Property investing, is it all about the money?

by | Jun 7, 2016

Sitting here at my villa, that I bought in 2000, it got me thinking, why do we really buy property and does that reason ever change?

Growing up in the Margaret Thatcher era of “you’ve got to get your foot on the property ladder” I was as desperate to buy a property as anyone was back then, and this was the reason that I bought my first property at the age of 18. In fact I signed the application form on my 18th birthday, and completed on my first property a studio flat for 27,000 in October, 1989. This was at the time when interest rates were a shocking 15%!

Unfettered, throughout the 90’s I bought lots of what I call “trader units” as in functional and practical high return single units, these included 1 bed houses, 2 bed semi’s, 2 bed maisonettes, basically things I could buy easily, do a quick makeover and rent fast, great rental units generating good cashflow income, low maintenance and that I knew were in strong demand and rented well to easy to manage type tenants.

However by the time I got to 27,(1998) my asset base was over 2 million and in those days, that was quite a good place to be.

I never really wanted large volumes of property, I preferred instead to have low loan to value and higher value units, and It was when I got to around 15 units, that my ideas started to change as to what to buy, it was then that I decided I wanted to buy more interesting properties so I set about buying and investing in more of what I enjoyed.

This meant that In the latter half of the 90’s I progressed to what I felt was more interesting projects, buy and sell refurbishments and bigger deals, these included big old stone cottages, with beams, wattle and daub ceilings and flagstone floor, the bigger the better too! I took on large farmhouses, central key village houses, wood timbered properties, anything that was old, stone, wood and interesting… This is where I believe I started to do what I enjoyed, old houses, not such a great return, but enjoyable, and really not good rental units, so most of these got sold on, creating cash lump sums to, you guest it… Buy more!

Whilst doing all these, as part of my work running my letting agency, I also offered a buy to let advisory service and refurbishment service for other would be investors, and I helped literally hundreds of other landlords start their investing journey, which is where I discovered there was something else I enjoyed doing… Helping others achieve their goals too.

But what was interesting was that at the outset of buying property, all the investors, seemed to want the same thing, to make money, some more capital appreciation, others more cash flow, but they each saw property as a vehicle to make more money, but I wonder, is the end goal always the same?

For me having grown up in foster care, this meant I had no financial or family back up, the buck stopped with me, if I failed, I had no “rescue” option, so when I started buying property, My drive was to create capital appreciation, to generate net worth, to give me security and stability for the future, which it certainly has.

Since 1996, I have been blessed to be able to live in some beautiful homes, I’ve owned most of them but rented some too, as for me, the joy in where you live is more important than whether you own it or not. I have lived in hilltop farmhouses, with views for miles across valleys on the top of a mountain in Wales, a wood timbered cottage with a huge inglenook and a woodland in the back garden and a stunning 7 bed roomed farmhouse with 2 lakes, I really have been lucky, but this fascination with beautiful properties, actually changed my investing style from around 2000 for good.

Sometimes inspiration can come in the most unexpected of places and for me, it came from a conversation with our window cleaner at the office, Bill was one of those people that could talk, and talk, and talk, which could be quite annoying when you’re busy, but on this day, he literally changed my life… He was busy explaining but also sort of questioning how at 65 could he sell his home (a nice detached property) and attempt to generate enough money todo all that he wanted to do, as his home was his only asset.

What he wanted to do was to buy a small flat to live in, in Wolverhampton, plus give some money to his son and buy a property in Cyprus to spend winters in… He had it all planned, but was it workable?  I just couldn’t see how he was going to manage all of that, he had left it far too late, and having just had a triple heart bypass, his funding options were limited. But it made me think, why do people leave it so late to plan for their retirement only to find that it’s too late, I should decide, the life I want and create it now…

Since I was 16 I had always a dream to buy a villa in Spain, my original thoughts were, why not leave it till I retire sell some stuff and then buy one… But after my conversation with Bill, I knew now was the time, whilst I had income, I could raise finance and afford to do work on the property, so off I trotted to Spain to find my dream villa. A few short months later I was the proud owner of my dream (albeit run down) detached villa in an exclusive part of Spain.

So In 2000, at the age of 29, I bought my retirement home, a villa in a Spanish tourist destination if the Costa Del Sol, not for income, cash flow or capital appreciation, but because I wanted it, it was part of my life plan.

Over the years, I must admit, I have really enjoyed doing the place up, I am young enough and financially equipped at this age to deal with the tribulations of villa ownership, and to be honest I’m not sure how I would have coped, if I had been 60+

The villa ownership journey so far has given me a host of stories, about Spanish builders, the time I asked for a new bathroom suite, only to find they had extended my house by 4 feet! The arguments with local officials, over the building of a pool and the height of the wall, and the “you English” comments, from when I wanted to fit central heating throughout for the cold winter nights.

The greatest thing about this purchase, actually was not something I had planned for at all, or expected, it was the lifestyle it bought with it. By buying the villa so young, at just 29 (when my son was 3) means that I have had years of holidays here, seen my son grow up here, on our family holidays, it is his now like his second home from home, we feel like sudo locals,  We have had so far 16 years of fabulous family holidays and I’m sure many more to come.

Also when I unexpectedly discovered I had a brother at the age of 30, which I can assure you was rather odd! Having the villa allowed us to holiday together spending precious time getting to know each other, and our respective families, which was priceless. Something I’m sure I wouldn’t have done if I had left buying a villa until my retirement.

Something I also loved was outdoor life, dog walking, horse riding, clay shooting, hills coastlines etc so shortly after buying the villa, around 2002, An opportunity came along to buy a stone cottage next door to where my foster parents lived, it was also an opportunity, for me to buy the garden behind their house, which belonged to this neighbouring cottage, giving them the garden they had always wanted, but also again, it was in need of serious work.

Un deterred, I made an offer, and became the proud owner of a derelict (not even a bathroom) stone cottage and embarked on a labour of love conversion and refurbishment. When completed, this property has meant that I have been able to spend some wonderful and precious time with my foster parents and my family, taking my dogs on long walks on the beach, in the hills and my also again with my son James on go karting and riding, etc

So what has property done for me? It has created income and assets for sure but the bit I hold most dearly, is that it has created for me the life I always wanted, to live in beautiful homes, to be able to holiday with my family in a safe, familiar environment and create memories that will last a lifetime, because I invested in what I wanted when I was young enough to enjoy it.

So it made me think, as a property investor, we may all start out with the same goal, to make money, but at some point, we need to start living the life we dream of, stop planning and start living.

So my advice?  don’t make it all about the money, remember to have some fun too and enjoy it… We are all only here once.