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  • Property-a-holics

    Guide: Giving up day job to become a landlord



    ​Exiting the corporate rat race and going full time into property is the dream of many people.

    The thought of being your own boss and taking control of your own destiny is very alluring.

    However, giving up the day job is not something to be taken lightly.

    It needs extensive thought and planning to ensure that you make a smooth and profitable transition from corporate wage slave to full time landlord.

    Here's my guide to giving up the day job:

    1.  Consider the big and long-term picture

    One of my mentors gave me this advice about business:

    1. Look to build a profitable and sustainable business.

    2. Underpin it with appreciating assets > brand, intellectual property, systems, bricks n' mortar property.

    3. Structure it in a tax efficient way.

    4. Make sure it aligns with personal, lifestyle, and other goals.

    5.  Make sure you can operate the business from anywhere in the world - i.e. systemise it, use tech, and operate in the cloud.

    2.  Go into detail

    The next thing to do is consider your financial situation.

    Go through your bank account and work out how much money you need per month to live the lifestyle you would be happy with.  There may be compromises to be made if you want to exit from your job more quickly.

    Once you know how much it will cost you to live without a job, you can then work out how many properties you will need to achieve the desired income.

    You could also consider taking in lodgers to start honing your landlord skills and enjoying the tax free allowance, while building your income at the same time.  This is what Nick and I did and it has worked very well.  

    3.  Speak to a mortgage broker and make a plan

    Many people rush to give up their day job, only to find that they no longer qualify for mortgage finance!

    That is why working with a broker is paramount as Mark from Property Tribes Financial Services explains:



    4.  Speak to a tax advisor

    You will need to structure your property holdings in the most tax-efficient manner, so a detailed conversation with a reputable specialist tax advisor is vital.

    5.  Build up your property income while still working

    This is the frustrating part but it's important to build your passive income before exiting from your salary.

    6.  Consider a transition period of consultancy work

    Many people transition from full time work to property, by becoming a freelance consultant.  This is a good way to move towards the full-time situation as you can gradually phase out the consultancy work as your property income increases.

    7.  Become a property sponge

    You are entering into a business now, so you MUST become educated and informed and adopt a professional approach.

    Join a landlord association. Property Tribes is partnered with the Residential Landlords Association and offers our members a 25% discount.  

    Read and learn as much as you can.  See - Property Tribes Essential Book and Reading List

    Attend networking events.  Start building your network of property contacts.

    Get to know the Property Tribes "Power Team" for the contacts you need.

    Property Tribes Landlord and Investor "Power Team"

    Get a professional team around you to support you, and create a property business plan as if you were starting a new business.

    8.  Start to self-manage your properties

    Your properties may have been with lettings agents while you were in employment.  Now is the time to gradually start taking them over and getting into a working relationship with them, while also starting to form closer relationships with your tenants, letting them know that you are now their contact.

    9.  Set a date for you to wave bye-bye to the boss

    Nothing motivates more than a deadline, so set a date as to when you are going to hand in your notice.

    Keep that date at the forefront of your mind and count down to it to keep you motivated.

    Create a "mood board" of what your life will look like once you achieve your goals. This will motivate you to keep going.

    10.  Hand in your notice!  YAY!

    It will be scary and exciting at the same time.  If you feel a bit wobbly, pop along to Property Tribes and read our most inspirational discussions EVER as this will help keep you on an even keel. Smile

    Don't be afraid to ask for support or input.  Arrange to meet other landlords for coffee or lunch.  Landlords love to talk!

    If anyone has any tips to add about giving up the day job, please do contribute to this thread and share your experiences.

    Related content:

    What does it take to give up your day job? 

    Day job vs. Property Investor

    Don't give up the day job!

    Converting to a full time professional landlord 

    Can I give up my day job?

    15 things they WON'T tell you at a property/wealth creation seminar

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    This is all very good stuff . I broadly followed its content

    Some things are done on a whim before we do them - A Macdonalds
    Some things are thought about for a week before we do them - A new car
    Some things need planning for a few months before we do them - A property portfolio

    A MacDonalds is a short lived thing - 3 hours later I`m hungry again

    A car is a medium term thing - 3 years later it is a bit tired and has lost you money

    A property portfolio is a long term thing - 16 years later my houses have enabled me to give up the day job over 4 years ago . They continue to shine. Their value has doubled, the mortgages don`t look so scary now due to inflation gradually eroding their real value year by year . The equity grows and the value of the property distances itself from the mortgages.

    The Value says to the Mortgages - I was your best friend once and i thank you from the bottom of my heart for everything you did for me but its time for me to move on now. I want to grow and mature and not being nasty but I want you not to grow. I want you in fact to stay small and eventually become insignificant in my life and maybe we will part our ways totally one day. Sorry no offence but that`s life

    But the now Majestic Value says - Hey Rents you join me and increase along with me and because of inflation and market forces we can do this together - Lets walk off hand in hand into the sunset and leave the mortgages behind trailing in our wake. Equity can be our faithful cushion and can send a message every now and then down to the mortgages and say. Nice job thanks again and hey sorry we had to leave you behind

    The property portfolio enables me to buy Macdonalds every day now ( if i wanted to but i don`t. ) . The property portfolio enables me to buy a new car every year with the income they generate ( if i wanted to which i don`t ). It even allows me to buy a new house virtually every other month ( if i wanted to but I dont ) .

    Perpetual investment motion is an admirable goal. Aim for it

    Work very hard now on your portfolio now so in 16 years you don`t have to work at all
    .
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    Jonathan Clarke. http://www.buytoletmk.com


    Jonathan,

    As Vanessa said it was interesting to note that it took you 12 years before you could finally give up the day job.  What I find more challenging than finding the money to get going is finding the time.  I, and I think others, would find it interesting if you could kindly let us know how much time per day/week it took you to get your show on the road and how you went about juggling your day job and family committments with that.

    Brian


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    Hi Brian

    It was fairly easy at the beginning but with each property it yes stole a little bit more of my day. Having said that as i acquired more knowledge i was able to do some things better and quicker and became more streamlined. I worked shifts so I could often view during the day. Yes it was a constant juggling act but I remained focused and the way i saw it was if i worked twice as hard now i would reap the time benefit ( let alone the financial benefits) later. So there were some 16 hour days along the way but maybe an hour a day spread out over 7 days was the norm at the beginning. That increased to maybe 2 hours a day when I got to 10 properties  .  In 2005 six years into it my rental income matched my day job income  so i bit the bullet and went part time at work down to 24hrs per week.Best thing i ever did . This allowed me to devote more time to family / property and keep on expanding. I would drop off the kids at school at 9 and be viewing at 9.15.  I was fortunate to be in a position where i could write my own shift pattern and i came up with a system which enabled me to have 9 days off in a row every 5 weeks. Blissful. So 2005 onwards it was all downhill really. It was a bigger personal decision to decide to go part time than it was to fully retire. Going part time gave me the taste of freedom and confirmed my desire to work for myself. It wasnt as scary as i thought it might be. I was confident in my business model and it all worked out well 

    I never really understand why society is arranged so  the masses work 8 hours a day 5 days a week from say aged 20 to 65. Its madness really

    Put in some 16 hour shifts in the early years when you have the energy drive and enthusiam and build an asset base for the later years when you may feel you want a bit of a lie in


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    Jonathan Clarke. http://www.buytoletmk.com

    Hi Jonathan,

    Thanks for getting back to me regarding the time issue - I always find it interesting to know how people get going.  I guess you were lucky in the sense that your job was flexible so that you could bend it around your family and property committments. And you were young so had the energy.  Also you started when the tide (of property prices) was still rising and mortgage finance was easier to get and you live in an area where the numbers stacked up well - I'm in west London where the numbers are more difficult.   So, I guess it does, to a large extent, come down to each individuals set of personal circumstances couple with the necessary drive and determination.

    regards,

    Brian

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    Thanks for commenting Jonathan.

    So it took you 12 years to go full time?  

    That is a great anti-dote to the gurus who say you can give up your day job within a year!

    Well, it's true you could if you started out with a very signficiant sum of money, but most people start from a more modest position.

    I like the saying that the true way to success is sustained and intelligent action on a daily basis.

    Of course you can accellerate the process, and I wrote about 11 ways to speed it up >>> here.

    I also regularly refer to this:

    Top ten ways to make your dreams come true.

    10. You regularly visualize the end result, the after-party, or beyond.

    9. Every day you "show up," doing something about it.

    8. You're not attached to how it will come true.

    7. It really matters to you; you really care.

    6. You know who the first 3 people are that you'll call with the news.

    5. You're smiling and winking way more than normal.

    4. Sometimes you speak and behave as if it already has.

    3. It probably doesn't depend upon specific people.

    2. You already know what your next goal is.

    1. You keep whispering, "Sweet! Thank you! Yes!" with clutched fist.

    Thanks to Notes from the Universe for the daily inspiration.

    Take a leaf of out real landlords' books - get rich slow and enjoy the journey!

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    Fail to Plan. Plan to Fail 

    I am sure everyone has heard this before but hearing it and adhering to it are not always the same.

    In almost everything that we do spontaneity is rarely our first emotion/action. The times that it is, we tend to put it back in it`s place and make it aware that there is a pecking order. We might even convince it that we will analyse it`s idea, examine it`s feasibility, make sure it`s achievable and then declare, acting upon it as an act of spontaneity anyway!

    As one of the legions of employed we meet friends and family and discuss with colleagues our daily struggle with employment and that "I`m going to look for something else" mindset. Without even being consciously aware of it we have already started to plan our escape from the job we no longer want to a new, exciting and far more rewarding alternative (or that`s what we hope). Our friends and family, aware of our desire to find something new, speak to their friends and so your web/network of job finders starts to work for you. All this and you probably havent even asked them to!

    You make use of online recruitment sites you subscribe to job boards and all the time it`s unlikley your current employer knows anything about your desire to leave. When you do find something you want to know everything about the role, all the perks, the holidays, the pay, overtime, benefits, career progression and anything else you can think of. You dont think the here and now you think future. You probably spend an hour or so looking at the internet reading about the Co and so on, getting to know a bit more about them. If you are going to take this job you have to be certain that you`ve done your homework. You have to know your stuff.

    The interview? Lets be honest it`s you interviewing them! You are sitting there thinking "Do I want to work for you"? "Convince me I should work here"

    Before you do anything, make any significant decision you embark on a plan to conduct Due Diligence. Once you have compiled this information you are going to conduct this Due Diligence again and probably once more. Why? Because Due Diligence is the glue that holds your plan together. This is your future there is no point going from one frying pan into a hotter fire.

    Hopefully everyone can relate to that above at some stage in their lives. However, a strange thing can happen if you are similarly a BTL investor in a job you loath.

    What better way of escaping the rat race than becoming a full time investor. Making property your business. How hard can it be? Lets be honest you have managed to purchase 2, 3, 4 or however many properties whilst holding down a full time job. If you could concentrate on property full time what could you achieve? Do you even need to work full time?

    At this point the vast majority of people go back to that stage of talking to friends and family and then looking to research their next job, the full time Property One. The problem here is that it`s unlikley they have a comparable network of people that can help in property, so you lose your assistants who are out doing the additional groundwork for you. You didn`t realise you had them before so many of us forget that we aren`t getting as much information as we did before on which to make our decision. 

    Now it`s up to you. You need to speak to full time landlords who have done it, find out what went well and what didn`t, speak to your accountant and Tax Adviser about how you should structure this new venture, speak to your broker who can tell you what you will need going forward. The broker will let you know for example that the majority of lenders want to see income minimum of c£25k pa from a source other than rental. You should network, search forums and web portals and do everything you would have done above. 

    This is the Due Diligence for your new venture. This is probably the single most important act of Due Diligence you will undertake. Strange then how so often this is seen as due diligence when really it should be DUE DILIGENCE. The fact that you already have this "business" in place shouldnt affect the scale, breadth and detail of your "Double D"

    I am not saying that you shouldnt look at your well run BTL investment portfolio or FLIP, Development or whatever property business and not believe you could run it as your full time business. Why not run it part time to start with? You might think you already do but you probably run it when you finish your full time job or when you get the chance. If you really want to see what you could achieve, perhaps take employment with less hours to give the remaining hours to property. Test the water. You dont have to strip off and jump in just yet!

    Test the new plan. Make sure it works. Oil the machine, polish the plan, make that new venture as comfortable as possible so you can just step into it at a later date. Great plans dont happen overnight. Great businesses grow over time not overnight.

    Mark Alefounder

    Property Tribes Financial Services. 07717647928

    mark@ptfs.co.uk

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    Mr Mark Alefounder

    Mortgage & Protection Broker

    Optimum Independent Financial Advisers

    Mobile 07716 647 928

    Tel: 01206 366700

    http://www.optimum-ifa.co.uk

    The financial regulator, the ‘Financial Conduct Authority’ designates that there are two different types of financial advisers, ‘independent’ and ‘restricted’. The status of an adviser firm will affect the type of advice that is given. A restricted adviser firm can only recommend certain products or product providers, whereas an independent adviser firm, such as Optimum, is able to consider and recommend all types of retail investment products and/or providers that could best meet clients needs and objectives. Optimum Independent Financial Advisers offers genuine unbiased and unrestricted advice.

    Your home may be repossessed if you do not keep up repayments on your mortgage.

    Optimum Independent Financial Advisers is authorised and regulated by the Financial Conduct Authority

    Financial Services Register Firm Reference Number (FRN): 223293

    © Copyright 2017 Optimum Independent Financial Advisers. All Rights Reserved

    I would personaly look at WHY you want to quit your job? and WHY you got into being a Landlord?
    If you are making a good income on employment and a letting agent is only charging 10%, is it worth scrapping your job/income to start anouther job.

    What is the end Goal? is it to retire with enough funds in the bank OR is it a career change.
    If having BTL gives you the flexibility to change career - should you be becoming a self employed landlord OR is there other employment you can seek.
    If being a landlord can support your living - then are you quiting your job to be a landlord - or - does it give you the opportunity to set up a Business.

    I am all about multiple streams of income, im not an "eggs in one basket" kind of guy.

    I had a lender in today, discussing all they offer for Landlords and how they can fit into our product matrix. Then we got onto "profeshional landlords" and first thing she said was "our minimum income can not include rental income".
    Remember Item 3 on Vanessa's list and talk to your mortgage broker about your options for Finance Currently and After you quit your job.

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    THIS PROPERTY TRIBES ACCOUNT IS NO LONGER USED. DO NOT SEND PRIVATE MESSAGES.

    YOU CAN REACH ME AT BESPOKE FINANCE for HMO Mortgages, Cheap Life Insurance and Limited Company Buy-to-Let on 08009202001

    Lots of good points made well. 

    The key point made by both Mark and Adam that investors need to be very clear about is that lenders will want to see a minimum income from another source other than rental income.  If you want to quit your job and beable to keep borrowing, you need to be crystal clear about that and take it on board. 

    Dave left full-time employment back in 2003 when we had 27 properties... We could have afforded for him to give up sooner, but for lenders' wanting 3 years accounts showing a good rental income.  At the time, other income wasn't required but luckily now, we have other income due to managing some properties for two of my brothers.

    Adam makes a good point about asking yourself what you actually want.  We don't feel like "we're living the dream" as we work at our portfolio and to my mind, it's never a good time to take your eye of the ball.  Look at all the pandemonium caused by the tax changes announced in the Summer Budget 2015.  We've been very busy ever since, preparing to deal with that: refurbishing some properties for sale, some for re-letting for higher rents, and with "trying" to move some properties into our limited company - which I have put so much work into (as has my broker!) not to mention solicitors... but I'm just now beginning to lose hope of beating the deadline with this, despite me starting on the mission months ago - solicitors and lenders have just been too slow.  Hey ho.

    I find there are many benefits to being self-employed and believe property is probably a lot less like hard work than most other businesses we could've got into.  When all's said & done, it's also a more stable asset. 

    On a personal level, I have often been glad of having a less stressful life than if I'd had to 'go out to work' all these years (I gave that up about 27 years ago!)  I don't deal well with stress.  I've been glad of being able to be there for my children more than I would've - and that Dave has been around for them too.  I was glad to be available to support my mum for years in her old age - able to visit her weekly, even at 100 miles away - particularly since she was alone after my dad died.  I'm one of eight children, but none of the others could be there for her as much as I could - apart from one brother who's local, after he retired.

    These days, I have become interested in the subject of "healthy ageing" and diet - after realising I was getting old & fat!!  I'm so glad to have time for this - reading inspiring books about it, running on my treadmill whenever, trying different foods and diets....

    And for planning, strategizing - or thinking, as Jonathan would say:-) 

    I find it interesting that our three children, all now grown up, have seen how we live and all have decided that they want to make other choices.... which I say to make the point that it's not all sitting on beaches and sipping champagne, it's just a lifestyle that may not suit everyone.  And there are downsides - no work colleagues, sometimes even feeling forgotten by the rest of the world. I have whole weeks when I don't go out much.  I'm just home alone!

    But that's ok with me - I'm happy with my own company and that of the radio at times, or a good book.  I've always wanted peace and enjoy the garden too. 

    It's fun to watch the kids grow up and to hear about their friends also.. Sarah who always wanted to marry someone in the forces and is now doing.  Sophie who wanted to be 'just like everyone else and go to work' who is now doing that.  Another who wanted babies.  Matthew who wanted to have a place of his own and now has.  Chris who wants to save the world... and is working on it;-)

    I think it's just so important to know what you want, what you really really want - as they say.  So often it seems to me people 'think' they want what we've got, but in reality it clashes with other wants and greater wishes that their lives then gravitate towards. 

    Do you get what you're hoping for? 
    When you look behind you there's no open doors.  
    What are you hoping for?  Do you know?

    Angela

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    Author of The Complete Guide to Property Strategies and The Complete Guide to Property Investing Success
    Learn more at http://www.completepropertysuccess.co.uk

    I also post property updates on my Facebook Page

    "It is the small decisions you and I make every day that shape our destiny" Anthony Robbins

    The key point made by both Mark and Adam that investors need to be very clear about is that lenders will want to see a minimum income from another source other than rental income.

    Most lenders do but there is (or was) an exception. I decided to go into property after losing my job in 2013. I had inherited some money earlier that year and wanted to make a bit more than the banks were paying. I could not get a mortgage to start with, but was able to buy three properties for cash (about £270k total). After 6 months experience as a LL TMW were willing to give me a mortgage or rather two:

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    If yu can get out of the rat race its great you can not buy time ?? and life is short 

    THe golden days are over easy money easy mortgages are gone

    I am gald I started in 1982 and I have no regrets

    But the avarage person now will find it hard to follow in my footsteps

    This govt wants the working and middle classes to work till they are 75  and have a short retirement

    They have knifed us in the back and they are smileing

    I am no longer a property Investor (its not worth it ) I am now a property manager who will run the property in the most tax efficant way I can

    But my Buying days are over unless we see a huge crash

    BTL was fun but now its not its a worry becuase you just dont know what will happen in the future

    Sorry to sound Negitive but its how I see the future

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.