Video Transcription:
Brett:
Welcome to Property Rant. So today I’ve got the privilege of being here with Jim Kirby. So Jim’s been one of our clients since about 2005-
Jim:
Five or six.
Brett:
Five or six, yeah. And so that’s 14, 15 years, 16 years potentially. No, 15 years.
Jim:
Yeah, 15 years.
Brett:
15 years. So, the great thing about that is Jim’s been in a job all the way through, he’s built a portfolio. He’s now retired, successfully retired, and looking very good, very good for it. So we’re caught up, and I thought it would be really good to get down and dirty with the whole process that you’ve actually been through. Because so many people are starting out and they haven’t actually seen the end results. And I think one of the problems we have in this industry is, and you’ve got all these property gurus running around and talking about becoming a millionaire, and how easy it is, and how simple it is, and how quickly you can do it. And for the most part, it’s absolute BS. But I think what you’ve got with Jim, and a number of our clients now, is they’ve done it for 15 years, 10 years, and so they’ve actually been to the point where they got to retire. So, how did you start out? What was your thinking? If you can remember back that far?
Jim:
Well, for the last 25 years, until very recently, I was practising as a criminal defence barrister. It’s not as well paid as some branches of law, but it is well paid, or at least it was in those days. And I had a good income and I was managing to keep some savings going, and the obvious thought occurred to me that I only had a good income whilst I was working. And I’d reach a stage in my life when I would want to stop working, whether I was 45, 55 or 65, and then I would have no income. So what I needed was to acquire assets that would give me an income, and a good income, at that stage in my life. And I was fortunate enough to meet Brett and his team in London in 2005 or thereabouts, and I bought my first property with them.
Jim:
And they introduced me to the concept of buy to let. I knew what that was and I’d been a tenant myself for years, renting a property, and then me and my wife finally bought our own properties and moved on, and moved up the property ladder. And the time came to acquire the first of our properties that we were going to own for the purposes of letting and gaining a landlord’s income.
Brett:
And that was, was that at First Central or was that at Argon Tower I can’t remember the first one.
Jim:
It was either in East London or West London, and they were beautiful apartments, two-bedroom apartments. And as I said, we’d bought a number of properties before, my wife and I. And these beautiful apartments had come, and Brett and his team had done due diligence on them. They looked at the position, the schools, the desirability of the properties, the local facilities, the transport links and so on. It was very impressive. And the time came to buy. My wife was nervous, admittedly, I was a little less nervous but I was a bit apprehensive. And the great thing was you and your team made buying, actually acquiring the property, really easy. I could see that it made financial sense, but they did, obviously sourcing the property, getting it at a very competitive price, arranging a mortgage, doing the searches with their solicitors, and doing all the legal completions.
Jim:
Now I’d done that before for myself, one property at a time, but they were doing it with 10 properties at a time and they had people who really knew what they were doing. And you know what the really great thing was, both then and going forward? I didn’t have to do anything, I didn’t have the stress, I could concentrate on my day job and keep the income from that coming, and you guys did all the work. So I owned my first property. Yes.
Brett:
And which is, so obviously we talk about effortless property investment, effortless property management. Would you say it’s been effortless? Or has there been, there’s still been ups and downs hasn’t there, along the way?
Jim:
Yeah, there have been ups and downs, but the fact that you did the homework and the research on the properties. For all of us, buying a home and even buying an investment is, to some extent, a leap in the dark. We can do all the research we want, but you guys did the research and it proved to be well-founded research. And we bought the first, and then maybe a year later we bought our second on the other side of London. And they were still our best investments actually, they were really good.
Brett:
Yeah, London’s great.
Jim:
And then what is more important, even without these guys buying a property is relatively straight forward, well it’s actually never straight forward, it’s always a heartbreak. And it never does it on time, and there are always, “Oh, they’ve come up with this now, they’ve come up with that now.” And you’re tearing your hair out, obviously, it was successful in my case. But the important thing is managing the tenancies, and collecting the rent, and doing the maintenance, and all that crap thereafter, you guys did. I didn’t have to do anything, I sat at home and the checks came in every month. And yes, there’s always maintenance, you send me an email saying, “There’s an issue with the washing machine in this flat.” So you organise an engineer, you send it to along, and say it’s a repair or it’s a replacement. Say, “Fine do it.” And you do it.
Jim:
The honest reality is, most of my tenants I’ve never met. I have properties I’ve never seen because I don’t have to see them, I don’t have to go there. I provided the capital for the investment, and you made the investment, and you screened the clients, you found the tenants, you did the credit checks, you collected the rent. If there were ever arrears, you chased the arrears. And you did the maintenance. And it really has been effortless. I’m incredibly grateful.
Brett:
And so one of the interesting things with Jim to is, so Jim started off as a barrister and then you realised, you identified, with the cuts and all the things, that you could see where it was heading. So you decided to jump careers effectively? To a degree.
Jim:
Yes, 10 years ago I stepped away from full-time practise at the bar because I was offered a job teaching at a university. And it was a lifestyle choice again, which parallels what Brett had first explained to me when I met him, about buying to let, it’s a lifestyle choice. And I left the pressure of a full-time legal practice, and I moved to the South Coast of England, and I taught law at a university. And in doing so, I cut my stress by 80%, I cut my income by about 60, 70%, I cut my travelling time by 90%, and my lifestyle and my health improved immeasurably. And my portfolio continued to gently, steadily grow, nothing too ambitious, nurtured by Brett and his team. And now I have an income in the thousands of pounds per month, far more than I ever got as a salary. Well, I worked hard to get the money, but now the money’s working hard for me.
Brett:
Yeah. And I think that’s really important too, you don’t have to have hundreds of properties to be successful and have a good income. Actually, you can have, I talk about the 3+1 Plan, but the reality is, depending on the lifestyle you want and that, it’s actually, and given the time … Because actually some of the properties you bought too up North, they haven’t really done a lot, income-wise, okay, they might have made a bit of money, but they didn’t really do a lot in the end. And the decision was taken that actually they weren’t in areas that were getting invested in. And the unfortunate thing is, as you’ve probably heard me say, most areas in the UK are not getting any attention, and so we’re not selling properties in those areas anymore. And so we got rid of some of those.
Jim:
Yes. I bought those maybe 12 years ago and in terms of capital growth, they’ve gained a little bit, but not much. They paid for themselves during that period and I managed to get a bit of profit on the rental income as opposed to the mortgage costs. But I look at the state of England now and the enormous capital growth I’ve made on the properties both in East London and in West London, and down in Surrey or Middlesex, they’re doing very well. But the ones in Yorkshire simply weren’t going anywhere, so we sold them, that’s fine.
Jim:
And what I intend to do, I’ve still got a mortgage on two, two of them have a mortgage, and they’re coming up for renewal in about 18 months. What I intend to do is sell one in Docklands and the capital growth on that has been extraordinary because of the part of London that it’s in. And that will give me almost enough money to pay off not only that but the one in West London as well. And I have a few more savings, I’ll pay off the one in West London entirely, so that will be mortgage-free, as well as the others in the South of England.
Brett:
And interesting, just on that one, in some ways you could sell either one?
Jim:
Yeah, I could sell either one.
Brett:
But in some ways, the reason we’re choosing that one to keep is because actually when we first bought that one, it a was a regeneration area and they were spending a lot of money, and now actually, funnily enough, I’ve just started talking about that area again, 15 years later. That actually there’s now another tranche of money coming in to build, which will drive prices up again.
Jim:
It’s an amazing part of West London, there’s so much regeneration there, Crossrail has made a real difference. People are pouring in, investment is pouring in, and property values and rental values are going up.
Brett:
Yeah. And it does come back around, and that’s how a proper functioning market should work. The problem is because of political decisions and because of all sorts of economic things, and whether we say Brexit’s or whatever, recessions, a lot of places in the UK aren’t getting that investment and therefore the fundamentals are actually getting worse. So you need to look at getting rid of those properties, and that’s a challenge. Because for some people who may have bought five years ago, and they haven’t seen enough growth, that can be very difficult. So it really is part of the strategy. And obviously we used to meet quite regularly about strategy, and it was always over lunch and a few wines. But the reality was, that what we would do is strategise what we were doing and we’d talked about the fact that, do we keep this one? Do we get rid of it? Do you go get a job down in, with a less wage but a better lifestyle, and a blah, blah, blah, and all that? Do you keep being a barrister and ride the wave straight down?
Brett:
And I think it’s been interesting to see, from go to whoa, over the last 15 years. It’s been fantastic and really, there’s ups and downs, as there is in anything and it’s not going to be a case of, it’s not this, every property makes you huge amounts of money. Some of them tick over and some of them do just beyond your wildest dreams. I think, really, that’s where London, the fundamentals in London are so fantastic, that’s why I love it.
Jim:
What I’m satisfied with still, is that you guys do so much research, you know the market so well. I don’t, it isn’t my job, I don’t know where the investment’s going. And you are now concentrating again, Brexit’s done, or it will be done, whether we like it or not. And the knock-on effect of it, actually some certainty arriving now in the financial and the political arenas, is really important. And so money is being invested again, it won’t be crazy, but it will be good growth again. But I don’t know whether you should invest in London, or Leeds, or Manchester, or Birmingham, or in Guildford, or these other places, I don’t know. But he does.
Brett:
Yeah. And to be fair, that’s what we do all day, every day basically, is researching. And it’s not just me researching, it’s using all of our network that we’ve developed over the past 20 years, or 18 years I think it is that I’ve been in the UK property market. That the relationships that are built for people who work in Manchester, London, and the various markets that we go into, and those relationships. Because actually they’re the guys that really know the stuff locally, and we get in and bring our negotiation power, and our history and all that to bear to get the best deals in the best areas. And a lot of times actually, I think the mistake that we make is, property people, is we try and get the best price, but in some ways, I would rather get a market value in a market that’s going to go up than to get a huge discount in a crappy area. And I think that now, that’s been the game that’s been played in the industry for a long time, and it just doesn’t work.
Jim:
Because people aren’t playing the long game. And I’m an example of the long game in action, as a client. Because when we first met, I was on the top of my career, I was earning a significant amount of money, and I was working hard. And then, I can’t remember, five years into that, I stepped off the carousel and I took, as I said, a lifestyle decision, a much calmer job, much less work, much less stress. And I would go down another notch, where I’m just doing the very occasional case in the courts, but I’m more or less retired. But I’m still enjoying the fruits now, in fact, I’m enjoying the fruits now more than ever, of this connection and this investment.
Brett:
Yeah, absolutely.
Jim:
And I’m grateful.
Brett:
Yeah, and it’s been fantastic having that relationship with you too.
Jim:
Thanks, mate.
Brett:
We’ve had many laughs if you don’t know Jim, he is quite the character and you can imagine him as a barrister in front of a judge, it would be theatrics.
Jim:
Members of the jury, I don’t know what he’s talking about.
Brett:
It is a laugh a minute with this guy.
Jim:
Thanks, mate.
Brett:
Just, before you go too, one other thing that I just wanted to talk about too was, just from the lettings perspective, so the relationship with the property manager that you have? Who’s your property manager?
Jim:
Phillipa.
Brett:
Phillipa, okay. So Phillipa, you’ve worked with Phillipa, how have you found that relationship?
Jim:
Really good. So they’ve got a really good focused team. They have one point of contact for me, which is great, and I don’t need to know who’s in maintenance, who’s in leases, who are in legal, who’s in whatever. I have one point of contact, and I go to her if there’s ever an issue, and there isn’t usually. But it’s great because their responsiveness, they’re really good, they respond. There was an instance where I had some maintenance done and I thought they’d overcharged me. I said, “This isn’t really a good rate,” and they investigated, they came back, they spoke to the contractor, the contractor gave me an appropriate refund. And it was really good, so I feel taken care of. I don’t have to do much, they have it running very smoothly for me and it’s great. I am very grateful.
Brett:
And I think now, more than ever, there are over 170 pieces of legislation that we have to cover. I’ve gone back to school basically and doing my level four certificate in Property Management because I have to. Because the new regulations that are coming out, or the way it’s trending, is I have to be qualified. And all of my team are qualified and we’ve actually been committed to that for a number of years where all of our team, we pay for their qualifications to be done. Which is very rare in the industry right now, it will become the standard, but we’ve always wanted to have highly skilled people who knew what they’re doing. Partially because I don’t want to be the bottleneck where I have to make all the decisions, but I want to devolve that down. And I think that’s one of the key things-
Jim:
Let me interrupt. There’s an irony here, or a paradox, I’m a lawyer, I’m a barrister, people think I know the law. I do, but like most barristers, in one niche area. I passed my land law exams 25 years ago, I have no idea how most of it went over my head, it’s dreadful, land law, don’t go there. And I ring up and say, “Phillipa, Brett, what’s the law on this?” And they tell me, and I’m grateful. And I don’t even have to give them the kind of fees that I used to expect, it’s great.
Brett:
Really, maybe we need to renegotiate? No, that’s awesome. But I think, it’s great having you as a client, I really thank you for coming along today. Hopefully-
Jim:
It’s been a great journey, and I have this nest egg now, which is looking after me and my family, and I’m very pleased.
Brett:
Yeah, absolutely. Mate, thank you so much.
Jim:
Thank you very much.
Brett:
Cheers. Awesome. See you guys, have a great day. Bye.
February 10