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  • Property-a-holics

    The Landlord is dead! Long live the Property Investor!

    Controversial landlord Fergus Wilson has told Property Tribes in this exclusive interview that the era of the landlord is over and we are entering a new era where people will consider themselves "investors" rather than "landlords":





    Share your views here as to whether you regard yourself as a landlord or an investor! Smile

    This interview comes with the breaking news that more people are renting homes from private landlords than at any point in the last 30 years, a think tank has found.

    View our other exclusive interview with Fergus on Summer Budget 2015 tax changes >>> here.

    Fergus is also active on our other thread about 9 irrefutable reasons why property remains a viable investment.

    If you are concerned about tax changes for landlords, please join us at the BIG TAX DEBATE at the Property Investor Show on 9th October at 4.00 pm.

    Preview of the Property Investor Show and book your tickets.

    A reminder of:

    Property Tribes Action Plan

    1. If you have not already done so, write to your MP to let him/her know about your concerns.

    2. Have your views heard on the Finance Bill by writing to the Public Bill Committee. See >>> here for further details.

    3. Send your concerns and stories to Richard Dyson at the Telegraph. He is looking for real life situations and landlords to record video interviews with. Write to him at richard.dyson (at) telegraph.co.uk.

    4. Join a landlord association because there is strength in numbers! Property Tribes is a partner of the Residential Landlords Association who are lobbying Government very hard on this issue.

    5. Sign the petition against these tax changes >>> here.

    6. Create awareness of this issue on the social web by sharing this post on Facebook, Twitter etc. and on all the property forums and groups you frequent.

    You can cut and paste this ready-made social media up-date:

    Join the property community in fighting the recent tax changes for landlords. The fight back starts now! http://ow.ly/RYujr #property

    This issue affects not only the 2 million landlords in this country, but also their hundreds of thousands of tenants. It also affects the livelihood of lettings agents, and service providers to the property industry. We must all unite against this and create awareness so that our voice is heard at a political level.

    [Image: house.png]Budget related content:

    Summer Emergency Budget from a landlord and property perspective

    Budget beating strategies for landlords

    Budget changes - what lies ahead?

    5 ways to beat the budget

    65% of landlords considering rent rises following the Budget

    New investor - is it still worth it - calculations?

    Government response to Petition

    20% of landlords are thinking of quitting BTL due to recent tax changes

    Petition Committee response to Petition

    9 irrefutable reasons why property is still a viable investment + Landlord Survival Plan

    Tax changes - existing portfolio landlord perspective
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    I'm not so sure, I think that business model he discribes, of buying for purely capital appreciation is completely outdated and only works if you bought 15-20 years ago before property was an asset class, I don't think in the next 15-20 years we will see even half of the capital appreciation that took place in the previous 10-20 And especially with the next tax rules for those not incorporated and an interest rate rise at some point, you would go under.

    I use HMO's, I buy right, I fully refurbish, and I get maximum cashflow, a lot of protection from interest rate rises etc, but I still own the property, and can acquire at the same rate as an "investor" can, so I am benefiting with monthly cashflow and in the long term from capital appreciation, which I just see as a bonus, I don't understand why you would choose only to rely on long term capital appreciation.

    So why would you not sweat the asset? Especially in the current climate. I think it's very foolish to have a strategy relying on speculative capital appreciation.
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    Thanks for being the first to comment MTW.

    I agree with your views.

    Cashflow is money in my pocket today. Actual money that can be spent.

    Capital appreciation is completely speculative and cannot be banked until you exit (unless you release equity along the way).

    What I do agree with Fergus on is that landlords should take a long-term view and expect to be in a business relationship with a property for 15 to 20 years.

    To be honest, the tax changes have thrown the whole landlord landscape into disarray and I am very uncertain of the future.

    Fergus has enjoyed properties going up from £35K to £335K in 20 years. Like you say, the days of that kind of capital appreciation may be long gone and no one can predict the future.

    I think Fergus is describing the mentality of many people who buy a property and put it on the backburner as a pension hedge. They are happy for it to just "wash its face".

    So, in some ways, Fergus has the mindset of an amateur landlord?! Many amateur landlords who adopted this approach went bust during the credit crunch or are now what is known as "zombie landlords".

    Property Tribes will always advocate cash flow. Capital growth is a bonus. If you don't have cash flow, you may not stay in the property game long enough to enjoy any capital appreciation that does come your way!

    It's certainly good to debate this topic and hear lots of different views. That way we can all learn and help determine our own personal property strategy as, one thing we can all agree on, is that property is NEVER a case of "one size fits all"! Smile
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    (05-10-2015 12:37 PM)Vanessa Warwick Wrote:  So, in some ways, Fergus has the mindset of an amateur landlord?! Many amateur landlords who adopted this approach went bust during the credit crunch or are now what is known as "zombie landlords".

    No problem Vanessa, it's a good discussion.

    On this point you made, with all due respect to him I think he does, only going from that interview. Like I said, up until 2008, I don't think you could have had a more perfect time to own property, or a more forgiving time...

    Today's environment I think is completely and utterly different, and like you said, if you go about it in that way, with properties just washing their face, with low rental yeilds, you will get burnt.

    Like you say, everyone's strategy is to suit them, but the amount of my friends who ask me about getting into property who almost all have that mindset that any property, anywhere, at any price is a sound investment for the future. Is astounding. Of course I try and explain why that might be flawed if they are interested.

    But I am surprised to hear it from a veteran landlord who has obviously been successful, but like I say, maybe it's down to him operating in a much more forgiving time, when property skyrocketed into being an asset class.
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    Hello,

    I have just properly signed up, but have been reading regularly the exchanges on this forum which I find very useful and informative.

    I actually agree with Fergus. I have always considered myself[/font] a property investor, who has a significant portfolio in London. It might be that people who invest in property in SE and London are more concerned with capital growth than yield. The net yields are moderate in London, but what I closely watch is the value of the asset. My tenants tend to work in the City in banking and media sectors. Many of them are here on 2 - 3 year contracts, then they move on or may decide to buy. They choose to rent rather than not being able to purchase. They expect top quality furnishings and service which we provide. In return, we get typically a year's rent paid in advance which helps the cash flow enormously. With the new tax regime, I would not be so concerned as long as some of the properties just 'wash their face' for a while. It is a long term journey.
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    For most of us it is not one way or the other; an oversimplification being:
    in the south if you invest for property appreciation you are landlords as a byproduct of investing in property.
    in the north if you invest for rental income you are property investors as a byproduct of being landlords.

    The Landlord is far from dead, if anything the type of short term property investing remains nonviable. Long Term property investment keeping care of good tenants and maximizing rental yields with a long term exit strategy is well and alive.

    I think Fergus is having a hard time, from buying new builds entering the property crash and negative equity, to then finding issues with LHA tenants, evicting them and getting in foreign tenants - to now find he is has a job of internal border force to where we continue to be him trying to sell his properties.

    From his perspective being a landlord could well be dead.
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    THIS PROPERTY TRIBES ACCOUNT IS NO LONGER USED.
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    YOU CAN REACH ME AT BESPOKE FINANCE or MY TEAM AT 08009202001


    I buy properties for the income they provide me.
    The only one I am planning to sell for the capital gains is my former home.
    The rest will provide my pension.
    I use a letting agent so they are no trouble to me.
    I consider myself a landlord.
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    It is mentioned a lot in this video that would be landlords will be the main people put off from investingredients in property yet is it not the opposite. Is it not those landlords who have a substantial portfolio which brings theme over their tax threshold that would be stung more?

    I believe he is one of those of got lucky in terms of the time and era if you like that he bought in but again one thing I have learnt is to be very careful who you take advice from in this game regardless of that persons past success. A lot of what he says in my opinion isn't right.
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    Yes it is right that the Mid 1990s were kind to Judith and myself. Could we replicate it again. Not in the current circumstances.

    The Business Enterprise Scheme was a great idea that came along at the wrong time. Then came the Buy to Let Interest Only Mortgage.

    The buy to let Interest Free Mortgage is what made me. With 85% LTV mortgages I only had to put in 15%.

    I would but a property for £30,000 at auction and it would be valued for mortgage purposes at £45,000. I would then draw £38,000 and have £8,000 for my equity contribution to my next mortgage.

    That is 20 years ago. It is not possible to carry on like that in 2015.

    I have made my money now I intend to enjoy it!

    Fergus Wilson
    5th October 2015
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    I understand the point that Fergus is making to be about focus, strategy and direction.

    Basically, when you get into buy to let, it's a question of looking at the road ahead and deciding on your priorities: a primary focus in maximising income may well be suggestive of going down the HMO route, but if you want to maximise capital appreciation as a top priority that's suggestive of aiming to buy as many properties as possible. Since HMOs are more work, they may tend to be a hindrance to buying lots of them...

    I often say to Dave something like: "I've just got so many balls in the air at the moment!!"

    Or he'll say to me: "I feel like a plate spinner!!"

    Sometimes other people say to us: "Why don't you run your properties as HMOs, you'd make more money?" To which there's a two word answer ** !!

    [** "No thanks"!]

    When we put some properties on the market recently, someone was sniffing around wanting to buy them all. He met Dave and they swapped stories; this guy said he's got lots of properties and runs them all as HMOs. His plan (initially) was to buy ours, get the tenants out and turn them into HMOs. But as they got talking, it turned out he has staff, offices, employs a whole maintenance team permanently and has all these overheads...

    He was amazed when Dave said we don't employ anyone or have offices, our overheads are very low and our income is high too. We do use certain tradesmen quite a bit but without employing them. In the end, the guy was wanting to look into keeping our tenants and doing things our way! [However, it all became a bit academic as we weren't willing to sell at the discount he was after!]

    We've always been hands-on, so definitely consider ourselves both landlords and investors. If I had to choose one, I'd probably say I'm a property investor and Dave's a landlord. Or as he'd say, I buy them then he gets lumbered with the work for ever more:-) As if I don't help!

    Angela
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    Author of The Complete Guide to Property Strategies

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



    1145 views

    So where are we heading? For the would be landlord or property investor is there any spare capacity in the market for you?

    In the early 90s the Government of the day introduced the BES scheme. A very good idea that did not work due to the specific economic climate. It had good points. Right idea, wrong time.

    At the time Britain was flooded with Single Mums and there were insufficient houses available and plenty of homeless people as there are now but houses were empty. They do not appear to be empty down south any more. Up north it is a different ball game.

    We need to build more houses. Well both Cameron and Corbyn recognise that as common ground so we do not have empties waiting to be filled as we did 20 years ago.

    HMG will need temporary accommodation in the format of Prefab buildings but steer well clear of that as an Investment. Modular flats were a 1970 formula that failed miserably and had to be knocked down. Some bright Mandarin will have that as the answer. Forget it and do not invest in flats let alone modular flats. You are not going to make any money!

    There are various nations in Britain. Up North and Down South, those with jobs and those without jobs, those who are homeless and those that are not, those that live in houses and those that do not.

    George Osborne yesterday announced that Local Councils would set the Business Rate and keep the revenue. That is a very clever way of ensuring the Tory Government does not get the blame for the empty town centres.

    I have most to do with Ashford and Maidstone. The economy of both is absolutely brilliant but they both have many empty shops.

    By the way do not purchase flats above shops!

    You must ensure you carry out your Due Diligence. You need to invest in a commodity that will increase in value at a steady rate, outpace other investments, be as safe as the Bank of England (not Ireland). Forget Solitaire, Property is the only game in town.

    I do not know enough about anything other than Buy To Let. It is my specialist subject for Mastermind.

    When rented houses change hands the Government reaps in 28% or 18%.

    Some of you will be buying for a pension or for a Trust for future generations. If the latter then there is no GCT for the Revenue.

    You select Rental Income or Capital Growth and decide whether you are a Professional Landlord or a Property Investor.

    Do you want to be where the bullets fly or have a quite life? I live out in the Country near Maidstone and if a Blackbird flies by we have a Party!

    If you are the owner of a HMO then you are on duty 37 hours per day, 485 days a year!

    I have been asked to say a bit about immigrants. Firstly they are essential to the economy of Britain. The North of England is not essential and I for one wish they would declare Independence from the South of England and go and paddle their own canoe. Indeed I think it should be the South of England that declares Independence from the North!

    The North is a drain on the resources of the South. Time to boot them out!

    Immigrants contribute more to the economy than the North. Immigrants give a net gain and the North a net loss.

    Immigration comes in two forms. 1) Legal Immigrants and 2) Illegal Immigrants. The former are able to work and have a house or flat and the illegal are not.

    If a Landlord were to house an illegal immigrant the penalties are quite horrendous but perfectly correct. The answer is simple and that is do not house Illegal Immigrants.

    In 2013 I was convicted of punching a Lippy Young Man under half my age in Folkestone. I was convicted at the First Instance and at Appeal but what did not come out was what it was all about. The Letting Agent was not carrying out his Due Diligence and checking the Money Laundering Requirements which are the same as the Requirements for identifying the identity. The Agent was meant to check the Signature against the Passport and verify the photograph.

    It was nothing to do with a boiler as reported. The tenant was evicted 8 months later and never raised the issue of a boiler disrepair again. It was a control issue not disrepair.

    The Police had attended the Letting Agent a few days earlier after a Guarantor had reported to the Police that he had not signed a Guarantee Document I was pursuing him in the County Court over.

    It turned out that the Letting Agent had not met the tenant and sent the tenancy by post to be signed and returned. The Letting Agent had signed to confirm witnessing the signing of the tenancy and the District Judge in the County Court raised the question of how did the Letting Agent manage to witness if the document was sent out by post?

    My legal folk are of the mind that since that specific case has been settled and money paid to me by the Agent there is an issue of the soundness of the conviction given there was no injury and the background of falsehoods made by the Letting Agent and Police Officer who lost all the evidence and was found to have committed Misconduct in an internal Police Investigation.

    I write this in the knowledge that Theresa May is giving her speech about immigration today.

    She may come up with Good Ideas but Kent Police do not show Due Diligence! They did not correctly investigate!

    I now turn to Asylum Seekers. They come in two formats. Those who want a safe refuge in any Country in the EU and those who want a safe refuge in the UK. The former seek Asylum and the latter are illegal economic immigrants.

    Britain has to close the doors on the stream from North Africa albeit we all appreciate they wish to improve their lives. Those who mare genuine Asylum Seekers when processed should be given Asylum.

    I am very clear holding centres and interrogation centres should be in the Country of First Landing. The UK does not want the problem of rounding up all the illegal immigrants and returning them to France. Better to only allow in those approved. Clearly the process needs to be speeded up.

    The Landlord needs to see some form of Certification that any tenant from a non EU country has permission to be in the UK before giving a tenancy.

    I now turn to Little Poland. I think particularly of the area of Maidstone called Little Poland or Klein Ungaria.

    There are such areas in most towns in the South East. Maidstone is no different at all.

    Shops crop up selling speciality foods and integration is not taking place because they have no money. They live in the cheaper houses where more affluent English folk have moved out. In Maidstone it is old artisan houses.

    I stopped buying such houses 18 years ago albeit they give a fantastic return. I purchased one at £15,000 now giving a return of £14,400 a year! That is a brilliant return of course.

    There is a couple who have been there for about four years. No children and not packed out with East Europeans.

    Intermarriage between different nationalities is rare. Children are produced at the same rate as British people of one per couple. The Schools cannot cope and all support services are overwhelmed.

    With all the new building in Greater Maidstone there is not a cross section of people. It is indigenous British Folk with very deep pockets.

    So we build more and more houses until the South East disappears in a concrete slab. Is that a good idea? I think not.

    As far as I can see the building force is very much East European labour who are here to build houses for the East European Labour to live whilst they build more houses.

    In Maidstone we have Polish Ghettoes, Hungarian Ghettoes, Romania Ghettoes Housing Benefit Ghettoes and English Ghettoes.

    The Housing Benefit ghettoe
    s are Social Housing now reserved exclusively for English people and for those who cannot afford a Market Rent but only a Subsidised Rent. Of course if they can afford a Market Rent it raised the issue of what are they doing living in Social Housing.

    They are precious houses to invest in on the market. There is no stock and the owner occupier is currently in the lead.

    On the whole new build in Maidstone is too expensive to invest in at present.

    What about retirement homes for elderly folk to retire to and free up normal houses? What a great idea!

    I seem to remember I suggested in 2003!


    Fergus Wilson
    6th October 2015
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