Travelling and Property blog

My “Vanilla” Buy-to-Let Project Investment

I had renovated a few houses in the past and had a few buy-to-let properties many years ago. At the time I had small kids and had just landed a full-time job. With my husband also working full time and often far away, it became impossible to manage it all by myself. So, we decided to sell and buy a flat in Brazil for our use when we go to visit.

Since then, I’ve been working on the property industry, but not in property development. With adult kids now out of the house, I thought it was a good time to re-start my journey into property development.

I started looking for a project at end of 2019, before the pandemic begun. I really wanted something more substantial that I could profit from now, and as a long-term investment for our future. However, I didn’t have enough capital to invest in more exciting projects and I could not find an investor to go with me into the journey at the time.

Then came the pandemic and things were in a standstill for a long time. Many people, including me, thought that with the pandemic the prices of properties would come down, and that there would be some good bargains around.

So, I held on for some time, just looking at the market to see what was going to happen. How wrong was I? With plenty of people around wanting to move to better areas, as well as plenty of investors vying for the same small pool of properties, house prices skyrocketed. The few properties in the market were flying out of the shelf like hot cakes.

In view of that, I thought that if I wanted to get back into the property development world, I needed to act fast and do something about it. I decided to look for a cheap house in need of modernisation, a “vanilla” project as I call it, instead of a more ambitious projects such as conversions, flats, new houses, etc.

I don’t consider replacing a kitchen, a bathroom and general refurbishment of a flat/house to be “proper” property development. Property development for me is to uncover the potential of a building and add value to it. Examples would be the conversion of a commercial premise into flats, redevelopment of a large site with one house to two or more properties or the demolition of a condemned property and re-build better than what it was before.

Money is made when value is added to the property. Just refurbishing a property, as is, will not normally bring immediate returns. Instead, we must rely on capital growth and rental income for quite a long time, to see any appreciable profit. However, as I said, I didn’t have enough money, so I did what I could do with the capital I could invest.

Throughout 2020, I investigated various potential projects, but for one reason or another, it did not work out and by the beginning of 2021 I still did not buy anything. In the meantime, I opened my property company “Tamazan Property Holdings Ltd” (from my black Labrador registration name: “Tamazan King William”) in preparation for the future.

I persisted on the search and in May 2021 I had my offer accepted on a 3-bedroom terraced house in Kings Lynn, Norfolk. Great location for a buy-to-let, close to the local hospital and town centre, larger than the usual 3 bedrooms around. It would appeal to a small family or sharers on the rental market.

The procedures for the purchase started and it took ages to go through. Everything was working in slow motion and took double the time it used to be before the pandemic, but in September 2021 I finally got the keys.

I immediately started contacting trades people and booked appointments with 3 companies of each trade. I had 3 plumbers, 3 electricians, 3 decorators, 3 windows companies and 3 builders quoting for the necessary works, but pants! Most of them could only do the works by the end of November and one of the builders, January/February 2022.

I had to quickly decide who was doing each job taking into consideration the prices. I picked the cheapest ones that could do it earlier. I appointed a local Polish builder who was really keen to start soon and gave me a very good price comparing to the others. Did I check the references and their previous work? No, I didn’t, I just went with my gut feeling, I had no time for that and if things were to go wrong with them, I would have to use my charm to get them to do the job without paying any money in advance.

They started on site with the stripping out and removal of the old kitchen and bathroom and creating a new utility room from part of a storeroom already in place.

I ordered everything for the kitchen/utility room/bathroom and WC from B&Q. They were having a sale at the time and gave me a very good deal and extra discounts. The problem with B&Q is that some of their products come from different suppliers and in separate deliveries.

I was given various dates for delivery of different things. I was also told that I could change the date of delivery if I was not ready for it. I was sure I was not going to be ready for those dates but when I went to change the dates, the only stot available for the delivery of the kitchen was at the beginning of December. I did manage schedule better delivery dates for the other items though.

I was very annoyed with B&Q to the point of going to Howdens and getting a quote for a similar kitchen. In the end, I had to swallow their delivery date for the beginning of December, because Howdens wanted to charge double the price I’d paid to B&Q. So waiting until December it was…

The windows and doors would only come at the end of November and the decorators would only start on site at the end of November too, so no advantage in paying more to have the kitchen earlier. The builders were busy installing the bathroom, WC and utility room as well as doing other jobs around the house, so they had to leave the kitchen for later.

Work on site was progressing and we had the central heating system replaced. The old system was one of those warm air blowing type of heating connecting into an asbestos pipe going through the roof. I had to pay for a separate company to come and remove the asbestos pipe at the same time the plumber was removing the heating system. He then installed a combination boiler next to the outside wall in the kitchen and installed radiators in all rooms in the house.

I wanted pipes to be boxed in and the boiler installed inside a cupboard in the kitchen. However, the plumber did what was easier for him and left lots of pipes on view. I was not very amused with the result but accepted it just to get it done and dusted. I would ask the builder to cover up the pipes somehow. I will not use this plumber again.

The electrician also started with the first fixing and the rewiring. Before I realised, we were in the beginning of December and the kitchen was delivered.

The builders cracked on with the kitchen installation and the decorators were also on site, correction, 1 decorator was on site, stripping the wallpaper. It took another week for them to send more people to help around and press on with the decoration. This delayed things a bit and the results were not very good. Because they were rushing to finish it all before Christmas, they cut lots of corners and the work was sub-standard.

I was furious with the manager and refused to pay anymore money until the work was rectified and done properly. They had to return to site 3 times to fix things and until the end I still think the work was not up to my standards, but acceptable. I will not use these decorators again.

I needed to get on with things, so the electrician came back for the second fix, the floor finish was installed everywhere, the garden was tided-up, new fence and new borders erected, the blinds were installed, and little details were taken care of. Finally, the house was ready by the middle of January.

The electricians were very good, and I would use them again. The builders did a good job too, but I needed to be on top of it to make myself understood and to have things done the way I wanted. The result was a cracking job though, and I was very pleased.

Now that the house was finished, it was time to find a tenant to move into the lovely, refurbished house.

I friend of mine told me about Open Rent, which is an on-line platform that offers rental services such as advertising the property, preparing the contract, taking references, administering the deposit money and much more. They can do everything, and you do not need to worry about anything. You pay in accordance with the services you want them to do. I decided to use their services and opted for the package of advertising and preparing the contract as well as administering the security deposit. These services would cost me £49.99. There is a fee of £20 to check references for each person, that is paid apart. I showed the house myself and will do the management myself.

The exercise of renting the property proved to me more complicated than I was imagining. When the house was advertised on a Tuesday, I immediately had people interested and booked views for the weekend for 8 prospective tenants.

After showing the house around, all of them wanted it, but I had to choose the ones, who I thought would be most suitable as a tenant. It was difficult because each one of them had a bit of a nag that I didn’t feel very comfortable with.

For example, there was a doctor from the hospital that wanted the house to bring his family to live in the UK from Sudan. The only problem is that he had 5 kids under the age of 5. I didn’t think the house is suitable for 5 kids, it is only a 3-bedroom house, he needs a bigger house.

I had another couple that really wanted the house, but the man was a pensioner, and the lady was out of work, so I think it would be a bit of a struggle to pay the rent with only his pension and their story was a bit too complicate for me to get involved with, so decided to skip them.

I then decided to go with a lady with two teenage sons. She said she had her own recruitment company and was separating from her partner. She also said she could comfortably afford the rent and bills by herself and could show proof of income. Her story was quite believable, she seemed very trustworthy, and I thought she would be perfect to live in that house. So, I asked her to provide the details to have her references checked.

Open Rent carried out the referencing and they came back as declined. It turned out that she had a CCJ case in her name, her company was less than 6 months old, she didn’t have any accounts to show, and she could not provide a guarantor either. I decided she was too much risk and did not let the house to her.

The house was back on the market, and I had booked another 6 viewings for the following weekend. Again, after screening all the prospective tenants, I picked a couple with a young baby. He was an engineer, and she was working part-time at Audi. They seemed to be good people and the fact both were working, even though she had a young baby, gave me confidence.

I paid for the two of them to have their references checked. The references came back, and they were declined. The guy was bankrupt, and the lady didn’t have enough income to have the tenancy on her name. Another perspective tenants that I had to reject.

The house was back on the market again. I showed it around for some more people and this time I picked a group of friends that worked as nurses at the local hospital.

They are from the Philippines and had been in the UK for a year already. They were living together in an HMO, but they wanted to move somewhere for only the 3 of them. They were all permanent staff of the hospital and seemed to be nice people. For the third time I asked for details to have the references checked. This time the references came back without any issues for all of them.

They paid the security deposit, one month’s rent in advance and I gave them the keys. They moved in and are happy in the property. I finally found suitable tenants and I hope I will not need to worry about it for quite some time.

It was an easy and nice project to take on and I really enjoyed the whole process, but I wish I can find some means to take on something more substantial and fulfilling on the learning side of things, as well as on the financial side.

I will keep you informed on any new projects coming up on the horizon.

PS: If you want to invest in the UK property market and is looking for someone to joint venture with, please contact me to discuss any possible future partnership.

If you enjoyed reading this post you might also like to read:

Hello! I’m Rose and I’m the “Travelling Surveyor”. If you click on the photo you can learn a bit more about me. Join me on my travelling adventures by reading my posts and subscribing to my blog.

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