Many of you will recall that dramatic period some 16 years ago in 2008 when the Bank of England suddenly changed its base interest rate from 5.5% down to eventually reach a then historic low of 0.25% in August 2016. In a recent episode of the PINCast, that period has been referred to as a ‘golden age’ for buy-to-let investing, as borrowing rates became very low by historic standards. Of course we are now into a very different era with interest rates, and with lenders and property valuers being far more cautious about valuations and their lending criteria.
From around 2010 many investor-landlords and developers started to take advantage of reduced monthly borrowing costs and the result led to lower gross yields. As night follows day, we then saw a switch of strategy from single lets to an increased interest in shared accommodation / HMOs by many investor-landlords who wanted to achieve higher net returns.
HMO and Co-living are sectors that we regularly look at in our investor-interviews here in PIN as they are popular strategies for many people who want to build and scale up a property business. The choice is logical as, unlike many single let properties for family occupants, it enables an investor-landlord to often add significant value and to achieve stronger monthly rental cash flow.
A very typical journey I have heard on many occasions is that someone will start out by doing a few buy-to-lets but then they run out of cash for their next deposit to acquire another deal. When that impasse is recognised, those who can demonstrate some expertise with successful projects will then turn to working with private funders, generally on a loan basis. This enables them to continue to buy and expand their property acquisitions over time.
Which brings us to this month’s investor interview with Magdalena Kaszkun, who lives with her husband in Twickenham in south-west London.
As Magdalena explained to me when we first met, they HAD bought a flat in Twickenham 2020 as their first home purchase, refurbished it and then after two years, refinanced it to extract additional equity along with some savings to put that all towards the purchase of their first investment property which was a 3-bedroom property in Salford, now the location for the BBC’s northern studios.
“During the process when creating our Twickenham home,” said Magdalena, “I found my passion for property, and we used the revaluation funds for our first investment. At that time, I took upon myself project management and the design of the property, which, in the end, was valued higher than any similar one sold in the area. We realised that we could achieve our goals of having more free time to travel and experience life whilst helping local communities, and providing returns for investors. We then decided to take a professional approach, and I went full-time into the business in 2023 after gaining a wealth of knowledge through mentorships with some experienced developers.
