Why I Told My Client to Walk Away From That £55,000 Property
The Opportunity That Wasn’t
I often share insights from my work when I think others might find value in them. This one felt worth it.
A client of mine, who runs an oil rig offshore, asked to speak on a video call about a residential property investment she was considering. The outline was simple. An agency had a house for sale at £55,000, producing rent of £780 per month, in Huddersfield.
On the face of it, I understand why it caught her attention. But my view was clear.
I just wouldn’t do it.
The Numbers Behind the Numbers
Once you take off the agent’s management fee at 15% plus VAT, the rent drops towards £600. After tax and usual running costs, perhaps £300.
Then real-world problems can, and in my experience mostly do, unfold.
The boiler needs replacing. Damp course, kitchen, windows. The roof. Void periods. Legal costs. A tenant who may be fine, or may not be.
Over the course of a year, there is every chance that any surplus simply disappears back into the property. And that is before you account for the time and attention this so-called opportunity consumes.
I asked her why it was for sale.
She said: “They want to buy something bigger.”
My response was: “Surely if it’s that good, they would be keeping it, borrowing against it and moving forward with another one that way?”
The fact they are selling tells you something. Most likely it’s a headache. And in reality, it probably doesn’t earn much money.
And even if it did work out half OK, there is also capital gains tax to factor in when the property is eventually sold.
The Renters’ Rights Act Changes Everything
Residential property can work. But the idea of a low-cost rental quietly dropping clean income into the bank each month will likely bear little resemblance to the practical reality of owning it.
And that practical reality has just become significantly more complicated.
The Renters’ Rights Act has been described as one of the biggest changes for landlords in more than 30 years. The key points are not insignificant:
- Section 21 “no fault” evictions are being abolished
- Fixed-term tenancies are being replaced with rolling agreements
- Rent increases are limited to once a year and must reflect market rates
There are also new property standards, a new ombudsman, a landlord database, stronger tenant rights around pets, greater compliance obligations, and potential fines for landlords who get the rules wrong.
Some of this may be perfectly reasonable from a tenant protection point of view. But from an investment point of view, it matters.
Because an investment is not just its headline return. It is the work, time, tax, liquidity and regulation, all inside the practical reality of owning it.
For what net percentage return? If you’re lucky, maybe 5% when it all comes out in the wash.
What Her Money Was Already Doing
By comparison, her existing investment portfolio that I manage showed growth of 33.21% since she onboarded, equating to 11.44% annualised and compounded over the period.
Of course, markets move around. Values rise and fall. There is no certainty and no straight line. There are intra-year dips of typically 7 to 10%, and the inevitable circa five-year crisis drop of 20 to 30%.
But historically, it has always recovered. Even during Covid, when the FTSE dropped to around 5,000 points, it was back where it had been within 11 months.
And there is no tenant. No boiler. No damp course. No letting agent. No court process. No maintenance calls. No time, effort or struggle.
Just a properly structured, globally diversified investment portfolio, held on a regulated platform, with daily pricing, liquidity and oversight.
More activity, more complexity and more ownership does not always lead to a better life.
The Advice
My advice was simple. Send the £55,000 she was planning to spend on a headache over to Transact, and let me put it to work alongside what is already there.
She thanked me for saving her, and offered to pay me a fee.
At which point I reminded her that part of the job is emotional and behavioural, and involves stopping those who trust us from making costly mistakes.
A Final Note on Property
If you do insist on property as an investment, do what I did in 2016 and buy a commercial site with a tenant on a long-term, self-insuring, self-repairing lease.
Different ball game altogether. That story is coming.
If this resonates with a decision you are currently weighing, let’s talk. We can provide an in-depth portfolio review and show you exactly where you stand.
Contact us today or call 0345 200 4041 to arrange a free consultation.
Originally Penned on 1 May 2026
