Rental Income Tax Advisors. We also have a helpful thread on Property Tribes which explains far more than I can here and is a must read for any landlord.
This is not an issue where you can stick your head in the sand and hope that you will not be affected. You need to educate yourself as to what is happening and plan accordingly now.
How does Property Tribes help landlords?
Property Tribes is the UK’s leading landlord community and is designed to be the fastest interface between a landlord and the information they need. We discuss everything from standard buy to lets and holiday lets, to buying at auction, refurbishment and development.
Our discussions tease out the issues of the day, trending topics, and solve problems. We also bring the very latest property news and intelligence to help educate landlords and support them in making wise choices.
The forum is like a ‘hive mind’ of knowledge, experience, and contacts that landlords can leverage to learn and grow. This can help them avoid the pitfalls and accelerate their results. We advocate best practice and the creation of compliant and safe rental properties to ensure that tenants have a positive experience of the Private Rented Sector.
The forum is unique in that it is impartial, independent, and transparent. Many high profile property people are regular contributors including David Smith, landlord solicitor and Policy Director of the Residential Landlords Association, landlord and property author Angela Bryant, and Stephen Johnson, M.D. of Shawbrook Bank to name but a few.
We are also unique in that we have a YouTube channel where we film content of interest to landlords, including an interview with Talented Ladies!
If you need a property question answered, a problem solved, some inspiration, some motivation, some direction, or just input to help you gain confidence to move forwards, then Property Tribes is the place to go!
What other online resources do you recommend?
- The best source for property news is Property Industry Eye.
- For general thoughts and inspiration, I love Seth Godin’s blog.
- For property due diligence, I recommend postcodr.
- For property searches, you need to become a master of Rightmove and Zoopla – both sites also have helpful property blogs.
- The Telegraph also have some useful articles and resources for landlords, as do Homes and Property.
Want to ask your own questions about buying or managing a buy to let property? Visit Property Tribes.