At the time Veronica de Lotbiniere took the decision to remortgage the family house and buy four ex-council houses it seemed to her friends a risky venture. But she needed to find a way to pay the school fees, and her instincts told her it was a gamble worth taking. Nine years later, aged 42, she has been richly rewarded and sits on a property portfolio of around £5m.
"Most people were pretty nervous of what I was doing. This was before the buy-to-let mortgage and we had just come out of a recession. But what was obvious to me was that there was money sitting in the value of our house which could be put to good use," she explains.
"I bought those four houses for £30,000 each. I thought they had potential but it was quite a rough area and after a year I sold three but kept the fourth and let it for £500 a month." A small profit combined with another mortgage allowed her to buy a seaside place at auction. Once that had been done up, there was instant equity for another loan.
"It was like stepping on to a ladder," says Veronica. "I don't really sell any more. When there is capital growth I remortgage, taking out interest-only loans." Her empire of 20 properties now extends from Birmingham to Bulgaria, and Hackney to Dubai.
She makes the point that if she can do it, then so can many other people. For her, the pluses are that investment isn't a full-time job and can be fitted in around the family. Her husband is not involved in her enterprise; they have four children under the age of 15 and Veronica is more likely to be found doing business on her mobile at a pony club rally than sitting at a desk at home in Suffolk.
"It's all about making friends with people. You need to keep in contact with them, so that if someone wants to make a quick sale they think of you. A computer is no good for that - not that I can work one anyway."
Veronica's faith in her own instincts has served her well. She may have hit a period of extraordinary capital growth but, as she points out, good fortune cannot be relied on, whereas common sense and diligent research can. In case of a downturn, she protects her investments from collapsing by mortgaging each property individually.
These are the points she drives home during the seminars she runs along with others in the property world, advising novices on how to invest. What they are offering for the £125 fee is not a get-rich-quick-scheme but rather a long-term, building-block strategy. Initially, they might advise buying close to home as did Veronica. When she started straying further afield, she did her homework. For instance, three years ago she bought in Hackney with the Olympics in mind. She is also thinking of cashing in Dubai (already showing a 30 per cent growth over 18 months) in favour of Budapest - "it's in the EU and two hours from both London and Moscow".
A guiding principle of never using her own money if someone else's is available has led Veronica into her latest venture - snapping up property from developers with tight financial deadlines to meet. Just before Christmas she had just five days to complete on houses in Norfolk, the reward being a hefty discount. "If the discount is as much as £30,000 and a lender's valuation is for the full retail price then it effectively has the equity built in." Now that she is known to developers they seek her out and she has begun setting up deals for other people.
Cash-rich investors are often short of time and prefer to use an expert to seek out a property. Richard Artus of Igloo Property Search also finds would-be investors are increasingly looking for help from purchase to letting: weighing up the pros and cons of similar developments is difficult if you don't do it every day. "Rental income, for instance, may be less important than capital growth. And for that you need an area with specific qualities such as landscape and architectural heritage as well as being earmarked for strategic development," he explains. At the moment, he has his eye on Northampton.
A few years ago Richard spotted the potential of Clerkenwell in London. "In 1996 commercial rents there were £10 a square foot but it was surrounded by areas where rents were treble that. It is a matter of putting two and two together," he says.
Veronica has managed to do just that. But has she made any mistakes along the way? "Selling those first council houses. I should have kept them all. I sold the last one for £85,000."
Veronica de Lotbiniere's next seminars are at the Clydesdale Bank, Norwich, on 10 February and 10 March. Details from www.heavenlyproperty.net or 077696 87599
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