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I hope things are going well for you.
I have been kindly invited by Vanessa to give an update on where I'm at with my portfolio and thinking, as I haven't posted for a while.
The tax changes announced in the summer budget 2015 which sent the property world into deep shock, prompted me and Dave to start selling, as some of you may know. We sold the first house that became empty and continued selling as properties became empty thereafter. This was happening at a rate of about one a month naturally as tenants moved on.
A couple of times, we also moved tenants who wanted a bigger place (LHA entitlement goes up as they have more kids) from flats to 3 bed houses then sold the flats, which suited us as we prefer to keep houses.
Since July 2015, we've sold 25 properties to date. That's a quarter of our portfolio. We also moved 8 properties into limited companies.
We used the cash out (after allowing for CGT payments) to pay down mortgages and this, together with continued price rises over the past two years, has seen our LTV reduce from around 75% to 50%. Given that we have very good cashflow, we've done more than enough to be reasonably safe; but once we got a taste for selling, it started to appeal as a way to improve the portfolio through culling, while reducing Dave's workload. We still intend to sell flats and non-local properties, but from now on will keep local houses.
Meanwhile, having been on a buying mission for the last twenty years, as the selling started to impact by reducing our workload, I began to feel that I'm not (quite!) old enough to retire. Yikes!
My life is too quiet these days, if anything but I took up running a couple of years ago, which helps to fill my time. I did a 10k race in London earlier this year and have recently put in for the Brighton half marathon in February 2018 - if I can manage it!!
I realised I like to do things that involve challenge and self-discipline - and if it's to do with property, all the better! So I decided to make a mission of writing another book. Well, I was initially invited to by someone who regularly buys copies of my first book which is getting rather dated. I thought about updating it, but I'd rather write a new book and leave the first intact.
While my first book was based largely on our own vanilla buy-to-let experiences, I want the next to be an exploration of the various strategies that abound today because it is harder to get into basic buy-to-let and the tax changes don't help, therefore many people are looking at other ways to get involved in property. It's an adventure for me to look into it all and has inspired me to get out more and see what others are doing.
Through this, I have become particularly interested in crowdfunding and have joined one of John Corey's mastermind groups to explore that further. It's a very exciting field.
I struggle along the way with the writing... I get backache some days and I know I'm not the brightest or best of writers, but I have the time and enjoy the process. I learn through the quest too and hope to help others if I can - for what it's worth. I don't think 'I'm great' as I fear some people may believe, in fact I struggle with self-confidence but always fight it! It's all part of self-discipline to me...
I have learnt something through Park Run about being clear and at peace with my own limitations: I normally come in position around 350 out of say 500 runners! At first I found it off-putting to be so low ranked, and it was strange getting "lapped" by many a young man (which sounds interesting only if you don't run, lol!) But it's ok. I'm just doing my best and that's all any of us can do - hoping to inspire some, however few, while achieving what success we can.
Thanks for the invitation to write this Vanessa.
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
Thanks for the up-date Angela. Very interesting. I like the idea of "improving the portfolio through culling".It can be quite hard to sell a property as many of us have an emotional attachment to them, but you have to do what you have done, and put that to one side and look at the cold hard numbers, as numbers will never lie.We have a good video on this topic:Good luck with your running adventures and your new book and thanks again for taking the time to up-date the tribe!In case anyone missed it, here is a reminder of ....Axe the Tenant Tax Awareness Week 2017 - powered by Tenant Tax campaignLaunch of "Axe the Tenant Tax Awareness Week" Up-date from National Landlords AssociationLandlord Gemma Shinh on impact of S24 on her Up-date from Residential Landlords Assoc. Up-date from ARLA/propertymark
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Culling is difficult - I agree that there definitely can be an emotional attachment.
My very first Liverpool purchase was sold Friday just gone. It hasn't thrown off cash but it has made us OK money over the last 12 years. The option was to redevelop as a 5 or 6 bed - something I am loath to do due to oversaturation, or cash out and pass the baton to a new investor to make their mark. I did put in a lot of my own time on the refurb, and I was sad to pop in for the last time. But..... every property we buy will be here long after we are dust, and it only has to serve a purpose to us while we are here. Once it's purpose has been served, get rid.
This sale was a direct result of Section 24, as the property was in personal names.
I know how you feel Simon. I often find myself wistfully singing "One day this will be someone else's dream" as we're preparing each property for sale.
But I quite like the thought of passing on the baton and the reminder in the lyrics to never forget where you're coming from and that we're not invincible...
Hi Simon I am currently doing what I can to learn about property investing, managing and sourcing.
I am from and live in Liverpool and noticed you seem to be very successful and have built a great business in our city.
What you are currently doing is where I would like to be in years to come. I just wondered if you have the time to speak to me and help me on my way with any tips and advice.
I have been involved in property in different aspects for about 11 years. I am a qualified plumber and have done a few house refurbs with a small team. I have been reading books, listening to podcasts and reading up on the internet to learn what I can but I feel that someone I could ask individual questions would be a massive help.
I don't know the best way of speaking either on PT or I could give you a contact number or even meet up if you had the time. Whichever is best for you Thanks
Interesting: What sort of buyer were you selling to (- if you knew)? Other landlords, speculators, developers or home-owners, please?
And can I add what areas of the UK? The south-east appears pretty flat at the moment!
Before the 3% stamp duty surcharge in April 2016, we were selling I'd say 50 / 50 to homeowners and investors. Since then, it's been more homeowners although we sold one recently to a cash investor. I don't think our properties are suitable for developers or speculators. We've generally done them up as best we can before selling - though having said that, I try to judge how much work is appropriate to do on each depending on the exact property. Sometimes it's good to let buyers feel there's some value left for them to add:-)
Our local properties have sold easily as the market around here is determinedly resilient. We have reduced the price on one or two, but that's down to the agent being ambitious for them initially and given the great capital gains, it's no problem. Non-locally I've just been glad to get rid frankly, with little hope of capital gains other than when I'd bought well below market value.
Best of Luck and enjoy spending your profits which ever way you find fit
Its a great shame such good landlords or leavening the field of play
The sector will be the loser one way or another
Prices are rising in the NE just when I don't want it
I have sold three to my company and each one was up valued by the surveyor and I thought I was selling at a market value be he increased the value not by much just 5k but still higher
so a little more Stamp Duty payable.
Learn Change and Adapt ?????
Thanks for your thoughts.
Good that you've sold some to your limited company. I suppose if you do that slowly enough, the modest capital gains won't be taxable at least.
All the best,
It's an ill wind when your glad you have no capital growth we live in a mad world D L x