I’m not a gambler, but a wheeler-dealer. And a long-termer, not a Flash Harry. I know, it all sounds like some Peter Sarstedt hit from the 1960s but before I start crooning on about being friends with Sasha Distel and stealing a print from Picasso, this is all about my buy-to-let portfolio, readers.
The trend has now been going for so long that it’s no longer a trend, but something with mini-groups, subdivisions and niches favoured by distinct personality types. For one week only, this column is devoted to helping you work out which category matches your personality. The criteria have been devised by experts in the field. With a bit of help from your regular landlady, of course.
1. Perhaps you fall into the first category. If so, the following ad will appeal to you: “New ski apts, £42,000 furnished, Hungary.” Have you bought what looks like a fantastic deal in a new EU country? Hungary, Poland or the Czech Republic? You don’t speak the language and you certainly don’t understand fully the repercussions of a) local taxes, b) the best rental options or c) what happens if the drains collapse.
But you are optimistic, and believe that these EU babies offer a tremendous deal that will realise itself in time. Is this you? If so, you are a gambler.
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2. Alternatively, have you just bought a large villa in Nottingham and hope to rent it out to a bunch of undergraduates, one of whom is your son? You haven’t ever bought to let before, but are comforted by the thought that if interest rates soar and leave you in negative equity, then at least little Johnny will have lived somewhere rent-free with a new gas cooker and a decent mattress for his three years of wild student-dom.
Sadly Johnny has developed a deep hatred for you since you have put your foot down on the notion of cohabiting with his girlfriend and have insisted he not only has the single room but also share the house with a clutch of overseas maths students. Well, they pay their rent on time. You get quite used to driving up to Nottingham every month or so to do some DIY. You are a classic first-timer.
3. Fed up with the performance of your pension plan, you have just pulled the cash out and splashed out on an off-plan apartment on one of the costas. It cost about £92,000 and you are heartened by the fact that you won’t have to spend much time and trouble with this investment, since all the pool upkeep, property security and heating is taken care of by an on-site company.
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You are also a fanatical golfer, so if the tourist market becomes saturated with other Brits renting out their villas, you can always decamp there and improve your handicap. Sorry, but you are what’s known as a Flash Harry.
4. Five years ago, you bought half a dozen flats in the City of London. They were expensive, but have put on so much since then that you have been able to re-gear your mortgages, change them to interest-only and buy a few off-plan apartments in the new King’s Cross development. You have managed to get a good discount because you bought off-plan and have furnished them with the latest gizmos. One (the penthouse) even has climate control. They all have parking.
They haven’t come on stream yet, but you are already researching the corporate relocation market so that when they do, you aren’t left stranded with no tenants and 85% mortgages. You are a classic buy-to-let merchant, otherwise known as a wheeler-dealer.
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5. You are quietly proud of your buy-to-let portfolio, which is easily in double figures. You invest in modest houses for people who would class themselves as first-time buyers, divorcees or newlyweds. You buy new or nearly new in suburban offshoots of large employment hubs. You regard buy-to-let as a part-time job but are quite happy managing them yourself with the help of your wife. Or husband. You are certainly not risk averse and enjoy going to bed with a good property supplement. Are you out there? You are a property anorak.
6. You have invested in four terraced houses in Stratford East, east London, and refurbished them simply, with magnolia paint and beige carpets everywhere, and treated them all to new kitchens and bathrooms. For a while, everything was going well, but recently the capital growth has slowed up and rents have started to fall.
So you are considering selling and have started looking outside London to new hot spots ranging from Plymouth to Newcastle. You hope that you have chosen an emerging area and reckon that your capital outlay will gone up significantly in the next 10-15 years. You are a classic long-termer.
Or you could be a bit of everything. Property expert Nick Clark, who has devised most of the above definitions, says I have a foot in several camps. “Four of your properties are in London and one is in Paris. These are well-established safe and reliable locations with a high rental demand. That would suggest you are not a gambler, but prefer low-risk properties.” Tell that to my bank manager.
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“You’ve owned some of your properties for between five and 10 years, and the work you have put in refurbishing them indicates you are looking for something with investment potential in emerging areas. This would make you a classic long-termer. But you’ve also gone for a mix of tenant types — families, tourists and City workers, and have also bought at auction as well as off-plan. This indicates you have your finger on the pulse of the buy-to-let market (oh Nick, you are so kind) and suggests that as well as being a long-termer, you also have wheeler-dealer tendencies.” And I always thought I was the shy, retiring type.