I’m A Landlord With Six Properties – I Make £12,000 A Month From Rent

Sarah Dawood, 47, lives in Essex and owns seven properties, renting out six, with the value of some increasing by as much as 370 per cent since buying.

Sarah, who lives with her partner, Joe, 45, and their young son, grew up in a council flat in Tower Hamlets and started investing in properties decades ago.

Her parents split up when she was young and she started sofa surfing at friends’ houses from the age of 15, before renting a flat on her own for £450 a month when she was 18. She worked in retail before getting a job at an estate agency.

Sarah purchased her first flat in Barking in 1998 for £51,000, borrowing money for the 5 per cent deposit from her father. The flat has two bedrooms, so Sarah sublet one to make sure she could pay all her bills and repay her father.

“I was always in survival mode and knew I had to get all the bills paid. This was why I decided to immediately sub-let one of the rooms in my first flat,” Sarah said.

After becoming a single mum at the age of 22, Sarah, having received pay rises at work, was able to buy a bigger property. In 2001, she purchased a three-bedroom house in Dagenham for £101,000.

Sarah said: “I let my first flat out to buy the house in Dagenham. I had no grand plan to become a landlord, but I needed to move and ensure I could keep up with all my outgoings. The mortgage rate for the house in Dagenham was high at 7.9 per cent.”

Over time, Sarah continued getting pay rises in her estate agency job and eventually set up her own letting agency business.

In 2003, Sarah purchased her first two-bedroom investment property in Dagenham for £79,000.

Sarah now lives with her family, two horses and a pony in the Essex countryside.

All of the six homes she rents out are in east London or Essex. In total, her rental property portfolio cost £989,495 to purchase.

All the properties were purchased with mortgages and Sarah had to take a profit or release equity from one as a down payment for the next property.

Over time, Sarah has seen the value of some of her rental properties rise sharply.

She said: “The property I purchased in Barking for £51,000 in 1998 is now worth around £240,000. It has risen in value by more than 370 per cent over the years.

“The property I purchased in Dagenham for £101,000 in 2001 is now worth about £445,000. The other Dagenham flat I bought for £79,000 is now valued at around £230,000.

“An investment property I purchased in Purfleet-on-Thames some time ago for £76,995 is now worth about £160,000.”

Sarah also paid £485,000 for a four-bedroom house in Romford in 2007. She lived in the house before renting it out and now believes the property is worth approximately £800,000.

“While the properties have risen a lot in value, I have no short-term plans to sell up. In time, I may consider selling some of my existing properties and moving into commercial property or holiday lets. This is not on the agenda for now, though,” Sarah said.

Property valuations are not an exact science. Online property portals and sold prices in the vicinity can help glean some light on the current value of a property. Sarah has also paid for property valuation estimates via Hometrack.

Sarah, who has started coaching people via @TheFemaleLandlord to help people interested in becoming a landlord, said: “I make about £12,000 gross a month from my rental properties, before costs are factored in. The cheapest rent is £1,025 a month and the most expensive is £2,500 per month.

“I have had to increase the rent in recent years. In April 2017, former Chancellor George Osborne announced that the amount of mortgage relief landlords could claim against their personal tax bills would be restricted. Then, mortgage, repair and insurance costs and taxes went up further and I knew I had to act.”

Sarah added: “In November 2022, I increased all the monthly rental costs for tenants by 20 per cent. I met the tenants in person to inform them of the changes and gave them plenty of notice.”

“I’d often increase the rents by £25 or £50 a month, but knew I had to start keeping up with the market to cover my costs. I still made sure the rent at each property was a bit below the full market rate. Most of the tenants had been wondering when I’d be increasing the rent, as it had been on the low side for some time.

“I now do smaller annual increases. To stay in business, I have to remain profitable. It’s tough, as I know I am taking a further chunk out of my tenants’ disposable income, but I’d been absorbing the additional costs for a long time”.
Sweeping renters’ reforms are being enacted across England as part of the Renters’ Rights Act. Among other changes, no-fault evictions will be outlawed in England from May 1 and evicting a tenant for non-payment of rent will take longer than before.

Sarah said: “What I do take issue with is that serious rent arrears will come into play after three months rather than two. This could become a big issue.
“That said, I don’t think the reforms should be too problematic for landlords already operating professionally, which is how I run my business. I do think, however, that rogue landlords will always be rogue landlords, whatever laws come into force”.