Sue Sims bought her first buy-to-let property at 21 - a shop with a flat over it. She didn’t do much with property for the next 16 years. But then she started investing in more properties, getting more education, meeting more people and going in on some joint ventures.
32 years on and she now has 42 properties in and around Birmingham.
Sue, 52, not only runs her own portfolio, but she also mentors new landlords, has her own lettings agency Property Genie (which runs out of her original shop), a specialist HMO management agency, a sourcing business - and has recently set up Partners in Property, a networking group.
“You could say that I started out as a very traditional landlord,” says Sue. “Historically I would save up money, buy a property, do it up, refinance it - and at that point take the money out and invest in the next property. But it’s a slow process and the margins just aren’t there any more.
“The property market has changed, and if you want to make it work for you, you have to change with it. I needed to get better returns or get out altogether, and that led me to start diversifying my portfolio - and the different strands of my property business.
“I now have a cross section of flats, 2-3 bedroom houses, an HMO, and two houses converted into studio flats - which I’m currently re-converting into Serviced Accommodation (SA) units as they become free.
“I also lease some of my properties out to a Housing Association. It means I get a better rental return for a solid 3-5 year period and no voids. It can be a completely hands off strategy, but I like to keep an eye on my assets and I’ve chosen to keep doing the maintenance.”
For Sue, it’s the Serviced Accommodation units that are her latest challenge. She continues: “One of the advantages of Service Accommodation is that you can theoretically use capital allowances, and that allows you to minimise your tax bill. It’s all about how your property is categorised, and you can get burnt if your SA is really an HMO in disguise.
“These units are 3 miles outside of Birmingham city centre, and that means they’re attracting a mix of contractors, tourists, people training at or visiting the hospitals on a short term basis - a whole host of potential guests.
“Location is so important because with Serviced Accommodation it’s all about occupancy. That also means you’ve got to be on top of the marketing, and that can be a full time job in itself. What’s more, it’s not one most landlords or property investors have the skill set for.
“There’s no pretending that SA is an easy strategy - there’s a lot of work involved. Basically, I always say that if you don’t want to run a bed and breakfast, you don’t want to run Serviced Accommodation. The only difference is that you’re not frying your guests’ an egg in the morning!
“Bed and breakfast has never been my ambition, so I use a specialist agency to market and run the units once I’ve upgraded them to SA standard. They do all the advertising on Airbnb, bookings.com and all the other major sites, co-ordinate the bookings, co-ordinate all the laundry and cleaning, and deal with all the check-ins and check-outs. That leaves me to run the rest of my portfolio and my other businesses.
“In terms of my long term investment goals, it’s quite hard to say where I want to end up. I love property, I love all the different things I get to do, and I’ll keep doing them as long as I’m having fun.
“For me, property is all about building relationships - with partners, contractors, tenants, local authorities, builders, finance brokers and insurers. That bit hasn’t changed. You’ve got to have a great team around you, people you know, like and trust. Whether it’s your builder or your mortgage broker, a specialist insurer (which you’ll need for SA) or a joint venture partner, you need good, sound advice from people who know more than you do.
“In property you can’t stop learning - and I think that’s really the secret of the landlords surviving and thriving in the changing property market. Taking the time out to do your research, getting as much knowledge as possible under your belt and meeting as many people as possible to help you along the way, are all absolutely key. That’s really where the Partners in Property network meeting came from.
“There is so much knowledge out there and much more willingness to share than you might expect. I’ve found coaching and mentoring new landlords and investors particularly rewarding - and I think the more expertise there is in the market, the better it will end up being for everyone.”