By Tom Dylan, director of The Great Northern Property Company
The directors of The Great Northern Property Company boast combined portfolios of more than 50 rental investments. As an expert property investor, Tom also provides mentorship for those new to the industry, runs weekly meetings through his networking group ‘Cuppa Coffee’, and hosts the Cuppa Coffee Property Podcast.
You need lots of things to succeed in property investment, but three of the most important are luck, enthusiasm, and a great support network, including a specialist property accountant!
There are countless training courses about launching a career in property investment, and one of the first things that most of the good ones say is that a good property accountant is critical. I’ve worked with Champion Accountants for years, and I think I’m onto a better thing than most. Not only do I receive a full property accounting service, but I also get advice on a wider range of issues thanks to Champion’s Small and Medium-Sized Enterprise specialism. They have lots of specialists under one roof, so when I have a specific problem, they can either find the answer, or find the person who knows the answer, which saves me time – everyone’s most precious resource!
Alongside that, enthusiasm is key – especially if you’re starting in property, as I was without a trade or any other relevant experience. For people like that, enthusiasm, ambition, and passion will get you far.
I recommend getting stuck into some of the great courses out there, many of which are free. Speak to people. There are networking groups – including my own – full of knowledgeable, helpful, enthusiastic people who were once where you are now. Having said that, it’s a balance; don’t let information bog you down! Once you’ve done a bit of learning, go out there and get started; there’s plenty of learning to be had in the doing.
You are already very likely aware that property investment has changed in recent years. Undoubtedly, this is becoming a tougher industry to succeed in.
The introduction of Section 24, for example, means in simple terms that higher rate taxpayers can’t claim mortgage relief on properties owned in their name, as they could until a few years ago. That means that for those people, much more of the rental income from a property is taxable. Meanwhile, spiralling interest rates mean that many landlords must now absorb higher mortgage costs or increase tenants’ rental payments so as not to eat into their profit.*
There are also new rules around Energy Performance Certificate (EPC) ratings coming into force. Landlords may soon need to ensure that all of their properties have a minimum ‘C’ grade for their EPCs, as the government is talking about bringing this in as a minimum standard in 2028. For some, this could involve paying large sums for air source heat pumps, solar panels, and other renewable technologies. When I called around recently, the price for a basic air source heat pump was over £5,000, and often a lot more. It’s estimated that the average landlord will spend around £4,700 to bring a property up to a C rating.
There’s also a huge undersupply of housing. We’re an island nation with limited space and a rising population. Meanwhile, the government (of whatever stripe) has been failing to hit its own modest housing targets for nearly 50 years. Those are the fundamentals of the UK rental market – the foundations, if you like. As a result of all of this, I think that, despite what I’ve said in the last few paragraphs, it’s a superb time to be a landlord.
The question is, are you brave enough? I would estimate that only around half the people who attend my networking group ever go on to invest in a rental property, often due to (totally understandable!) fear. Enthusiasm, education, and great advice are the best antidotes to fear. As far as I know, my tenth house purchase was definitely less terrifying than my first.
Check out Tom’s Cuppa Coffee Property Podcast here on Spotify: https://open.spotify.com/show/04yFCSu7Sij2CM7Ea09v44
*Nothing in this article constitutes financial advice, and you should always seek professional advice before investing your hard-earned cash.