Hey readers, we’ve got a real treat for you today. The founder of Windsor Enterprises, writer of the Archant group’s business advice column, and all round good guy, Ryan Windsor sat down with us and discussed his journey from high-school drop out to achieving financial freedom.
His route to financial freedom was through property, and in today’s interview he reveals; how to minimise properties laying fallow, finding good tradesmen, how to deal with the “Landlord doom” tax, and how to be an ethical landlord.
A recent piece about you in the Telegraph stated that you’ve only had a two week void period in all eight years of owning property! How on earth did you manage that, and what advice do you have for other landlords on minimising down time?
Hi Nate, Thanks for having me on your site!
I often wonder myself how I managed this!
To be honest I lucked out, there is a high demand in my area, and a low supply of rental properties. On top of this is the high quality conditions I let my properties out in, and the tenant centric care I provide.
I meet with all my tenants individually at least once a month to speak to them and sort out any issues. Even if these issues cost me, it highlights I care and improves the Landlord / Tenant(s) relationship that I believe is the key to my low void periods.
I take pride in the properties I let and the service offered, I think of my business as a mini Citizen Advice Bureau (CAB). All my tenants are migrant workers whose families live in a close-knit community, so I get a lot of referrals.
Despite the other Landlords and properties available (some cheaper and larger) most of my tenants appreciate how I operate, and they often stay for four or more years. When they do move their friends move in straight away.
In the same piece you advise landlords to find a good team of tradesmen, what are the three qualities that you look for in those looking to join your team?
Nate, this is so important. You need a great team of tradesmen that you can trust to do a good job on time, and for a reasonable price. You need someone that wants to work with you to build your investment income.
My top three qualities to look for in your tradesmen are;
It’s taken me a while to find my “Power Team” of tradesmen but I’m so thankful for them. My ability to trust and rely on them to do the job when they say they will keeps my business ticking, my tenants happy, and raises my reputation, as I can get most issues sorted quickly.
Finding someone who takes pride in their work is rare. Normally I find tradesmen take on too much work, and rush the job. This means I have to get them back for more work, or find someone else, to rectify the problem.
When you have quality workmanship it saves you money and time and reduces stress for you and your tenants.
Wants to work for you and build your investments
Finally, you need to find tradesmen that see this professional relationship as a long term arrangement. As such, they give it their all to provide you with the best service, fair prices and often go that extra mile to help you out.
I’ve got a great relationship with my team. They come out at a moment’s notice for no extra charge, they advise me on best practice and how to maximise my HMO investments regarding room configuration.
They even tell me about deals that are coming up, as they know if I do well their business will grow.
Once you find your team look after them! Pay the full amount early if the completed work is to a high standard. Recommend them to your friends, they will appreciate the support and start to value you more, often prioritising you and your maintenance work before others.
There’s a lot of buzz recently about the government’s planned changes to how landlords are taxed, how are you planning on dealing with those changes and what should other landlords look to do protect their revenue streams?
The changes didn’t come as a shock to me. Look at other industries and all you see is increased regulation, legislation, and more tax.
Property investment is no different. You’ve got to build your portfolio on the mantra of sustainability and longevity.
Get your books in order and make sure you are the most tax efficient you can be now! I stress test my portfolio and only remortage if there is a Below Market Value deal (BVM) that I cannot afford to invest in.
As I said before this is a long term investment vehicle and I don’t want to be too risky with the money I’ve worked so hard to earn.
Finally, with the “generation rent” phenomenon many are struggling with the ethics of owning a lot of property. What’s your position on the issue, and what mindset should people have when becoming a landlord?
There is, and always will be, a lot of negativity around Landlords and investment property. Owning property is part of the UK’s culture, but as you point out, many people cannot afford to buy their own home (let alone purchase an investment property!).
This difference in wealth has created a divide in society that’s getting larger.
So should we all just stop investing in property?
Of course not. What we should do is promote the fact that not all Landlords are the typical “slumlords”. More and more landlords are providing excellent care and services to their properties and tenants.
More and more are seeing their property portfolio as a long term investment, not just a get rich quick scheme.
Those looking to become a Landlord need to know that it’s a massive responsibility that should not be taken lightly. But! The benefits for you and your stakeholders can be massive and positive.
Think long term, make sure you know your market and do your research, cover your back and stress test the investment… then stress test some more.
Go above and beyond the legal regulations, seek out the experts, and become tenant-centric. This will ensure that everything you do, you do it with the tenants and businesses best interests in mind.
Huge thanks to Ryan for chatting with us, if you need any advice with managing your properties you can reach him on Twitter @Rywindsor89or connect with him on LinkedIn
If you got a lot out of this article, please share it with your friends and colleagues using the social media links. You may also enjoy the following interviews and articles.
Disclaimer: This article is not suggesting you skip the small print on letting agreements. This article is merely highlighting the most important terms to check on a letting agreement.
Does anyone else hate reading the small print on important documents?
Cool. Does anyone actually read the small print on important documents?
*The crowd goes silent, accept for those analytical types*
I mock you but really I am jealous of your due diligence and focus.
Secret confession #1: When given a contract, my eyes wash over the text and absorb nothing. I know I should read it but it’s easier to lie to myself and say “Don’t worry brain, these are good people and this is a standard contract. Just skip to the end and sign.” So that’s what I do.
Secret confession #2: When asked by a member of my team if I read the small print, I flat out lie “Umm YEAH… of course I did. Ok, well, I better go now. Lots of work to do, so bye!” And I run away fast!
Skip forward 3 weeks. “Jess, why has only £775 gone into our bank instead of £1175?” Errrrrrr, let me check the ASTs (Assured shorthold tenancy) that had been sent in the post a week ago… Shit. Bollocks. Shit. Everything has broken and it’s all my fault.
Based on my errors (of which there are plenty), I bring you, The dumber-than-dummies guide to letting agreements. The key terms you MUST you read in the small print before signing.
1. Check the rental amount you have agreed
This is going to sound stupid.
The first letting agreement I ever signed I did not realise the rent amount was meant to be written on it. Because I did not know this, I did not realise the letting agent had left it blank.
A few weeks later, once the property was tenanted and the rent amount had come into the bank I was horrified at the amount transferred. It wasn’t even market value.
2. Check the letting fee
Letting fees are always negotiable. After a long drawn out negotiation with the letting manager a lower letting fee was agreed. I even followed it up in writing. When signing the contract [with the lettings assistant] I noticed the letting fee and explained that the letting manager and I had negotiated something different. This person said, “OK, just sign the contract anyway and he will deal with it.” There goes little naive me saying “Ok. That sounds great.” as I signed the contract from la la land.
When this letting agent sent me the funds with the letting fee deducted I was not happy. I queried it and his response ‘I have looked at the management agreement you signed and the letting fee is 65%. I attach herewith a copy detailing the fee.”
Cheeky f*****. He full well knew what we agreed. Especially as we made a big point about it!
Clearly a man with no integrity; but that is not my issue. My issue is my lack of assertiveness and naivety.
Now if something has been negotiated, I don’t bother questioning it on the contract. I go straight ahead and amend it myself. This is my business, my money, my contract. If they don’t want to keep up their side of the negotiation, fine. I know what they are like and it is my choice if we do business again.
3. Check your package
I wish I was suggesting you grope yourself in a letting agency, unfortunately I am not. Check whether they have assumed you want the fully management package or let only. If fully managed, what are the exit fees? Luckily this was the one thing I did double check. Some dickheads agents try and get away with whatever they can. Even if you had told them you want ‘Let only’, they may have ticked the Full Management box ‘by accident’. Just be careful and double check this.
Before you sign any letting or management agreement make sure you check all the percentages and fees (including exit fees). Once you have scanned the agreement for the percentages and fees, ask the agent to point out all the fees too, in case you missed any.
Check the rental amount (MAKE SURE THIS IS WRITTEN ON THE AGREEMENT)
Check the letting fee
Check your package
If you enjoyed reading this blog and want to help someone else with my dumb stories/learning curves, please share this with someone who’ll enjoy this.
Here are some more mistakes I’ve made so you don’t have to:
There are many articles and advice columns on how to maximise your mystical credit score yet few of them deal with the psychology of how credit-worthiness is assessed. This was something that fascinated me the first time I was rejected for a mortgage (while the second rejection, coming directly after the first rejection, evoked emotions a little stronger than fascination).
A great proportion of landlords and first-time buyers have good stable jobs and buy property as an investment. Many of them are buying for the first time. Many of them believe that having a “clean” record of credit is enough to make them attractive to a lender and secure that mortgage.
Many of them don’t have a credit card or only sparingly use one thinking that this shows responsibility with credit. Many of them believe they are financially savvy by swapping and changing bank accounts or phone providers securing the best cashback deals or other incentives.
They are wrong!
How can that be, you ask? How can someone, on a very good salary, with great career prospects, who uses mainly debit cards and has never missed a payment in their life be rejected for credit while a person who is on an inferior salary, has never been promoted, has worked in the same office all their career, has three credit cards, and still lives with Mum is welcomed with open arms by the same bank for the same mortgage?
The answer is in what’s called an algorithm. Almost every mainstream lending decision today is decided by a computer using an algorithm. In fact, many mortgages are applied for, processed, assessed, and provisionally given without a single pair of human eyes even glancing at the application.
Do you give good algorithm?
An algorithm does not make value judgements. It does not care that your CV is exceptional. It does not care that you have had a wide variety of positions and had the good fortune to be promoted and relocated for your very impressive job.
Instead, it assesses you purely on data that you submit and if that data matches the data that it has been programmed to match you with. In each area, it simply assesses whether you comply or not and gives a weighted score. An algorithm is a process that is concerned only with cold, hard, unemotional data.
An algorithm, in this instance, can be seen as a way to simply “profile” an applicant. It profiles you against what it sees as an ideal customer. It creates this profile of an ideal customer based on years and years of data collated from all its countless customers, from the model customer who successfully paid their debt to the delinquent customer who did a “runner”, as well as all the various types of customers in-between.
You see, this is their business. Lenders are experts at identifying the (sometimes seemingly irrelevant) characteristics of good customers based upon historical data even if the data they are looking at make little sense to you or me.
In fact, (and it may not make sense to senior management at the bank either) if the algorithm says that people with green eyes are more likely to be highly represented in the list of customers who are stable with credit than those with blue eyes, then having green eyes makes you are more likely candidate.
While this last example is obviously nonsensical as you cannot show a correlation between eye colour and credit, (could be a great topic for a PhD, though) it is not that far from what actually happens with a credit assessing algorithm. It is about understanding the difference between “correlation” and “causation”.
Good correlation = Looking good to a computer and not another human
A correlation is a relationship between two sets of data. This data may have absolutely no connection at all. For example, people who are left-handed may be better at a certain sport than people who are right handed. Scientists may have vague theories but really have no conclusive evidence as to why this is true. It just “is”.
On the other hand, causation includes a specific reason why one characteristic causes something to happen. For example, teenagers who start smoking before they have fully developed are more likely to be shorter than those that do not smoke at the same age because the chemicals contained in cigarettes. In other words, smoking is “causes” stunted growth whereas a left-handed person is more likely to be good at sports for reasons unknown and possibly unrelated.
It’s more about looking good on paper
Lenders deal better with correlation as it is quantitative (numbers and such) data that can be processed by an algorithm to spit out a result (this is what computers mainly do). Causation deals with qualitative (the “quality” of something) data that typically needs be interpreted and is multi-dimensional.
As such, correlations are much easier to locate and assess than causations. A lender is less concerned about evidence or causation (as it’s difficult to quantify and prove), and more interested in something easier to measure, being data matching or correlation.
Essentially, lenders want an easy life. They want a homogeneous customer base with each customer having the save characteristics as the next. This is because banks don’t like risks. Correlations and algorithms show them where the risks are. Your job is to mitigate this risk for them and make their job giving you credit that much easier.
Dean Morrison is a Director of the AtHome Group, a London-based boutique property development, investment, and management company.
AtHome’s driving motivation is the creation of properties exhibiting exceptional quality that are made distinctive by innovative
design and the blending of high-tech with stylistic influences completed with feng-shui inspired layouts
For daily motivational advice, wealth creation articles, and a place to ask any and all questions you may have about becoming financially free, head over to our free Financial Freedom coaching group.
One incredible nugget that can be found in property education is to “find your property investment area”. This useful nugget is essential to be an effective investor. However over the course of my journey I’ve found some investors seem to be paralysed by their inability to find their perfect property investment area. They say things like:
“I haven’t found my area yet.”
“I’m still looking for my area.”
“My area is too far away for me.”
“I need to research my area better.”
“My property instructor told me that the area I live is not good so I don’t know where else to invest.”
These replies are so common that I felt I should share my formula to help you “find your area.” But first you should know….
Every area in the UK is a great area
In the UK, practically every area is a great area to invest in. One great area to invest in is the area where you live. You do not need to go past your doorstep. After all, you live in that street and your neighbours live in that street so you’ve already found a great place to live. Seriously! Unless:-
you are in property full time,
you have sufficient time bandwidth, or
your circumstances allow you to invest 3-4 hours away,
don’t even try to invest further afield.
Your travel costs there and back will easily be in the region of £100.00 per round trip. Even if the returns are greater in another area, you will over extend yourself by:
The constant travelling of trying to get to know your area by walking the streets and chatting with people on the street
Constantly networking with estate agents
Wasting time looking around 30-50 properties in that area
Having to repeatedly check on any renovation and refurbishment project
Another things that’s easy to forget is…
Different types of people live in different types of places
As well as your physical “area” that you’d like to invest in, you also need to decide what “area” of people you’d like to provide a service to. This typically falls under five categories; pensioners, families, students, people on social benefits, and professionals.
My favourite tenants are students; they’re sociable, intelligent, and help keep me young… so I invest in properties that are within walking distance of a university. If you’re more interested in providing housing for families then invest in areas that are close to schools, playgrounds, and parks. If professionals are more your thing, invest in areas that are close to sources of industry, or that have robust transport networks.
Once you’ve decided on your tenant demographic then you’ve immediately focused where you should be looking, as a huge number of properties are no longer viable for what you need them for.
Now you should be able to tell if a property is right for your needs, there’s just one more thing…
Some areas are more likely to increase in value
If you’re investing to rent out the property then thinking about this issue may over-complicate things, but it is worth doing some basic research to see if your area is an “up and comer”. However if you’re investing in property with hopes to renovate and resell then this will be an important factor to you.
Here’s some economics 101: as the demand for something increases so does the thing’s price. So, what you’re on the look out for are areas where housing demand is likely to be on the rise (insert satirical joke about the UK’s lack of housing here). Specifically these are areas that:
Are receiving investments in infrastructure
A large business is about to expand to
Have recently had upmarket shops move in (M&S Food, Starbucks, etc)
Have increasing prices of local goods
The first three points can be readily researched online, but in order to find out the increasing price of local goods you may need to do some hoofing. You also need to bear in mind that (despite a stubborn belief) house prices can fall just as easily as they rise, and this method of generating income is far more risky than looking for rental based properties.
However the best property investment area is…
The fastest way to find a great area to invest in is…..
is to invest locally.
Being able to invest locally assumes you have the deposit to acquire the property. It may not be the best in terms of price appreciation or rental but you will know the area inside out. On top of that, you’ll be able to easily inspect any renovation projects you have, quickly deal with emergencies (of which there will be many), and spend far less time travelling.
If you cannot buy locally, then your primary property investment area will be one that circumstance has forced you into. If you are forced outside of your area due to lack of finance, then choose a target tenant and see if you can afford to buy a property that that target tenant (student, professional etc) would enjoy.
Conversely you could see what properties, you can afford and then choose your target tenant based on the types of affordable properties in your chosen investment area.
Here are my essential five questions to ask before investing in property:
How many properties do I want by the end of the year?
Can I invest in the area I live?
Does the area support my chosen customers?
Do I have the deposits for the properties I want in that area?
How much time do I have to get there and back and still be able to fulfill my family and work responsibilities?
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Here’s more articles you may enjoy reading from our property archive.
+ Jess Chai reveals her sneaky secret to being able to take naps as properties basically buy themselves!
Buying property can be overwhelming and tiring for newbies like me. In the beginning, my body begged me to take frequent naps. Unfortunately, the following would happen:
My phone and email would blow up every 10 minutes.
I’d feel like I was in survival mode. It was one thing after another. Solicitors asking about things I have never heard of. The estate agents pressuring me to complete (and I can’t do anything until the mortgage broker hears back from the lender). The lender is waiting to hear back from their underwriters. The underwriters need more documents as they find it a bit suspicious that I lived in three different address in three years (even though you have told them you were at university and that’s normal blah blah blah). It’s ridiculous.
Sometimes I’d become so tired, I’d want to throw my phone and laptop into the ocean and crawl into my warm, Internet-free bed.
But thenit hit me.
How to automate the buying process
I finally found a method that would allow me to automate the majority of the buying process. No more phone calls, no more running around to power team members. Here’s how my thought process went:
“If all the players in the game went directly to each other for the small details instead of me, that would be a huge weight off my mind. The estate agent can redirect the pressuring applying to the mortgage broker (which saves me doing it). The builders can ask the estate agent for access and I don’t need to get involved. Yay!”
This may be obvious to everyone else, but I’m a bit slower than you guys. I have started emailing out a contact list spread12sheet (see Template House purchase contact list and edit how you please) every time an offer gets accepted. It has everyone’s contact details on.
In the email to everyone I:
Explain the purpose of the spreadsheet: “To ensure smooth communication I have attached a spreadsheet with everyone’s contact details in. It may be easier to communicate between one another for updates and cc’ me in.”
State my preferred exchange/completion date (which I have agreed discussed with the estate agent).
Sometimes people will contact me for updates and I will redirect them to the spreadsheet. After the second time of asking and being redirected to the spreadsheet, they get the message.
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Being a young female entrepreneur with lots of hormones going on in my body, I have a lot of mood swings (and anger).
I know. I feel for my family and boyfriend too …
I have techniques I use to get out of a bad mood but sometimes, when I am bloodthirsty angry, I don’t want to change my mood. I want to punch and scream at everyone. Society tells us this is not a good thing to do.
However, society also tells us that if we are angry we “need to calm down”. I don’t know if anyone has ever told you to “calm down” when you are seeing red?
Well, for some reason the words “F**** you” fall uncontrollably out my mouth while my eyes bulge out my face and I generally hope they poo their pants while solemnly swearing to never say those two words again.
Psychotic behave aside, I want to share why being angry can be a great thing and how to use it to accelerate you achieving your goals.
What to do when Anger strikes
First, here are a couple of things I like to do when anger strikes :):
I acknowledge my anger and let myself know it’s OK to be angry. I like to say to myself “I’m f***ing angry and that’s f***ing OK.”
I never let myself suppress anger
Note: unless I am in a business meeting. Then I do my best to keep it under control. But as soon as I am out of that meeting and in my own space, all hell breaks lose.
Back in my younger days, I used to suppress my anger. This lead to headaches, I started thinking negatively and I criticised myself more with my internal dialogue. This lead to getting in a depression spiral, I hated life and I noticed by body getting ill.
All that started because I suppressed anger… DON’T SUPPRESS ANGER! Got it? I know there’s lots of scientific research on this so if you are interested, I highly recommended googling something like “Does suppressing anger cause illnesses in the body?”
Why can being angry be a great thing?
You are powerful
If you are angry, it means you have a lot of energy. This is a fantastic thing. Do you have any idea how powerful you are when you have this much energy inside of you? You know that feeling when you are so angry you have superhuman strength. You don’t give a f*** about what people think or the consequences.
You f***ing powerful beast.
Now accelerate achieving your goals
Firstly, grab a pen and paper. Off the top of your head, what are goals you have been waiting to achieve? i.e. Lose 5kg by going to the gym; place five offers on the properties you viewed last week.
Often I realise these are goals I have been procrastinating on because “I’m scared of making the offers” or “I’ve been too tired to go to the gym”. You might realise the same.
Great now you’ve got your goals, what actions do you need to do to achieve them? If you need some ideas I have listed my own personal ones below (property and non-property related):
Property related angry action list:
Email/call the agents and submit offers
Be polite but direct – when I’m angry, I don’t give a crap what they think so I am more than happy submitting my justified cheeky offer. If you haven’t got offers ready yet, see points below.
Get S*** Done
Tell everyone you live with not to disturb you for the next hour or two then lock yourself in a quiet room with your laptop. If possible, put your phone on flight mode so you can focus without getting digitally disturbed.
Analyse those effing deals you have been meaning to analyse
Work out the monthly cash flow and your max offer
Here’s my thought process: How many do you need to become richer than the person you are angry at? That’s right.
Don’t get even, get richer.
Imagine their face.
Then double it. Double their salary or whatever they make.
Once you have purchased your holidays and fancy cars or whatever floats your massive yacht, use your wealth to become a better human being than them. Give generously to worthy causes. By this point you’ll be so amazing you will have mastered the art of forgiveness. But in the meantime, let this anger fuel you to achieve more.
Non-property related angry action list
Go for a run or to the gym
Let the anger fuel you to achieve a new personal best on the weights or treadmill. When you start getting tired, REMEMBER HOW ANGRY YOU ARE. ARRRGHHHH, YOU WILL HIT YOU WEIGHT AND BODY FAT GOAL – Afterwards I feel amazing. Ahhh all those endorphins being released, makes me so happy AND I achieve a new personal best 😛
Create a meal plan for the week.
Most people have health goals. I have found a crucial factor in me getting into shape is my diet. The weeks where I notice significant results are the ones where I have planned my meals and therefore avoid late night snacking and eating out.
However, I find creating meal plans and shopping lists a ball ache. I can only do it when I have a lot of energy.
So when I am angry, it’s a perfect time – Personally, I hate using my laptop when I’m angry so I grab an A4 notepad and pen, lie on the floor and write ‘Day, Breakfast, Lunch, Dinner’ at the top of the page. Then the days of the week under the ‘Day’ column.
Write and create.
Grab that emo notepad. Go somewhere peaceful (I like nature :)) and write about your feelings through song/poem/spoken word…blog post (guilty!).
Or if you are more a painter, great. Picture grabbing your brushes, some plain paper and go where you feel drawn too. – There is a creative genius in us all gagging to come out, let’s finally make the time to let it out.
Go for a walk
ideally in nature or by some kind of water formation, such as a river or lake. I find water very calming. Most importantly, GET YOUR STEPS IN!
If anyone is with Vitality health or has a step tracker, they will understand the importance of hitting the 10k and 12.5k step mark.
Anger fills you with energy. This is a powerful energy. Focus on what goals you want to achieve and focus this powerful energy on tasks that help you reach your goal.
The seven actions that I take are:
Submit offers whilst not giving a f*** about what the agents will think
Focus my anger into work
Analyse deals whilst focusing on surpassing on who I want to beat
Get some exercise!
Produce a Meal Plan (or something you’ve been putting off)
Create something, channel that anger into a creative task
Go for a peaceful walk
How do you channel your anger? Let me know in the comments 🙂
Before I go through the costs of my first flip, I need you to know something…
I still have these coat hooks lying around my bedroom floor. I have no clue how to put them up. Zoom into the picture. Can you see the dust on them?! Yeah, that’s how long they have been there for.
So how did I do a full blown house refurb, within budget, while being so incompetent?
It is like those clever people say “I don’t need to know how to do it, I just need to know someone who does.”
The property is an end of terrace in Coventry. It is a 3 bedroom house with one bathroom, one kitchen, an open plan dining room and lounge.
Prior to the purchase I took three builders round and got three quotes.
Quotes varied from £12,000 (+ cost of the kitchen which we agreed I would deal with) to £32,000. Mad isn’t it? A £20,000 difference.
One of the quotes was from my usual handyman in Coventry (who is actually so much more than that title would suggest, but anyway). We have a good relationship and most importantly I trust him.
He doesn’t do plumbing, electrics or plastering, BUT he knows and trusts people who do. Great, because I know no one.
He is awesome and project managed the whole thing for me (while I travelled around New Zealand with my one of my bestie’s in a campervan<3).
Because my handyman and I have a good relationship, he didn’t charge me extra for project managing. He made sure all costs were transparent and kept all the receipts for me. He also gave me frequent updates and sent WhatsApp pics.
When the sale completes I will be taking the team out for dinner and slipping him a card with a nice little gift in.
There is no way I could have done it without him and his kindness. All I did was make decisions about kitchens and colour schemes. He took care of the rest.
Without further ado below are before and after pics plus costs.
Schedule of works:
Strip out old kitchen carcass
Remove boxing at back left and change the soil pipe. Box back in
Remove back window, panel, and door
Replace back window, panel, and door
Rewire kitchen to match new Kitchen units
Fit light strips under cupboards
Re-plumb for kitchen sink and for washing machine unit
Fit new Howdens kitchen
Tile wall between the top and bottom kitchen units.
(Electrics not included. I shall provide a more comprehensive spreadsheet for them later on)
Parts: Howdens Kitchen
Labour (Fitting kitchen)
Parts: Tiles, adhesives, caulking, extra plumbing, panels, paint etc
Labour (Painting & Tiling)
Additional labour (Due to Howdens measuring the kitchen incorrectly)
Additional labour for decorating (Due to Howden’s mistake causing delays)
Jemments (Jess’ Comments)
I know I know. The black floor tiles look out of place and ugly next to the nice new kitchen, but they are in good condition. I spent 30 minutes twiddling my thumbs, deciding whether to keep them or not. The cost to remove and replace the floor tiles didn’t make financial sense for this property. I don’t believe it had an impact on the sale price for who I was targeting so I opted to save costs and keep them.
Had this been a flip in Knightsbridge, it would have been a different story.
Colour scheme: The guy at Howdens recommended I get cream coloured units because I was painting the kitchen white. However, Howdens messed this up as well as the measurements. What you see above is white walls with white gloss cupboards. Hence, a very very white kitchen.
We could have waited for Howdens to bring the cream cupboards, but time was of the essence, the delays from the measurement mix-up cost us an extra £540 and once the buyer adds colourful accessories in the kitchen the white won’t look so glaring.
The mistake Howdens made set us back a few days and cost us £540 extra in man hours. It was ridiculous. Howdens did apologise and offer £100 in credit towards our next purchase, har har.
I thanked them for the offer and explained that their mistake had actually cost us £540. They stayed with the £100 credit offer. I would not accept this as their final offer. After I complained about the service we had received (one of the staff was really rude to my team when we explained the mistake) they offered to give us £135 towards the cost of the kitchen.
At this point, we hadn’t paid for the kitchen yet because Howdens do a 30 days credit thing. Once the 30 days were up we started getting the payment notices. As the issue hadn’t been resolved to a satisfactory level, I was a bit naughty and paid the total amount minus £540.
Howdens’ account department called me several times. I explained the situation and they said they couldn’t do anything, only the manager could.
So I called the manager but he was away on holiday.
I got calls from his assistants who I tried to negotiate with but they said contributing £135 towards the kitchen was the Manager’s final offer.
“Bullshit.” I thought. They messed up the measurements and they delivered the wrong coloured units. Both mistakes cost us £540 and they were rude to my project manager. They need to take some responsibility for that!
As the manager was on holiday and he was the only one I could negotiate with, I left it until he returned.
While he was away I got letters from Howdens threatening legal action and blah blah blah. I don’t think it was serious. One of my business partners suggested we just pay. I said “No way! I don’t care if it is just a few hundred quid, it’s the principle. I understand mistakes happen and I’m not angry about that. It is the fact this established business is not taking responsibility for their mistakes, why should we pay for their mess ups!? Leave it with me.” I was on a war path.
My business partner sighed and let me get on with it. Howdens were going to take responsibility and pay at least half the cost.
The manager finally returned from holiday 2 weeks later. We had a surprisingly pleasant chat. We both wanted to find a win-win solution that both parties felt was fair. I explained all the mistakes Howdens had made plus how much it cost us. I also empathised and said mistakes happen, I totally understand. I am not annoyed about that, but I do believe it is only fair that Howdens take responsibility for it.
The manager suggested paying half of the £540. Boom. Exactly what I wanted. I could have tried for the whole £540 but the time it would take to put together the arguments and argue it was not worth it. I was happy with this small win.
Moving on, I thought I would have to replace the window and back door individually but the back window and door came all together as a big panel. I didn’t know that was a thing!
It is not the fanciest kitchen in the world, but it does the job. In the future, I would like to experiment with a bit more colour.
Brief schedule of works:
Strip out old bathroom
Remove transparent wild west like doors – wtf (top right pic)
Move plumbing so I can move the position of the toilet to the back wall
Move plumbing so I can move the shower from the back wall to the front wall
Paint walls white with special bathroom, anti-mold paint
Install chrome towel heater (opposite toilet)
Install bath/shower suite and toilet/sink vanity unit
Tile walls around shower and sink
Put 6mm plywood down on the floor before fitting lino (this makes sure the lino is laid on an even surface).
Fit non-transparent bathroom door and lock
(Prices do not include the cost of strip out or lino)
Parts: New soil pipe
Labour (Soil pipe fitting)
Parts: New bathroom suite
Labour (Fitting new bathroom suite)
Parts: Plain white bathroom tiles and adhesives etc
Labour (Painting and tiling)
Parts: Bathroom light
Parts: Chrome heated towel rail
Parts: Thermostatic shower fixed head solid bar (aka the shower heads)
Parts: 6mm ply for bathroom floor ready for lino
Parts: White bathroom paint and undercoating
I LOVE this bathroom (the new one). My handyman chose the suite and suggested the flooring. I think it looks fresh, clean and cute. I am jealous of the shower head. I don’t even have one that nice in my own home… maybe I should get one.
The vanity unit with the toilet and sink combo is more expensive than your standard toilet and sink basin. However, it looks great and also saves the hassle of putting up storage cupboards on the wall (I believe it was brought from bathrooms.com).
I don’t think the vanity unit was a necessity to get the house sold, but as I kept the shitty black tiles in the kitchen I didn’t mind splashing out on something nice in the bathroom. Would I do it again? Yes. We could afford to buy it with our budget so why not make the bathroom as nice as possible for the new buyer.
I believe the reason the previous owners had a corner bath is because a standard bath tub does not fit. To my relief, smaller bathtub sizes do exist. Yay!
I toyed with the idea of getting a really nice mirrored cabinet with lights, demisting technology and a shaving socket.
And when I say ‘toyed’ I mean being extremely tired and spending an unproductive 3 hours trawling, ebay, amazon, gumtree and all the ‘sale’ sections on bathroom websites looking for an attractive mirrored cabinet with all the fancy features that was £80 or less.
Fun fact, these don’t exist for that price. If you want a nice mirrored cabinet with all the features like lights, and anti-mist or whatever it is called, be prepared to pay at least £200 or more.
In the end, there was too much choice and I couldn’t justify the cost. If I was flipping in a more expensive area I would get one installed.
The total cost of this bathroom including flooring and strip out was around the £1850 mark. I am happy with that price.
The Lounge & Dining Space
Brief schedule of works:
Remove archway and re-plaster that area
Remove french doors and replace with external french doors
Do the pipe work to install new radiators (costs included in plumbing)
Install additional electric sockets in each corner of the room for convenience to new buyer (costs included in electrics)
Cut off gas and block off fireplace
Paint walls white (costs included in cosmetic repair)
Recarpet (costs included in cosmetic repair)
Parts: New external french doors
Labour & parts: Remove archway, re-plaster that area to make good, sort fireplace
From a hole to a home. The old French doors (with the netted curtain over them) were for in good condition but intended for internal use. They used to lead out into a conservatory. Unfortunately, in her rage, the ex-wife of the previous owner ripped out the conservatory…with her bare hands. This is both scary and impressive. Hats off to her.
This meant the old internal french doors had now become external french doors and had to withstand all sorts of weather conditions which they were not designed for. That’s why we replaced them with stronger french doors designed for external use.
I decided to have all the walls painted white. I know. I am such a daredevil with colour.
I decided on white for three reasons:
I am too pussy to experiment with colour on my first flip
White makes it easy for the new buyer to paint the walls her colour of choice when she moves in.
If my builders ran out of paint while painting, they can go to any hardware store and get the exact same colour. White. None of this ‘Almond white’ or ‘Milk white’ shit. No. The colour is white. Pure white.
I did ask for spotlights in the lounge. I am not sure why this wasn’t done. Maybe I changed my mind without realising? Being a female I do that sometimes.
If I did this again I would ensure spotlights were in the lounge and dining area. Why? Because it completely changes the feel of a room. Spotlights modernise a room, giving the impression of higher value.
Here’s the old staircase
Schedule of works
Strip out everything
To remove all paper as necessary and prepare all walls, floors and ceilings
Repair holes in ceilings in bedrooms 1 and 2
Rub down all woodwork and prepare ready for undercoating
Caulk all areas as necessary
Paint walls and ceilings with white undercoat
Paint walls and ceilings with white emulsion (except kitchen & bathroom)
Apply gloss to woodwork
Recarpet lounge/dining room, the stairs and hallway and all three bedrooms
Skip hire for 3 days
Labour (Strip house & put in skip, 4 man days @£70 per day)
Parts: Paint for the whole house + decorating materials to fix holes in bedroom
Labour (2 men x 9 days each @£100 per day)
Parts: Doors cost £17 each x 6
Labour (Door fitting £35 per door)
Labour & parts to re-carpet house: Lounge/dining room, stairs, 3x bedrooms with underlay, plus lino for bathroom
What I have learned from other projects is:
Only get a skip when you have enough stuff to fill it. Otherwise, it will still get filled, just not with your stuff.
If you want to save costs and you have the time, fill the skip and do the painting yourself. If you are having an awesome time in a campervan in New Zealand, there is value in paying someone else to do it.
I think the doors were a good price for parts and labour but have nothing to compare it to.
The carpets and lino were from Carpetrite. I like Carpetrite. You choose what flooring you want in the shop, they come measure up, then they come and fit it. They take a lot of hassle out of sorting flooring.
Remember, everything is negotiable. I think the original quote was £1200 or something like that which I was not prepared to pay. To my memory, they don’t do trade prices but they do sometimes do deals if you put a deposit down/negotiate hard.
Central Heating System
Schedule of works
Install new central heating system
Plumb in radiators (downstairs hallway, lounge, dining room, all three bedrooms)
Parts: 5x radiators
Parts: Room thermostat remote
Parts & Labour: Install new central heating system
To be honest, I still have no clue what a central heating system looks like or consists of (other than radiators). All I knew is that the house needed one and that my handyman knew and trusted someone who could install it at a price fair.
What you should take from this is, if I can do it, you can DEFINITELY do it.
Luckily, one of my business partners loves gardening. I gave her and her husband a strict frugal budget of £200 to sort out the aesthetics of the garden. Despite going a whole £3 over budget 😉 I think they did a pretty awesome job.
The garden was the last thing we did. During the renovation, we used the garden as a dumping ground then wheeled the junk to the skip from the back gate (far right-hand side corner). There was no point in trimming the bush and making good until we had finished our dump.
Schedule of works
Make as attractive as possible
Replace missing fence panel
Replace soffit and paint
Skip hire for 1 day
Parts: Flowers to make garden look pretty
Parts: Fence panel, concrete to fix it in
Labour (Fix fence panel)
Parts: To fix fascias, gutters and soffit replacement
Parts: Paint for exterior wood black and white
Labour (Fix gutters and paint fascias)
So there you have it! The total costs for my first flip, I hope that you’ve found this breakdown useful. If you have any questions, feel free to ask them in the comments section OR head over to our Facebook community where you can meet and connect with over 500 other entrepreneurs and property investors.
If you liked/enjoyed/found useful this article, I’ve written a lot more (here are some of my favourites):
+ Nate Chai interviews Stephanie Brennan, who managed to build an AUD$ 2.3 million property portfolio in just two years
After reading a news story about a 24-year-old with an AUD$2.3 million property portfolio, I knew that we absolutely had to interview her. Stephanie Brennan (pictured in the header) has managed to begin her property empire early in her life and shares her proven advice here.
In this interview, we find out; how to streamline your property management, the trade secrets of estate agents, and how to snowball your property portfolio.
Looking at your (rather incredible) story, many would assume that the reason you got so knowledgeable about property is due to your time spent as an estate agent.
What are the three biggest lessons about property you learned from your time as a property manager and as an estate agent?
My time in real estate taught me a lot about the sales, purchasing, and management process involved with having an investment property. Such as, the difference in fees across various real estate agents, and the difference in the service you would receive.
My top three investment lessons for the readers are:
The importance of routine inspections and what maintenance items to look out. For example, you can find the areas where you can increase capital value or rental return in your property through renovations or things like new blinds, or new carpet
The importance of professional photos and paying for priority listing on realestate.com.au and domain.com.au as 85 per cent of people don’t look past the first page when searching for a property
Learn about what to buy, where to buy, and the capital and rental returns property could bring as an investment
Prior to building a property portfolio, I was very keen to invest in shares and really hadn’t thought about investing in property aside from buying a home to live in.
Property as an investment option was reaffirmed in my mind when I studied a Diploma of Financial Planning the same year I purchased my first property.
What are the best resources for those whose professions are not in real estate to learn about property?
My advice to others would be to attend as many seminars as possible and do your research. There are plenty of books on property (some of which I have written myself).
There are also plenty of free suburb reports available online that you can use to research the average growth and rental return or the demographics in the area you are looking at. This will give you an understanding of where to look and whether a unit or a house would best suit the demographics of the area.
A large amount of my knowledge came from my research and studies along with my career, but also through my own trial and error.
With investing it’s largely common sense; pick a place most people want to live or would like to live and a suburb that is largely desired. For example, the majority of people like to live near to a CBD so by buying a property within 20kms of the CBD will often result with an investment that performs more consistently over time.
Managing properties (and tenants) is one of the biggest headaches for anyone with a property portfolio, what are your favourite ways to streamline that side of the business?
I currently have a managing agent that manages my properties. How I manage this relationship is that I set myself a maintenance budget each year for each property. This way I can undertake repairs as need be (up to a certain limit) without being concerned about eating into the positive return I make on my properties.
I also ensure the agent runs all maintenance requests past me prior to arranging them, and that I attend routine inspections where possible so I can evaluate the condition of the property. If I can’t attend an inspection I have the agent send me a report and as many photos as possible and, sometimes, a video.
If the agent sends me a rent increase recommendation, I review this rent increase to ensure that it’s accurate, then I review my budget and the relationship with the tenant. Often I don’t proceed with the increase because to me a quality renter is more valuable than an extra $10 (£4.60) a week.
In my business, I often work with the same agents that manage my own properties so I can ensure that my clients are receiving the same level of service that I receive.
You tout the low deposit required (five per cent) as one of the reasons you were able to begin purchasing properties. But the value of the properties you currently own is through the roof, where did you find all that capital?
With my own purchasing, I did have the 20 per cent deposit saved but I had my Mum agreed to go guarantor [her Mum would be liable should Stephanie be unable to pay back the mortgage – Nate] for the loan so I could put my funds into an offset account.
I’ve predominantly used the increase in the property market and in turn the increase in my property’s value to release equity from one property in order to use this cash as the deposit on the next.
This is how you can leverage yourself into more properties.
Huge thanks to Stephanie for chatting to us, she can be reached on Twitter, Facebook, and shares more excellent property advice here.
Our free Financial Freedom Coaching group has hit over 1,000 members! Head over there for daily motivational advice, entrepreneur tips, and access to some of the UK’s best business minds.
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If I was to die tomorrow this is the one message I would want the world to hear: Take responsibility for your actions and emotions. You choose how you feel and you choose how you react to situations.
Once I understood (after 9 years of practising) that I can choose how I feel and I choose how I want to respond to situaions, I was able to rebuild my confidence after a major knock.
From the ages of 16 – 22 I was insecure, obsessed with whether people liked me or not and most detrimentally, I let other people dictate my emotions. It was easy to wind me up and make me angry. Something my brother learned from an early age. If a stranger wanted to make me cry, they just had to make a comment insinuating vague disapproval of me or accidentally shove past me in the street.
It was easy to wind me up and make me angry. Something my brother learned from an early age. If a stranger wanted to make me cry, they just had to make a comment insinuating vague disapproval of me or accidentally shove past me in the street.
I had no control over my emotions. I blamed everyone else when I chose to be angry or upset. Crying was my always my default. Crying meant I would get attention and sympathy, every victim’s dream.
In short, I was a pussy.
It feels weird thinking about how I used to be.
Nowadays, I love the person I am, flaws and all. If I do something that makes me happy or makes me laugh (at my own expense), I’m not too bothered about others opinions. They are entitled to their own opinion, just like I am entitled to think singing a song about a Penis is funny.
If someone does something and it makes me angry or upset, I now ask myself why am I feeling this way? I become curious about my own emotions and question them as opposed to immediately blaming others. I’ll talk more about this later.
Below are 4 lessons I have learned about empowering yourself.
I control my own emotions.
I choose what emotion I feel
At an early age I learned that I am in control of my emotions. I am the one that chooses to feel angry or sad. I am also the one that chooses to feel empowered or loved.
I choose what emotion I want to feel by choosing thoughts that make me feel that specific emotion.
For example, if I am at a networking event and want to feel confident I ask myself “Imagine if I was feeling confident right now, how would I feel? And what would I do?”
My posture immediately changes. I smile. I imagine everyone in the room is already my friend. They all want to talk to me and catch up. Plus, I have the answer to all their problems and the key to making their dreams come true. I’m like Genie from Aladdin.
How does that make me feel? Well, it does wonders to my ego haha. It makes me feel good. It makes me feel like I have a purpose there and it makes me keen to approach people because I know I can help them.
I choose how I interpret things
Interpreting messages. No one can interpret messages for me. People can tell me their perspective, but at the end of the day I am going to believe the interpretation I want to believe. Even if it is a lie.
For example, a guy says “You look beautiful,” I can: a) thank him and let my ego enjoy the compliment or b) make the assumption he is lying and feel anger towards him.
a) thank him and let my ego enjoy the compliment or b) make the assumption he is lying and feel anger towards him.
or b) make the assumption he is lying and feel anger towards him.
The same situation, but completely different emotional responses. And I choose which way I want to emotionally respond. Therefore, it is not logical to choose the option that has the best outcome for everyone involved?
Yes, we do have automatic responses to things; but remember we chose those automatic responses in the first place by what we practice.
We can reprogram our automatic responses by repeatedly practising a different response. Easier said than done, but 100 percent possible. There is a good article about it here.
Let’s play a fun little game. It is called “The 24-hour negativity fast”.
This means you are not allowed to think anything negative about yourself or assume others are thinking negatively of you for a whole 24-hours. If negative thoughts come in, force yourself to think about something else.
When this game has been suggested, lots of people think “F*** that. a) There is no way I can do that. b) People will think I’m deluded.”
To clarify, negative thoughts will come into your head. Guaranteed. That’s totally fine. Your job is to notice when the negative thoughts come in and make a conscious choice to focus on a positive thought.
For example, if a stranger walks past and gives you a random look, you are not allowed to assume it is because you smell bad, or because they are judging you for XYZ.
Instead, use your positive imagination. Maybe they like your smile? Maybe they like your coat? Or maybe they are thinking “Daymm, she’s one hot motherf***er!” Mm hmm, work it girl.
It takes the same amount of time and energy to make positive assumptions as it does to make negative assumptions.
The truth is, most assumptions are made up crap in our minds so we might as well chose the assumptions that make us feel better. Make sense?
This is a good reminder for me too actually. As of now, I’m going to join you on this 24-hour negativity fast. How exciting!
Take responsibility for your actions
In my case of the pyscho boyfriend (see this article for details), it was my choice to let the room to this girl. It was my choice to continue letting the room to her when his guy informed me that he had now become her boyfriend and may be staying there a couple nights a week.
It was my choice to enforce the contract (which is what the boyfriend was angry about).
Once I understood my actions created the problem, I understood that my actions can then create the solution. The power has always been in our hands.
At the moment, that sentence may just look like words on a screen but please read it again. Once I understood this, my mind instantly changed from playing the victim to be being empowered.
In the end, I decided it was not worth the headache. I won’t go into all the ins and outs but the result was that I gave the girl her full deposit back, minus a contribution to the re-let fee, rent pro-rota for the month and a homemade congratulations card wishing her well (as it turned out she was pregnant).
This is the choice I made and I am proud of my actions.
I could have let my ego get in the way and continued fighting with her boyfriend. Or I could have got back at the guy by taking his girlfriend to court for breaching her contract. None of those actions would make me feel good. They would make me feel horrible, plus I actually really like the girl. She was always polite, clean, and paid rent on time.
I take full responsibility for my actions. This means I practice only taking actions I am proud of. Obviously, easier said than done, and YES I still mess up a lot. However, I’ve found this principle to be a good guideline.
Oh and as it so happened, I found another tenant who wanted to move in on the same day she moved out #LuckyBuggar.
Don’t get revenge, get better
We play the victim when we feel someone has taken away our power. In order to feel better we figure out a way to get back our power i.e. revenge or making them ‘pay’ for what they have done to us.
The thing is, no one can take away our power. We can choose to feel powerless.
The first time I heard the previous sentence it made zero sense to me so allow me to illustrate with an example. In my younger days I was a revengeful victim against my poor parents.
I remember one time being really upset with Mum. I can’t remember what about, I doubt she had done anything wrong, she had probably said “no” to buying me something.
Anyway, I remember being so hurt by this and after a waterfall of tears I went from feeling hopeless to feeling anger. I decided to get revenge (I feel so bad writing this, Mum is one of the sweetest people I know. Maybe she’ll find this funny…).
Once I got home, I snuck into Mum’s room, grabbed one of Mum’s expensive makeup brushes and put oil or moisturiser or something like that on it, then ran away. “That will show her for messing with me,” I thought to myself while on this emotionally unstable power trip.
An hour later I was still angry but felt bad about what I had done. I love my Mum, why did I try and upset her?
A day later Mum found her makeup brush and asked if I knew anything about it. I burst into tears and told her how sorry I was. I felt terrible.
I went to my piggy bank to see how much money I had. I have £7.40 in there. I told her I would buy her a new one when we next went to town.
I was the one who chose to feel powerless and I chose to punish someone else for that. That’s not right or ethical. There is a ridiculous number of people who blame others, for them actively choosing to feel powerless. If everyone learned to take responsibility for their actions, oh my gosh! Imagine what kind of world we would live in :). There would be no revenge and no blame. Everyone would understand how powerful they are (in a healthy way), naturally, everyone would then be confident. How confident you think you are directly relating to how powerful you think you are.
How confident you think you are directly relating to how powerful you think you are.
I would love to live in a world where everyone had good self-esteem.
Of course, people only know what they know. I totally get that. I guess that’s why I wanted to write this blog. To share a powerful life lesson I have learned and hope that anyone looking to take back their power takes note.
Damn. If only my 7-year-old self had read this blog and learned that she can choose how she responds to situations.
4. Refocus our energy
Instead of using energy on hurting people, imagine if we used our energy on becoming a better human being? And making the world a more loving place?
I am aware those last two sentences sound a bit fluffy so let me share with you little things I do to achieve this:
Think about my friends and what I appreciate about them. If one individual friend stands out in my mind I call or text, saying how much I appreciate them.
Get out my own head and watch an inspiring movie. Watching an inspiring movie gives me something else for my mind to focus. Plus I always leave the cinema with a different perspective on life.
Seeking sympathy or blaming others for your circumstances = playing the victim
Taking responsibility for your actions and emotions = playing the empowered bad ass.
Head over to our free Financial Freedom Coaching group on Facebook for daily motivational tips, how-to articles, and life lessons. Also, please join our mailing list (it’s on the right) for our articles straight to your inbox. Lastly, here are some more of my stories and things I’ve learned:
That time in my property investing career has finally come. I have had my first experience of rent arrears (never will I let this agent let my properties again). It’s such a headache, especially if you are like me and have no idea how to deal with it.
I knew I needed to act fast but had no clue what actions to take. What is a professional amount of pressure to apply to get the rent? How strict do I become when the tenants message me all day saying they thought the other tenants were sorting it out? What upper hand do us landlord’s have over tenants?
Thankfully I’ve found a solution!
Put admin charges in your AST
I was sick of having all these texts/WhatsApp messages from my tenants on a joint Assured Shorthold Tenancy (AST) who couldn’t figure out how to pay the rent from one bank account. It was a nightmare and ballache to deal with.
I don’t want to spend my day WhatsApping tenants who have no idea how to manage themselves. My friend Saj suggested I put a clause about admin charges in my ASTs. These admin charges will cover any texts, phone calls, letters issued due to rent being in arrears.
I had no idea how much I should charge for each. Then I remembered, this is my business. Within reason, I can charge whatever the heck I want and so can you.
This is the clause I added to my ASTs:
If rent arrears occur, the Tenant agrees to pay all admin charges and legal fees related to their rent arrears. Please see examples of charges attached.
Admin charges for rent arrears
The intention of this clause is more to discourage tenants from entering arrears than it is to make money. Highlight this clause when discussing the AST with prospective tenants.
Again this method is not designed to make money, it’s to ensure there is a large enough incentive for tenants to pay their rent on time. Allowing you to focus on the things in your life that really matter.
We’ve got some more landlording advice for you guys: