We loved this story in The Guardian over the weekend. Buy to Let can sometimes get a bad name, as do landlords! It’s so nice to read stories such as this to show that it really can work.
In 1996 … Del Brown, a 32-year-old carpenter, decided to set up a business letting houses. He bought two small, two-bed properties in Bristol for a total of £29,000. On each he put down a 30% deposit – less than £4,500 per property.
Today, his portfolio is worth around £40m and is invested in developments throughout central Bristol.
There was hardly anyone else doing buy-to-let in 1996 – everyone told me I was mad. There was all this negative press about houses being smashed up by tenants, and the difficulty of getting them to leave. But I’d been repairing properties for housing associations and knew there were lots of good ones out there. I did the numbers and thought I could make a small profit on the rent and, if I renovated them myself, enjoy some capital growth too.
It was hard to get a buy-to-let mortgage back then. There were no specialist lenders – until the Housing Act came into force in 1996 it could be very difficult to evict a sitting tenant, and most mortgage lenders were too scared to lend to landlords as a result.
But I knew how to renovate a property, so convinced HSBC to lend to me. I scraped the deposits together using credit cards. As prices rose I released equity to buy more. I worked long hours – sometimes from 7am through until 3am – renovating the properties for rental. Before I’d even finished their prices had increased.
By 1998 I owned six houses; by 2000 I owned 20, and it suddenly became easier to get buy-to-let mortgages. People started telling me the market was going to crash, but I kept buying – and then, when prices did eventually fall in 2007-08, I bought a lot of properties cheaply. Today, I own about 120-130 rental units, all in Bristol, and employ 20 people to look after my 700-plus tenants.
Landlords get abused, but there’s a massive shortage of accommodation in this country. Yes I’ve been lucky, but everyone has some luck in their lives. I’ve also been proactive and worked hard. At the end of the day, I took a gamble – and it was a good one.
The full story can be found in The Guardian.