'Friends' approach to property investment pays off

One of 33million people to read “Rich Dad Poor Dad” by American entrepreneur and real estate magnate Robert Kiyosaki, Liz Lanfear says the motivational book inspired her to invest in residential property.She started in 2000 at the age of 31 by buying a home with a partner and, when they split, she bought her own. Her house in Chapel Allerton cost £100,000 and she brought in lodgers to help pay the bills. The income covered her mortgage and her bills.

“That’s what really got me interested in young professional house shares. The girls I shared with became friends plus I was living for free. I could see that renting rooms out was a lot more profitable than letting a single property,” says Liz, who set herself a target of owning four, four-bedroom properties within ten years.

Thanks to rising house prices and a bank lending spree, she was able to re-mortgage easily, releasing equity to buy more properties that were suitable for the “Friends” generation who like the cost and flexibility of renting a room, rather than a whole property. At the forefront of her mind was Robert Kiyosaki’s idea of “tenant clients”, a concept unheard of 17 years ago when tenants generally got what they were given, like it or lump it.

“I’d lived in HMOs for years and so I knew that I wanted something better, which is why I renovated property and decorated it to a really high standard,” says Liz. “Plus, I didn’t want to follow the student shared house model where you have a joint tenancy and tenants have to find friends to share with them. I wanted to let rooms with bills included to people who wanted to be independent.”

There were mistakes very early on, including a diversion into the student house market and a house she decided to manage and let herself. “The students saw me coming. They didn’t pay the rent and one of them threw a brand new bed out because he decided he wanted to go bohemian and sleep on the floor. What amazes me is that it didn’t put me off property,” says Liz, who marries her career as a professional landlord with a job share as a university library support manager.

Interest rate rises also caused difficulties early on but by 2008 when the recession hit and buy-to-let mortgages all but vanished, she had 17 properties in Leeds, mostly four-bedroom houses over three floors with a shared kitchen and sitting room. Since then, her husband Paul, a lawyer, has also caught the buy-to-let bug and together they have a multi-million pound portfolio and have just bought a stake in Multi-Let, a lettings agency specialising in shared houses.

Launched by young Nottingham entrepreneur Daniel Hill, the company offers everything from rent collection, inventories and monthly inspections to HMO compliance, maintenance calls and refurbishments.

“We had struggled to find an agent that offered the level of service we wanted to the point where I was thinking of taking all the properties back and managing them myself. It was really frustrating. What impressed me about Multi-Let is that it is a specialist with a really good 24-hour service to tenants. Maintenance issues are handled straight away and that has given the business a 96 per cent occupancy rate,” says Liz. “It also has a very slick IT system, which is something I know a lot about thanks to my work in libraries. There are apps for everything.”

The firm also offers advice to landlords and helps them get their properties to a standard that meets the needs of today’s young professionals.

“They want a beautiful home and they want minimum hassle. They want bills and broadband included and a cleaner. Most of the tenants have lived in shared student houses and they don’t want that anymore. They want a better experience,” says Liz.

Her advice to others thinking of buying shared houses in these uncertain times is to buy local or in an area you know well.

As for the best areas in Leeds, she suggests the young professional hotspots of Oakwood, Roundhay, Headingley, Meanwood, Woodhouse and Chapel Allerton, although she has a soft spot for Armley, which she thinks may hold some promise in the future.

*Multi-Let UK , www.Multi-let.co.uk