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Case Study - Accidental landlord aims for early retirement with long term capital investment

Wednesday 05 April 2017

When single mum Rachelle Somai-Willis was living in her 2 bed terrace in Kent with her young daughter, it was a home for life. But a few years later Rachelle met someone, and fell in love. They needed somewhere bigger to live, but rather than sell her cosy home - Rachelle decided to rent it out. Ten years on and she’s very happily married, and a very happy accidental landlord. 

Rachelle says: “The decision to rent out my house when me and my husband moved in together was partly sentimental, and partly about the investment opportunity. I loved the house, but I also wanted to keep my options open and my foot in the property door, so to speak. 

“A few years before, a neighbour a couple of doors down decided to rent out his property, and asked me to keep an eye on it. Before I knew it I was doing a bit of the work of a landlord already, and kind of got my head round it! When the option came up to do it myself, it wasn’t daunting at all, and I knew there were tenants out there who would want the same kind of property. 

“I work in construction, and that meant I already had a team of tradesmen I could trust to call on in emergencies, and help keep the property up to scratch. That’s a pretty good base to start from. I put an advert up in the local paper, the Kent Messenger, and there was quite a decent response.”

It took Rachelle a little while to find the perfect tenants, but she found a professional working couple who had good references, and loved the house as much as she did. 

“We started out with a six month contract,” explains Rachelle. “After a couple of years, that was a yearly contract, and now the same tenants have been in there for ten years. It’s great for me because they really do treat it as their home, and it’s in wonderful condition. They’ve had very few issues and I’ve had very few calls to fix anything - so everyone’s happy. 

“I do go in once a year for an inspection, and to make sure the wear and tear is taken care of. I get a handyman in to do bits and bobs like check the taps, and do any small repairs. After years in the construction industry I’m pretty handy myself, and I can do things like laminate flooring and other basics. 

“All in all, it’s never taken up too much of my time or effort - which is good because I work full time - and I’ve never had to make a claim on my insurance.”

Although Rachelle, now 52, is currently still working, her husband is retired and she plans to join him in the next couple of years. She says: “For me, renting out my house was always about the long term investment. It doesn’t make a lot of money every month, but the rent pays the mortgage off and covers my costs. Meanwhile it’s in a nice area and the value of the property has continued to go up. 

“As my daughter gets older and starts thinking about a place of her own - and as I get closer to retirement - it will be time to think about selling up and putting some of that capital to use. I’ve got some maths to do first though, and I need to work out the capital gains tax make sure I sell at exactly the right time. 

“I’d say to anybody in a similar position to me to give being a landlord a go. In spite of everything going on in the market, good property in the right area is still a good investment option. If you don’t need to release the capital immediately, being a landlord - accidentally or otherwise - could really work for you. It’s definitely worked for me. 

“My advice to others starting out would be to make sure you get the right tenants. You need to get excellent references and proof of income, and you need to meet people in person. It’s not something I would trust to an agency, and it’s not as hard as you might think to find tenants through your own advertising. It’s also really important to have the right team around you - I couldn’t do it without a great electrician and a great plumber on speed dial. 

“Getting the right insurance is also important. You need to make sure you’re properly protected. I’ve been with Simple Landlord Insurance from the very beginning - a decade ago, now. I saw an advert, and when I went online I found they really do make everything pretty simple! They do exactly what I need, and they don’t bump the price up each year, which is what insurance companies usually do. I’ve never seen any reason to change a winning formula.

“In the future I think we’ll see more women going into property as people meet partners or new partners later in life, like me, or want to invest their money rather than simply save it. I think from a tenant point of view there’s very little difference between male and female landlords - they just want someone they can trust to respond and sort out problems quickly and easily.”

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