With ten years’ experience as a property manager looking after a large real estate portfolio, Tom Watson is an old hand, even though he is still only 29. The annual rent roll from the properties amounts to around £300,000 a year, giving him a comfortable lifestyle. And yet even seasoned professionals need help at times which is why Tom joined Samuel Leeds’ academy. A year on, and Tom is in the process of restructuring the assets that he and his father built up.
‘When dad passed away, I didn’t know what to do with the property’
Tom went to work in an estate agency as soon as he left school. At first it was a Saturday job. Then, whilst at sixth form, he started working two to three days a week there.
After learning the management and letting side of the business for a couple of years, his manager wanted to work in another patch and so he followed him to Brentwood in Essex. However, Tom became bored with the job after a while. His father, who was a builder, suggested they set up their own management agency.
“He was building up a small portfolio himself. He said why don’t we set up our own management agency and you can manage the properties through there. I’ve got clients and landlords. We can approach them and manage their properties.
“He had a shop at the time that was becoming available. It was a carpet shop. He said we can turn it into an estate agency and go from there,” recalls Tom.
The shop was on Walthamstow High Street in London and the business went well. They started making money and invested in property.
Tom pulled off his breakthrough deal when working at his first letting agency. A customer came in who wanted to sell his rental property. Tom bought it for £102,000 on a residential mortgage and found a tenant for it.
He put down a deposit of £10,000 to secure the one-bedroom flat and sold it about three years later for £125,000. Tom knew from the start he didn’t want to live in it.
“Instead of moving it to a buy to let mortgage I got consent to let, moved in with my parents and rented it back out. My management agency was managing it. It didn’t need much doing to it. All we did was put a new boiler and kitchen in.
“I pretty much trebled my money. I rent it out for £900 [a month].”
But then in 2016 his dad, who had been his mentor teaching him how property works, passed away.
It left Tom unsure about what to do with the family portfolio which they had built up together.
“We didn’t know what we were going to do with the properties, how to structure them and move forward.”
Then he came across Samuel Leeds online and messaged him on Instagram. “I said look this is my situation. It’s a bit different. Can I meet up?”
As a result, Tom met Samuel at his house. One of Samuel’s associates was also present and together they went through the spreadsheets which Tom had brought along. Tom left feeling he had clarity about what to do next. Subsequently he joined the Samuel Leeds academy which provides comprehensive training in all aspects of property investing.
‘I’m not just sitting at home relaxing’
Most of the properties which Tom is restructuring with Samuel’s help are in North East London. It is a time-consuming process, he says. His mother inherited the estate but some of the properties are in his name. His portfolio is worth over £1m.
One option which the entrepreneur has investigated is transferring them to a company under a limited partnership. He has also had to grapple with other complex issues during his training over the past year, learning a lot about tax, mortgages, finance and interest rates – as well as the importance of planning ahead.
He found the videos on the academy’s online portal particularly useful as he could access them at any time. Another key benefit for him was being able to meet students from different backgrounds who were at various stages of their journeys.
Property gives Tom a good living. “Collectively as a family we get about £300,000 in rent a year.”
But it is not a case of him putting his feet up while he reaps the rewards. “This is my job. I manage the properties that our family owns,” he explains.
Nevertheless, there are some people who think he doesn’t work. “People see it from the outside. They don’t actually see what goes on. There’s always something going on. I’m not just sitting at home relaxing.”
He also manages an apartment block, along with properties owned by a couple of friends. Eight years ago, he and his father acquired one of the flats. It turned out to be a highly profitable transaction in more ways than one.
The two-bedroom flat in a block of five apartments came with a share of the freehold and 80 years remaining on the lease. The purchase price was £146,000 and they then rented it out after doing it up.
Tom also successfully pitched to manage the whole block. “I send out all the service charges, pay all the bills and get paid to look after the block even though I have to pay the service charge myself. So, basically the service charge is free.”
There was another bonus when the leases on all the flats needed to be renewed recently. One of the apartments, which is leasehold only, was renewed for a premium of £40,000, with the four freeholders receiving £10,000 each. When they came to renew their leases, it only cost them £3,500 in solicitors’ fees.
“We got the flat [we bought] valued two months ago and it’s £425,000 just from a lease renewal. It’s been rented out for all time we’ve had it.”
They purchased it from a landlord who used to come into their shop, Tom adds, and it now rents out for £1,425 a month.
As a property manager, dealing with problem tenants comes with the territory. On one occasion Tom had to obtain a court order to evict a person for non-payment of rent.
Some tenants have the attitude that it is acceptable not to pay the rent and that landlords are greedy and out to make money at their expense, but he is no money grabber, Tom says.
“My tenants all know me, and they’ve known my family for a long time.”
He tries to be flexible whenever possible. One tenant informed him their dog had died and they needed to pay a large vet’s bill, so the rent might be late the following month.
“I said thanks for letting me know. Just pay it at your earliest convenience and then they sent me a text message saying: paid it.”
He describes himself as easy going. If someone moves into one of his properties and wants to redecorate the place, he will give them permission providing it hasn’t just been done up.
“If you’ve spent £30,000 on a new kitchen and bathroom and have just painted it, the last thing you want is a new tenant coming in a month later saying, can I paint the bedroom blue and do this and that.”
However, if the tenant has been in the property for a long time and only wants to paint one wall, he will generally allow that. The same goes with putting up pictures with nails. “I’m OK with that because you can fix holes.”
Despite his work, he still finds time to head to his local golf course at least twice a week. Playing golf keeps him happy and active, but it is also where he meets other businessmen and picks up tips.
“The people who play during the week are the guys who run their own businesses and are semi-retired. They can afford to take off four hours to play a round of golf. I play with these guys. I’m friends with them now. I’ve gone on holidays with them, and I pick their brains about how they run their businesses and what strategies they’ve had.”
Some have got car businesses or they’re stockbrokers, but they all own property, he says, agreeing with Samuel that this is what the wealthy have in common.
Tom anticipates growing his portfolio. He is in the throes of selling the property he lives in and moving into one of the rentals, enabling him to make a saving on the capital gains tax.
“We’re probably going to sell that just because it’s a one-bed flat and I’ve extracted as much value as I can out of it. Potentially we can use the cash from that to buy two or three more.”
The entrepreneur is a ‘big fan’ of the buy, refurbish, refinance strategy. It is tax efficient and makes sense in his view.
Having seen his success, Tom’s brother has now also become a member of the academy. Tom felt he couldn’t teach him about property himself and didn’t want to force him into it.
“I said to him I don’t want to tell you what to do. I’m not very good at explaining or very good with my words. I’ve already learnt everything my way in my head. So, trying to say it and teach it back – I can’t do that.
“I said if you want to learn and get into property, go with Samuel because you’ve got everything you need from the very start to the very end, no matter what you want to get into.
“He made the decision himself to join recently. He’s got two rent-to-SAs (serviced accommodation properties) and is loving it.”
Tom’s tips
- If I had a child who wanted to get into property when they grew up, I’d want them to do it off their own bat rather than me pushing them. The academy is a good place to learn.
- I sat next to one of the young academy members at one of the dinners and he asked me what he should do. I said get yourself a Saturday job at an estate agency at the weekend or whilst you’re at sixth form. You learn through it and get experience.
- You’ve got to talk to everyone and put yourself out there. It could be someone who owns property and is in a difficult situation. Try to be a problem solver. That’s what I say my job is really, solving problems for people. Whether it’s tenants or some other issue, there is always a problem that comes up. Solve it to your benefit.
Samuel Leed's verdict
“We have a wide range of students on the academy. Some have never invested in property before. Others, like Tom, already have portfolios and want to learn how to maximise their profits. It’s been great working with Tom, and I look forward to helping his brother.”
