An interview with Mark Alexander – Founder property118
Long time landlord and the founder of property118, Mark Alexander, tells us how he grew his website to a point where he is confidently predicting 5 million page views in 2016, how he manages to consistently attract good tenants for his properties and what his thoughts are on retirement. As someone with a very active mind, Mark craves for mental simulation and enjoys solving complex problems faced by other landlords. In between all this, however, Mark has not forgotten that life is meant to be enjoyed. He graciously replied to our email while on a vacation in Malta. Keep reading to find out how buy to let investments enabled Mark to live a life that most can only dream of.
What was your motivation behind starting property118 website?
In a word, boredom. I had retired from Financial Services at the age of 41 and was going stir crazy living in Florida. Some people suggested writing a book so that I could share my experiences but that didn’t give me the interaction I needed to stimulate my brain. I was then introduced to Social Media and blogging, a relative latecomer. Initially my blog was all about my own property investment strategies but then others started to challenge them and suggest others alternatives, which was incredibly exciting. I invited around 50,000 clients from my former commercial finance brokerage (whom we had arranged BTL mortgages for) to follow my blog and around 10,000 did so. They started posting questions and others begun sharing their strategies. Two of my former colleagues then agreed to help me with a hobby which had become more of a project and Newsletters and Social Media were added to the blog. Our readers forwarded their newsletters onto friends and within a very short space of time we had 100,000 subscribers. We then became a Google News feed which resulted in more people coming across the blogs when searching the internet. This resulted in our subscriber base doubling again to the extent that we are projecting circa 5 million page views in 2016. Here is a chart plotting the growth of Property118
With more than 100,000 landlords on the website, property118.com is one of the most popular forum for landlords. With such a big audience how do you manage to keep the discussion relevant and on topic for everyone?
The website is managed predominantly by its community of members. We also run complex software algorithms to detect spam, self-promotional links and to allow members to report abuse, defamation, thread drift etc. Where necessary we warn people and can ban them if they fall foul of “House Rules”, but thankfully this is a rare occurrence.
“Like all good landlords I am reliant upon good tenants” Many landlords seem to have forgotten this simple principle in a race to keep the occupancy rates high. Do you think it’s better to keep a property vacant than to randomly accept any tenant that comes walking in? What’s your secret for finding good tenants?
High occupancy rates are very important, vacant properties are bad news. If properties are priced at the right level there will always be a high level of demand when they are advertised on the major portals, i.e. Rightmove and Zoopla. If they are well presented they will let very quickly. As soon as a tenant gives me notice the property is marketed. Incentives are offered to outgoing tenants to facilitate viewings before they move out and a full refund of deposit is offered plus a reasonable cash incentive to the outgoing tenant if the new tenant can be persuaded to take possession within three days of the previous tenant leaving. I use LettingSupermarket.com to let and manage all of my properties. They charge an inclusive fee of 4% of rent with no hidden extras, e.g. they pay for inventories etc. I pay an additional £10 pcm per tenant for Rent Guarantee Insurance and Legal Fees Cover. If a tenant defaults this means the referencing company (providers of the insurance) would fund the legal costs of eviction and would underwrite my rent throughout the process. Thankfully, due to all of the above, I have never needed to claim. I’d say the pricing and presentation of the property is the most important factor in terms of having the ability to pick and choose the best tenants.
In property management checklist you have laid down 20 items that a responsible landlord should be crossing out regularly. In your experience what points is your average landlord is most likely to skip over? How do you help to ensure that the checklist is being followed?
I outsource this to LettingSupermarket.com because despite having been in this business for 26 years I can still make mistakes. I have a large portfolio but I’m not letting several properties every day of the week like they are. LettingSupermarket.com have made it their business to ensure they have a process to follow and they update it regularly. I think any landlord who believes they can do the same job as efficiently themselves must be bonkers. It is people with very few properties who seem to make the most mistakes, the biggest of which is believing that letting and managing BTL property is easy. Far too many newbies eventually pay a very high price for not paying for professionals to let and manage their properties. One of the reasons I use LettingSupermarket.com is that they are insured for professional indemnity and client money protection. If they make a mistake which leaves me out of pocket I can claim on insurance. That peace of mind alone is worth the 4%, not to mention the freedom that outsourcing the letting and management of my portfolio provides me with. I do still get involved though, there is no such thing as completely passive property investment.
“I really pity the people who think they can just buy a property, let it out themselves and enjoy a passive income.” This myth really should be busted shouldn’t it? Why do you think that buy to let sector has gotten this reputation of being an “easy money investment”?
Sadly, lots of people are greedy and when combined with naivety that’s when they get sucked into believing in the Get Rich Quick myths. I can’t see that this will ever change, not just in the property business but in every Get Rich Quick environment.
What advice do you have for people who are looking to invest in the buy to let sector?
Treat BTL as a business and surround yourself with a good team including a solicitor, accountant, mortgage broker and letting agent. Read property118.com regularly to learn from other peoples experiences so that you don’t fall into the same trap of making the same mistakes. Remember that BTL is an investment vehicle, it is NOT a get rich quick scheme. Do not venture into BTL until you have enough money to invest and more set aside to deal with any setbacks.
And lastly have you enjoyed your journey as a landlord and property investor? If you could start over again what would you do differently?
I have enjoyed my 26 years as a landlord immensely but I’m now coming to the end of my investment cycle. I stopped buying 5 years ago and I’m now selling a few of my properties every year. Logic says that I should have purchased more properties when I had the money to do so rather than spending it on lavish holidays, supercars, helicopter charters etc. However, hand on heart I can’t say I’d really want to change any of that because it was those experiences which made me what I am today. As a result of BTL I’ve enjoyed a wonderful work/life balance despite a few stressful situations on the way. For me, BTL was always an investment into a future which has now arrived. My definition of retirement is to do less of the things I don’t enjoy and more of the things I do enjoy. With that in mind my wife and I are emigrating to the Mediterranean Island of Malta which also provides some particularly useful tax advantages. So that leaves the question, am I retiring? Well yes in a way I am based on my own definition of retirement, in other words I will be free to do more of the things I enjoy such as helping other landlords to solve complex matters involving property finance tax and law.Thank you Mark for talking to us
- On March 12, 2016