How did I start and the mistakes I made
Back in 2004 there was a lot of talk in the news about how your pension will probably not be good enough to keep you in the lifestyle you are accustomed to.
Well, that hasn’t changed in the last 21 years, it continues to make news every so often. When I heard this and read about it I decided that I must find a way to have a pension that will definitely keep me in a the lifestyle I want to live. I have to find something that would give me that.
Guess what I decided that would be ? Yes PROPERTY!!
I will buy a property that I can rent out and it will add income to the pension I receive, increasing the total I would have each month to live on when I want to retire.
Strangely enough I came across a guy who was looking for people to buy one of the 1st 12 flats that were being built in a town in Wiltshire called Trowbridge. He was offering anyone who committed to buying a discount of the market price if we put a deposit down to secure it before it was built.
Wow! I thought this is it lets do it . I went and met him looked at the nearly finished apartments and decided to buy one. In fact my parents had also being talking to him and they had decided to buy one too. Their circumstances were different to mine but non the less I thought hey , if they are buying one then I must be on the right track.
The plan was to buy the apartment and rent it out , there would be nothing to do to the apartment as it was all brand new and the rental market should be good there. Off I went and got myself a self certified mortgage. Back in 2004 you could get a mortgage by just saying you could afford the repayments.
So I bought the apartment and put it up for rent with a local letting agent.
It rented very quickly and after my 1st month I was looking forward to seeing the money come into my bank account.
Now, this is where the real learning happened!! The 1st month you rent with an agent you pay the agent a fee for setting everything up , marketing it, finding you a tenant, referencing them and then signing them up to a tenancy agreement. That cost more than I expected. Anyway I was still very optimistic that on month 2 I would start to make some money.
This is where I had another learning moment. Yes the rent came in from the agent after their percentage to manage (usually 8-12%) but after I paid the mortgage , paid the agents fees and the service charge and ground rent , both of which I had no idea were something I had to pay, I had lost £50 . Yes I was in negative £50 per month.
Now what kind of investment was that!!!
Not a very good one. This apartment was going to cost me £600 a year plus any maintenance or other landlord fees such as a gas boiler service etc.
I found the leaflet or did the leaflet find me!!!!
Right about this time is when. I discovered. Martin Roberts homes under the hammer On the BBC, I was absolutely fascinated by the programme and I loved watching the way that people could turn an old rundown property bought at auction into something amazing and provide a great environment, and a safe home for people to live in. So it really got my attention. I used to watch a lot of the episodes that came out and think, How does anyone ever do that? And by coincidence, or perhaps it was fate, who knows, there was a leaflet that came through my door that said, “How would you like to earn money from property and do it The right way?” On the leaflet was a picture of Martin Roberts in a bath full of money. Which was an Interesting sight, but never mind about the picture. It was exactly what I was looking for. I made an attempt to find out what it was all about called the number on the leaflet. I’m sure many of you come across these kind of events where you go along and you have a free couple of hours listening to some very inspirational stories, some very convincing stories and they absolutely motivate you. If that’s what you want to do to move forward, and that’s exactly where i was. The problem is I went with my wife at the time and she really wasn’t interested in doing it at all. I got very excited about the whole thing, really wanted to go for it and wanted to pay the deposit. Now there wasn’t a cost implication because if you purchased a seat on the course you were allowed to take along your Partner, Your wife, Your girlfriend, husband, Or even your business partner as part of the package so there was no extra cost. But she was adamant she didn’t want to go and that I should go, it’s something that I wanted to do so i did go on my own . This was actually the worst thing that could happen to me going on my own. It would have a knock on effect later on in my personal life. So if I learned anything from this, if I’m going to do something and I’m going to do something that’s passionate, I really do value and want the person who’s in my life to come with me and maybe understand what’s going on, even if they don’t do the whole course, but just to show some kind of interest in what I’m doing and listen to some of it, which she was not interested in at all.
I now run workshops that teach investors exactly what i have learned . If you want to attend one get in touch at neil@cleverpropertyinvesting.co.uk