Property investment can often seem like a daunting venture. But in today’s Telegraph, they look at the incredible journey of Kazeem Alli-Balogun, a young landlord in London who took a retired cannabis farm and turned it into two luxurious flats worth a whopping £1m.
From Humble Beginnings to Property Magnate
For Kazeem Alli-Balogun, a South London native now holding approximately 20 properties under his name, his entry into the market was far from traditional. His first investment was a property purchased in an auction; a leap of faith backed by savings accumulated from varied endeavours, including driving for local developers and running a pop-up shisha business at nightclubs.
Alli-Balogun’s strategy is straightforward: buy modest, spot the dormant value, and mould that value into a reality. He managed to turn a one-bedroom property into a two-bedroom one without planning permission – a move which added substantial value and served the twin purpose of providing a proof of concept, allowing him to see potentially profitable properties lining the entire street.
Applying Golden Logic to Unconventional Venues
Undeterred by the past lives of properties, Alli-Balogun bought and transformed a retired cannabis farm in Crystal Palace into two luxurious flats, collectively worth around £1.15m. Despite the initial hurdles of soil-filled pots, remnants of the farm’s past life, he soon managed to pivot the property into an appealing residence.
This success came from a deep understanding and experience of his locale. Alli-Balogun underlines the importance of knowing your turf, noting that a good or bad road could mean a difference of £100,000 in property prices within the same postcode.
First Step in Investment: Raising Funds
Starting young in property investment has its advantages, and Alli-Balogun stresses the importance of using time wisely. Trading your value, whether it be in the form of manual labour or specific skills, can open doors to finance. This approach helped him gain capital support from local developers he worked with.
While property investment can seem intimidating, Alli-Balogun emphasises the potential benefits that outweigh initial fears. One does not need to understand everything about the business to thrive; a mortgage broker and solicitors are parts of the team that help you navigate this world. He suggests thinking of yourself as ‘the manager of a football team’.
The Importance of Knowing Your Numbers
As an economics graduate, Alli-Balogun knows the language of numbers well. For him, understanding cash flow and contingency planning are integral to being a successful property investor. Drawing a parallel with boxing, he emphasises that unforeseen circumstances are part of the game – every landlord needs to be prepared for unexpected revelations and challenges in refurbishing properties.
Playing the Property Market’s Long Game
As the market fluctuates, with rising interest rates, growing building costs, and stagnant property prices, investing wisely becomes more critical than ever. There are still lucrative opportunities to be found when you look for properties with potential for extensions and scope for adding value.
When it comes to rental yields, Alli-Balogun takes an approach that focuses more on the equity than the income itself. His strategy involves not always refinancing his properties to the maximum, allowing him to access more attractive rates. While dwindling rental yields have led him to adjust his strategy – notably by focusing more on multiple occupancy properties or ‘HMOs’ – his long-term vision hasn’t wavered.
Even when faced with difficulties, such as barely breaking even due to refinancing, he realises that properties held onto for the long term can prove beneficial. He also identifies new trends in the market such as growing interest in house shares which generate high yields; and he conjured up a creative solution – luxury HMOs to attain a balance between affordability and lifestyle for young professionals.
A Modern Landlord’s Beliefs: Tenants as Customers
Rejecting the stereotype of the unloved landlord, Alli-Balogun embraces the fact that he provides a valuable service. With gaping shortfalls in social housing provision causing waiting lists of up to ten years in some areas, the private rental sector plays a crucial role in meeting housing needs.
Alli-Balogun presents a refreshing perspective towards the landlord-tenant relationship, claiming that he views his tenants as his customers. This customer-centric approach makes him particularly empathetic towards his tenants’ needs – favouring secure, stable tenancies that don’t disrupt people’s lives unduly.
In closing, Alli-Balogun’s story is an inspiring tale of unconventional property investment. It correlates with his core philosophy of providing reliable service to tenants, identifying value in overlooked properties, and maintaining resilience amidst market turbulence. He personifies the power of perception and reminds us how understanding local markets, coupled with proper management and relationships, can lead to rewarding property investment journeys.