We chatted with real estate investor Andrew James to ask how he has overcome recent challenges and saved money to scale his portfolio.
We interviewed Andrew James one of our customers. Andrew is a seasoned real estate investor who has steadily built up his portfolio over the last 20 years. He now owns and manages 20 single family home rentals across the UK along with his full-time day job.
In this interview, we explore what his motivations were for getting into the real estate game, how he has scaled his business to achieve his goals, and the role software has played in saving him money.
You can read the full interview transcript below, watch the video, or listen to it on your favourite podcast channel.
“Landlord Studio makes it easier with my accountant and with its ease of use the software has helped my business going forward, it’s given me more time, helped me reduce costs and increase my income as well.”
– Andrew James
I started by accident. I bought a property behind my sister’s house thinking that I would move into it and then rented it straight away. I immediately saw the potential of the additional income and over the last 20 years have built my portfolio up when opportunities have come up.
First, I wanted to have an additional income stream that could subsidize my normal full-time job. Secondly, I’d seen a few people with pensions and when it came to the point where they needed to get it out it wasn’t what they were expecting and they couldn’t do what they wished. So, I was looking for a better way to plan for the future and retirement for me and my family.
Obviously, it’s impacted everyone around the world, for me, I’ve not been able to do as much maintenance as I normally do. However, I’ve been lucky enough that probably less than 10 of my tenants have had financial problems. My portfolio is mainly universal credit so obviously that covers the majority and has helped keep the portfolio strong as a whole.
They’re very anxious, a few feel that they’re stuck in jobs that they don’t want to be in necessarily, a few have had health issues, some of them are concerned about relatives etc. The ones that have gone into arrears they’re concerned about how they’re going to pay. For them, I’ve done a payment plan over a year which has helped them recover. I’ve tried to communicate openly and said “come to me if you do find you have any issues.” I think everyone at the moment feels confined in their own little world and it’s hard to see further than COVID at the moment, unfortunately.
When tenants have made an additional payment, or have fallen behind the first thing they do is ask, how much do I owe? So, I’ve been generating reports from the software and messaging those over to them as soon as their payments go in, and this has made them a lot happier because they know exactly where they are with their payments.
Other tenants are stressed with regards to general maintenance issues or gas safety inspections etc. To make this easier for them, I’ve tried to arrange it so that the people I use get their first thing in the morning so it minimizes the impact of seeing other people in their homes. Really, I’ve just tried to work with them.
There have been a few issues with regards to a few delays on repairs but I have just had to explain to the tenants that at the moment trying to get tradesmen is pretty difficult, most of them are understanding, it’s about having good communication more than anything.
We’re working on getting our platform ready for Make Tax digital changes that are coming up in 2023 – so I’d love to ask a couple of questions about how you manage the financial side of running a rental business.
I’ve recently changed my accountant which is why I came onto the software. My old accountant was old school, loved a spreadsheet, so I moved across and I’ve now actually given my accountant my second log on. So, I input all my information as it happens. When I get a receipt I go and scan it instantly, when a tenant pays I reconcile it in the app, so it means everything is done in real-time, when I go on a drive I put in the mileage when I jump in the car.
I don’t have to think of it as an admin task that is building up for Friday and then spend time doing it over the weekend. And my accountant will periodically log in and do a quick five-minute check to make sure I’m inputting everything correctly.
It’s making it a lot easier to discuss things as well because you can log in and run reports and see everything. So, once I get my p60 from work I’m ready for year-end. I used to leave it all till December, but I’m about seven months ahead of where I normally am now.
For me I’m bad with receipts, I’m bad with documents, I’m bad with general admin. I can do the manual jobs and I can manage the properties, but the paperwork was getting on top of me.
Then, when my first child arrived suddenly my time disappeared and so I started looking at apps and then about a year ago I went onto a property forum and asked for software suggestions. I trialled a couple of them and decided on Landlord Studio.
I was looking for something where I could scan the documents, input them against the property, and then year on year have reminders for things I needed to do. And the reports were exactly what I needed, the outputs can be manipulated, and if I run a report at any point in time I can see where I am and I’m using it for future projections.
Since I’ve used the software I’ve probably implemented rent increases across 90% of my portfolio because I could see what the costs were, where the profits and losses were. I actually worked out that on one property I was only making £14 a month.
So, I’ve brought all the properties up to the local housing allowance that we have in the UK and that has increased the income massively. Without the software I probably wouldn’t have thought about it so it’s pushing me to where I needed to be, giving me more of a business view.
I have more time, and I’m spending more personal time with my family
Historically it was a case of when tenants asked about what payments they’d made it would take me a couple of hours to go through bank statements. Now I can sit in the car with my misses and check my bank account and if the payments have come in one with one click of a button it’s logged, done and dusted, forget about that tenant for the next month.
It just makes everything easier, and with its ease of use the software has helped my business going forward, it’s given me more time, helped me reduce costs and increase my income as well.
And I use it for my parents too, so I actually log some of their information and then I can do their tax returns at the same time, it means that I can control other information if needed.
This year has highlighted a few issues with my portfolio. With Landlord Studio I’ve been able to see exactly where and what those issues are. So, I’m downscaling, I’m selling one of my properties currently, taking advantage of the stamp duty to try and offload. The goal is to give the rest of my property portfolio more security and make sure the business is where I need it to be, and hopefully, I’ll get to enjoy some holidays at some point.