In this episode of WealthTalk, hosts Christian Rodwell and Kevin Whelan break down the latest budget, revealing its profound impact on business owners and the ripple effects for anyone focused on wealth building.
They discuss why this budget, led by a historic first for a female chancellor, brought both new challenges and opportunities, especially with its high allocation of funds and the promise of economic stability over the next five years.
Christian and Kevin delve into the increased taxation on wealth and businesses, highlighting the complexity it introduces for various stakeholders and the importance of informed decision-making.
With limited "winners" in this budget, they stress the importance of adapting financial strategies, seeking expert advice, and utilising available resources, including a practical guide crafted to help listeners understand and navigate these shifts with confidence.
Resources Mentioned In This Episode:
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>> Autumn 2024 Budget Breakdown Report [Free Download]
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>> Schedule a 1:1 call with one of our team
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Christian Rodwell (00:25.506)
Come.
Good to see so many smiling faces. And if you can come on camera, it's an interactive session. You get a chance to ask some real experts, some real questions, and lovely to see some familiar faces that I haven't seen for a little while. And just to let us know, you can hear us. Just pop a note in the chat box just to say where you're from. So hello, Andrew. I haven't seen you for little while. Mr. Abaza there. So Andrew in Brighton, for example.
And just wherever you are just so that you know, we get a little bit of interaction going as well So we've got some a reasonable amount of time to really dive deep. So we should be able to get any questions that You've been thinking about when it relates to the budget More specifically on property, but of course Well, look guys. We know it was a budget at first wasn't first ever from a female Chancellor
She did a good job, didn't she? I mean, I can't say I'm happy with the message, but I think the delivery was pretty confident. And when you think about the opposite here on the dispatch box was a first Asian prime minister. It speaks well about our culture, I think. That, you know, although the last time we mixed that round and had a female prime minister and an Asian chancellor, we didn't do quite the same job, did we, with a kamikaze economics?
Wasn't quite as fun, was it? But at least we've got some stability, we're told. So hopefully this is a big budget with lots to talk about, but hopefully not too much tinkering in future years. But in any event, so the first from a female chancellor, the first I've ever seen in my 30 years of being around money, raising so much money. Wow, 40 billion. mean, incredible.
Christian Rodwell (02:24.78)
sum of money to raise in taxes, means, again, for the first time, my biggest challenge was when I thought about it is who are the winners? So many losers. Not too many people could stand up and say, hey, I'm a big winner here. Although I think there might be a couple in the room who can see an opportunity, particularly with the residential tax changes and the property budget that would
would lead us to be thinking about maybe different strategies. So we're here today with Susie Carter and with Kirsty Darkins. And just to give you guys a minute just to say hi and what you do and where you're from, and that would be great. So our audience gets to know you a bit. So Susie. Good afternoon, everyone. Thanks, Kevin. Lovely to be here. So my name's Susie Carter. I'm a charter surveyor. I've been involved in commercial real estate for 30 years now, scarily.
show my age. I've got a corporate background. I was in the corporate world till 2015. I worked for CBRE, B &Q, LandSec, a couple of others, and managed big portfolios of commercial real estate. Since then, I have built a relatively large mixed use portfolio myself, both commercial and residential. So I like to think I'm balanced on both sides. And I also help people
I offer training to help people invest in commercial property as well. Great. Thank you, Susie. And it's always a pleasure to work with you. I know we have done for quite a while now and you're a member of our absolutely brilliant wealth hub. So check that out, ladies and gents. The wealth hub is our place where we build relationships with outstanding people who are brilliant in their field, who almost always have got something special to say.
and they bringing some unique benefit or offer, discount or advantage to our wealth builder members. And welcome another one of our superb wealth hub members, Kirsty Darkins. Thanks Kevin. What Susie said basically, Susie and I are very similar in background, but funnily enough didn't meet in corporate. We only met when we both left in 2015 and started investing for ourselves.
Christian Rodwell (04:50.158)
and helping other investors learn how to invest in commercial property. So I am also a chartered surveyor. I also did the rounds. We even worked for the same companies at different times, which is quite funny. So CBRE, Hammerson, Boots, went on for five years, headed up there, stayed for five years, two and a half thousand properties. So that's where I cut my teeth. And then I left in 2015 as well, had enough of all that, started building my own property portfolio.
And then yeah, teaching and mentoring other investors how to invest in commercial property, as well as sourcing deals for investors who don't have time to do it themselves. So that's all about me. There you go. Thank you very much for that. So let's dive straight into it. mean, really quite a spectacular budget, the biggest brunt, of course, falling on the business owners, but some property changes too. Kirsty, what was the highlight for you?
just in terms of the impact on property owners.
The highlight, well, the highlight in commercial property was capital gains tax because it's coming to parity with residential, which is a bit of a boo from us, but then we have had it easy for quite a long time. So I guess, you know, that was one of the highlights, but I think really the highlight is the impact on businesses because for commercial property, businesses are your tenants and they are your capital value. So we've really got to watch the impact of what came through the budget in terms of elevated costs for businesses.
what that does to their decision-making. Yeah, good call. And Susie, you'd mentioned you've been involved in residential properties. So a few residential landlords would have thrown their arms up in dismay about CGT or stamp duty for them. Do you want to just comment on that? Yeah. So obviously the second home or buy-to-let rate for stamp duty has gone up to 5%. And
Christian Rodwell (06:48.578)
I think we have to put that in context. I never like to be too dramatic about these things. But obviously it's going to have a big impact, especially when people are buying second homes or buy-to-lets in high house price areas. And that's not easy to say because obviously that the higher the house price is, the higher that stamp duty is going to be. And so I suspect if you're buying at null,
it will still have an impact for sure, but it's going to be lower than if you're in a high price area. And I guess kind of some things that we can perhaps talk about coming off that in terms of what's the best way to achieve residential property? Is it going to be going forward, maybe even buying commercial and doing conversions? Because obviously, commercial's got a very different stamp duty regime.
more of a stepped sound duty regime. And the rate eventually does end up at 5%, but you've got a few stages to get through before you get there. So yeah, I think that I know a lot of residential investors are looking at diversifying portfolios and moving into commercial as well. But this might be a little nudge in that direction, I suspect. Well, I suspect the very same too. So if there was a
a glimmer I said there were one or two winners or maybe not even as many as that but I think the commercial property aspect to looking at still building wealth, still building it in property but looking slightly wider and I think the other one for me is just being more creative and recognizing that every no matter how thinly sliced any argument there are always two sides there are opportunities and threats in equal measure and
You know, the biggest amount of wealth is in the baby boomers and the baby boomers are getting quite old, quite tired and often ready. They built up enough wealth that they can sell their portfolios, they can do other things. So there are going to be many opportunities to look more closely at solving their problem and maybe buying portfolios or just finding more creative ways to create deals.
Christian Rodwell (09:11.51)
instead of just looking for deals online. So I think the creativity part of life will come out, which is great, particularly if you're surrounding yourself with like-minded people in environments like this. So what I want you to do, ladies and gents, is okay, is feel free to ask your question. So put the question in the chat box so I can see the questions coming in and I can feel them. And then I allocate them to the right person so that
If you've got a question, don't be shy, get it on there. I'll be looking at those and then we can get into that. But just before the questions come in, I did notice there was a little bit of a benefit wasn't there for hospitality, leisure and retail. Suzy, what do you want to say about that? You mean in terms of business rates? Yeah, in terms of business rates. Yeah, explain the issue and then what the opportunity is. Yeah, so...
Yeah, the chancellor very generously has changed the multiplier for the next year for business rates. So just to explain how the business rate system works without wanting to turn you all off. basically business rates obviously is an occupational cost for tenants and that's really important. So when a new business rates regime comes in and it comes in potentially higher or maybe lower,
you don't get that, you don't get an automatic kind of guillotine that comes down and you have to pay the higher or the lower rate. You kind of get this transitional relief that comes in over a number of years. And the multiplier that was projected for next year was going to be actually so high that it was actually gonna quadruple business rates for a lot of businesses.
and the chancellor said in the budget that it's only gonna be hard, it's only gonna be double, sorry. So it's not, you know, like positive, but is it that positive? I don't know. And they're also saying that there's gonna be a permanently lower business rates for those sectors going forwards. Now, obviously with all these things, the devil's in the detail and that's not being announced. And let's not forget that the labor...
Christian Rodwell (11:33.464)
party also had a manifesto pledge to get rid of the business rate system or to review it and to bring in potentially a new system, which I suspect will never happen. So I think, yeah, there is a benefit, but it's not like substantial, I wouldn't have said. And let's see what gets announced going forwards. But I think the important thing to comment on is that in commercial property,
A tenant has fixed costs. So that's business rates, energy costs, staff costs, costs of stock, et cetera. And the rent they're able to pay is kind of residual of all that. So they obviously can't change their fixed costs, but they can potentially negotiate a better rent. So it's quite challenging as a commercial landlord if there's very high fixed costs to get a really great rent. So in the retail sector, in particular, leisure hospitality, I think that, you
rents will be in some locations and not everywhere. This is where kind of the devil's in the detail. I think that rents will be under some pressure just because fixed costs are going up. Kirstie, any thoughts on where you're seeing the growth in this sort either the tenant type or the type of property that will kind of benefit from the reaction to the changes?
I think, you know, ultimately we always want to mitigate risk and where I always go with the high street is multi-let properties. So not your single lets, but your multi-let where you've got multiple businesses and also your tenant type. So we're seeing the types of businesses occupying high streets change. It's been changing for years. It's always been changing. Actually, I don't know about you, Susie, but it seems to be changing for 25 years, the full time that I've been in commercial property. And that's how it works. So a bit like buy to let isn't dead, but...
Is it worth it? Is the question. I always think that's the question for investing in particular high streets. Is it worthwhile investing in this high street? Is this high street dead? Is it thriving? And actually the ones that are thriving have the tenant mix, which is very varied. So brands and independents, you've got professionals and healthcare mixed in there as well, using what used to be real to retail space as offices. And that's a really, you know, that's a really strong mix. So
Christian Rodwell (13:49.922)
I think it will help multi-let properties. I think it will help businesses make decisions because their costs will be fixed. So rather than having the change coming around every few years for business rates, they'll have a bit more certainty of those total occupancy costs, which helps businesses to plan and to invest and to make decisions. So I guess that's one of the upsides. When it comes to
you economics is always the law of supply and demand and you hear mixed views, don't you, about how many landlords will, will there be an exodus of landlords to the right hand side? Will there be a marching towards commercial property on the other side? And will that have any impact on the price of either? Do you have any views on that, Kirsty, as to what the price of property is just from your own experience of what your reaction would be to what you've seen? Well, I don't.
personally feel the budget's going to have a major impact on where we already are based on other economic factors. So we're already at the bottom of the market in commercial, probably at the start of an upturn, although this might make the upturn a bit slower, I think, while people work out the detail of exactly what is happening come April 25 and before for some of the changes that are happening. So I don't...
actually feel this is going to change play. I feel very much keep calm and carry on and that there were already many investors looking to diversify into commercial for reasons other than those that have come through the budget and that that is likely to continue. I do think one area where people have got a lot of questions, the area that where I've had the most questions in the last week
are SaaS pension investors trying to work out what does it mean for how I invest my pension funds? And of course, because you can invest pension funds directly into commercial property, and many of our clients do, I invest my own pension in commercial property as well. People's roadmap has suddenly become a bit blurry and everybody's feeling like,
Christian Rodwell (16:11.95)
Is this the right thing to be doing? I don't know. Now I've taken some advice from a couple of IFAs that I work with and I have some, you know, which has given me things to think about and have my own view. But I think there are a lot of questions around that and I can see some popping up in the group as well. Yeah, there's definitely some SAS questions which, you know, I'll be able to get to in a second. But just to remind us of one of the questions was.
What is the actual rise in CGT? Well, the main issue we talked about was the stamp duty increase, wasn't it really? And the CGT from our property perspective, well, it's been on other CGT rises for other assets have just basically caught up with property, haven't they really? So no dramatic rise as far as property is concerned, but definitely a rise if it comes to selling other assets. But it is a rise for commercial property though, Kevin.
All right, yeah, go on, explain that then. So we weren't on the residential rates. We were at 10 % and 20%. And now we're at 18 % and 24%, the same as residential. So it's actually quite a big change for commercial property investors, particularly if you've got a flip strategy, and you've now got quite a lot more tax. Yeah, good point. You've got to build that into your numbers going forward. I think everything is about building numbers and
If look at the, I haven't committed the numbers to memory, but if you're buying a half a million pounds worth of property from a Rezzi perspective compared to a commercial perspective, what would be the likely difference? 50 % or thereabouts? Or what are your thoughts on that? The likely difference between? duty, buying Rezzi property for say half a million. yeah, stamp duty on a, yeah, about 50 % actually.
between commercial and residential. So commercial is always a lot less. So you've got to factor in the acquisition costs, then what your strategy is to when you might exit to work out the impact of CGT. But this is the same as it's ever been, isn't it? You've got to do the numbers. look at what the issues are. OK. I think, Kevin, as well, I think the very first person I ever speak to when I'm structuring a property transaction is my accountant. Because I think structure can really help.
Christian Rodwell (18:37.006)
with all of this stuff. So for example, if you're paying corporation tax because you're holding a limited company, obviously that's a different regime and therefore, you know, that's not changed. So I think, yeah, kind of the best tip I can give is for, you know, structure it properly. And don't forget actually, if you're buying residential, there's six residential properties or more, fours under commercial rates. So kind of portfolio purchases, et cetera, can actually benefit from that.
Yeah, that's a good point. So what's your your experience, Susie, the propensity for someone with SAS to be putting some of their SAS into commercial property? Kirsty's already mentioned she's seen a lot of that. Yeah, lots of my clients are doing that and I'm doing that myself as a SAS holder. So, you know, it's a fantastic vehicle for that. And I think we mustn't panic about
all this because the devil, I'll say the devil hasn't come out, but the details not come out in terms of exactly the impact. There's always ways, know, should we all be setting up a pension trust now? I am not qualified to talk about any of that kind of stuff. I'm not an IFA, but you know, I think I would just kind of get everyone to seek advice as early as possible and wait for some of the detail to come out. I think the overwhelming sentiment from my point of view is that
Whenever there's negative headlines about things, there's always exceptions to every rule and there's always ways where you can actually benefit from it. So, you know, for me, it's about finding the needle in a haystack opportunities. When everyone, you know, when everyone's saying the high street's dead, there's always high streets that are booming. So, you know, invest in those, you know, stay in your lane, do what you know, look at supply and demand. The same will be true of...
you know, all the other things that came out, will be opportunities within them. I guess kind of just it's just it's just kind of not panicking and carry on as Kirsty said in terms of, you know, just stay in your lane and do and do what you know, really. Well, I think it's important for everyone. Whatever happens is always changes on their economic circumstances, change political budgetary that we're talking about now, of course. And I think it's important always to be
Christian Rodwell (21:02.072)
what I call financially fleet of foot. You know, you, you got a strategy, but you've got to be flexible to go with what you see. And that includes not just strategies, you're always looking for property. Everything flows downstream from finding deals, but then looking at being able to create value from every deal you see, as opposed to trying to pigeon hole yourself into a single strategy. Is there a few people are asking if there are any sectors that either of you feel
in terms of commercial property that there might be a glimmer of light, anything on that, There's always glimmers of light everywhere. I'm not saying... Look, I'm an optimist person, I always live on that side of the fence, but in all seriousness, high streets are the most misunderstood opportunity we have in commercial.
So many people believe the rhetoric, high streets are dying, high streets are dead, high streets are, no, they aren't. And we should always be greedy where others are fearful. And so for me, the focus on fixing those costs for retail hospitality, leisure, RHL properties only strengthens the strong high streets further and helps those businesses. So I'm just going, well,
I was going invest in even more high street because I tell you, industrial is often seen as, you know, the star of commercial. Now I invest in industrial myself, but I'm telling you the cost base for industrial is becoming ridiculous because rents have been going up and up and up and up for five years and the business rates have increased with the rents. And now the bigger logistics and manufacturing operators are going to end up paying even more business rates.
with the new system that's coming in. for me, the sweet spot is knowing how to find investable high streets and investing in the right properties within them. Yeah, good point. Anything you want to add, Susie, in terms of that? Yeah, I I agree with the cost base of industrial. I really love industrial. It's one of my faves.
Christian Rodwell (23:26.926)
And I think that there is a direction of travel where, you know, now with a big push on housing, you know, the Labour Party, you know, is to build a 1.5 million. Let's see how that goes, shall we? But, yeah, I think what we're going to see is local plans now, virtually every available site is going to be allocated for housing because there's housing targets being put in.
And we all know that there's a growing demand for industrial. It serves a lot of the trends happening in our economy right now. And there's just not gonna be enough of it. So, and yeah, there's not gonna be enough planning granted, there's not gonna be enough land allocated to it. And so therefore, not in every location, again, this is the kind of, this is a skill in investing. In some locations, supply and demand is going to be, so no matter how high the cost base.
There's going to be opportunities. And of course we've got all these big announcements of investment. You've got your infrastructure investments that are gonna improve certain towns across the UK. You've got your free ports. I mean, I have to say I'm slightly cynical about free ports. I'm old enough to remember enterprise zones and we know how they ended. I think we take all of this with a big pinch of salt.
But there are definitely going to be localized opportunities where savvy investors will be able to make a reasonably large amount of money from some of these opportunities that being announced. And there are a few people asking questions about the likelihood of any changes or your own thoughts on the commercial to residential opportunities. So where residential is.
being hit by higher stamp duty and so on. But the commercial to residential affords an opportunity to increase the value because the pounds per square foot of a commercial premises is less than the pounds per foot of a resi one. So what are you seeing in that way, Well, I focus mostly on commercial investment rather than commercial to resi because I find commercial to resi a very competitive crowded space.
Christian Rodwell (25:51.47)
If I'm honest and bill costs have increased so substantially that actually in my investment patch, if you're in the southeast, it's a different matter. But in my investment patch in the Midlands, it's very difficult to get the numbers to stack, to be honest. And also there are lots of ways in commercial property to add value without doing any physical development work, which as I get older is my preference because I like more holidays and have more freedom. So, you know, my own reason for investing is time freedom.
And commercial to Rezzi doesn't do that for me. Now, undoubtedly there are buildings, particularly office buildings, which need a repurpose and edges of high streets. so undoubtedly there are opportunities, but everything I hear from clients who are in that space or who are diversifying out of that space is there's such high competition for deals that it's hard to get the numbers to stack.
And so I've really stayed away from it for the last couple of years. And my focus and my tip actually is to look at commercial to commercial development, because not many people are doing that. And what do I mean by that? I mean, for example, the property I've just converted from one industrial warehouse into five separate units and tenanted and intensified the use and uplifted the value substantially. mean, a high street unit where I've got Greg's
on the ground floor who are now extending all the way back into the rear of the ground floor, new 10 year lease, refurbishing the first floor, letting that to a commercial tenant and keeping it all commercial. And that blows some people's brains. They go, I didn't even know you could do that. So I think that's, you know. That's great. Another bit of great, they're from the Northeast, man. You have your study cakes up there, but you can't get them down here. All you can get is your pasties and your pies and your- And sausage rolls, yeah.
Big bag, Are you seeing anything different, Susie, on that? Yeah, I mean, I definitely agree with Kirsty. I've literally lost track of the number of clients that have come to me with a commercial to residential conversion. And the very first thing I say to them is, right, let's look at the commercial base case. And actually, I would say nine times out of 10, the commercial, five years, the commercial stacks better than the commercial to resi conversion. Not everywhere, granted, but in a lot of locations it does.
Christian Rodwell (28:16.302)
And it's so much easier, know, doing a lease renewal, having a tenant there, being hands off on a full repairing, insuring lease, what's not to like, I've done it myself. And, you know, for me, that's much easier way of making money than getting your hands dirty and doing How about you explain what an FRI lease is to those who are uninitiated on it? Absolutely. So it's one of the wonders of
the modern world, is a very uninsuring lease and commercial property. So for repairing surely so is basically where you hand the property to the tenant at the beginning of the lease. They have a responsibility for repairing the inside and the outside of the property and ensuring it all. And when they hand it back to you, they have to hand it back in the same condition that you gave it to them. Same. I assume or better. Yeah, well, yeah.
Bit of wear and tear allowed, but that's about it. so, I I definitely never advocate passive income. There's no such thing as passive income, right? You always have to check in on tenants and stuff. But in property, it's about as close as you're gonna get because if you think about what you have to take off your residential income, you avoid your maintenance, et cetera, you're not gonna have to do that.
with a full repairing and shoring lease. So it's a really, really good thing. I definitely think that multi-let is absolutely the way to go. Again, when I have a lot of clients coming to me looking at office buildings to convert, multi-let, multiple occupation, lots of different uses, storage, beauty, salons, et cetera, in an office block and work super well.
One of my clients has just doubled the value of a property by doing that particular strategy. And if I may, Kevin, just one more thing on that, I think, is one thing that obviously the Chancellor didn't talk about permitted development rights. And obviously that's one thing that's really fueled the commercial residential market in the UK. Well, sorry, in England rather. I suspect, and I've kind of put a small wager on it, I might be wrong, but I suspect that I think probably January time, beginning of the new year,
Christian Rodwell (30:34.52)
there will probably be some announcements on permitted development. I don't think that the Labour Party, I might be wrong, but I don't think the Labour Party is going to necessarily get rid of permitted development, but I suspect there might be an element of affordable housing come into permitted development. Previously, the Labour Party has been talking about, you know, we're going to get rid of it, but it provides 20,000 homes a year. So are they really going to, if they've got this big housing target? I don't know, but I, you know, they're very hot on social housing, affordable housing.
So I suspect that that might be introduced into public development, in which case, obviously, that's going to potentially make those conversions more challenging. So much for the stability that we were promised, you if we're going to get other big changes in businesses that we're in. John was saying that he thinks the planning system will completely choke any plans for more housing. Kirsty, any tongue in cheek comments about the planning system? What system?
Did you share his view or did you have a different view? I don't know if it will completely choke it. think, you know, there have been steps, positive steps over recent years to try and unblock the systems. The main issue is going to be resource because the councils simply do not have.
enough planning officers, there's not enough resource. if you're going to, you know, with that target, what needs to happen is investment or funds for councils to recruit many more planners into their team, because without increasing the resource, you can't increase the output. You know, so I think that's where the challenge really is. Anything to add to that, Susie, do think?
Yeah, I I think just to add to that, mean, I think 300 new planners are being announced. I think that's probably one per local authority. They're all going to be graduate planners. So I'm not sure that's going to really ease the workload, to be fair. So, yeah, I mean, obviously, that's where permitted development does come in, because you get kind of better speed and certainty of moving forward with planning. But yes, I I think we all know as property people that there is
Christian Rodwell (32:56.002)
there's just unrealistic targets being bandied around. So, you know, good luck to them. mean, genuinely, the planning system needs to be overhauled. And if they manage to do that, then I think that's that that potentially is good. But I think it's going to be challenging. Many governments have tried and failed. And I think David is thinking there might be some link between the the pernicious tax
on farms, know, we know that previously they could pass on their farms inheritance tax free. Now we know that's changing with the ceiling of a million and then 50 % after that, he thinks there might be some linkage between taxing farms to free up land for some of these 1.5 billion houses. Do you want to say anything about that, Kirsty?
Yeah, I'm not sure that's a smart strategy, personally. think it's fraught with difficulty and that a lot of those locations are not where people want to live. And they're not surrounded by the right infrastructure or the right amenities. So I think it's ill thought through, personally. Yeah, I can understand your point. I think I'll make a point because there's been a few questions about SAS.
And of course, the biggest change that I've ever seen when it comes to anything to do with pensions has been the sudden and unexpected, I suppose in the long term anyway, the speed at which they're bringing in the inheritance tax on basically unspent pension funds. So historically for money in a pension pot, so money that goes up and down, not final salary schemes, not...
public sector schemes or defined benefit schemes. There's always been a rule that said, you you can build up the pension part. It's you get your tax relief going in. You've got capital gains tax on the way up free. So you've got no restriction from capital gains tax. And you've got your 25 % tax free, which was always been there. Actually, you know, bizarrely, there were thousands and thousands of people.
Christian Rodwell (35:18.968)
who took their tax-free cash early, just before the budget, because they were fearful the government might introduce a restriction on the tax-free cash, but they didn't restrict it. It's bizarrely 268,000 give or take, which is 25 % of the previous lifetime allowance, which is bizarre, because they've abolished the lifetime allowance. So there is no lifetime allowance on pensions. You can have as much as you like in your pension, in your SAS, in your SIP.
in your personal pension, but all pensions, and I repeat this because some people have thought because a SAS is a multi-member scheme, somehow it escapes the inheritance tax issue, it does not. So all pensions will be subject to the potential of inheritance tax on the death of the person who owns the money. Now in a SAS, essentially like any other pension, each person has got their own kind of pot.
so to speak, and you build your pot up because you need to calculate tax-free cash. But if you die and you've got a... Excuse me, I'm coughing because I'm so affected by it. If you die and you've got a substantial pension pot, which my spouse is quite substantial, you leave it to your spouse as no inheritance is taxed between spouses. But hitherto, if you died and your spouse died...
you die before 75, there was no inheritance tax at all. So essentially, it would be part of your estate, but eliminated from it from the purposes of the death before 75. So there was never an inheritance tax bill for early death. There was never an inheritance tax bill on death after 75. It was just how people took the money out, be subject to their income tax rate.
But this inheritance tax loophole, as Ms. Reeves has argued, has now been closed so that the assets inside a pension are treated as part of your estate. So a few people think, maybe because I've got a multi-member scheme, I escaped that. You don't. But let me say what a SaaS can do and only a SaaS can do. You can't do in a SIP. You can't do in a personal pension.
Christian Rodwell (37:45.666)
you definitely can't do in any defined pension is because you can have multi-members and a SaaS typically can have up to 11 members maximum. So quite a big family. So if you've got a situation where you've got a husband and wife and three grown up children, I often use that as an example, cause it's my example, then just as before we could use earmark, nudge, transfer gradually.
benefits between older generation and the next generation the reason we were doing that before was for lifetime allowance purposes, but when that changed you need to do that anymore, but if you think about inheritance tax if you've built up a Substantial fund and you're not worried about drawing the income from it. You're not trying to squeeze the income from your SAS then you can nudge growth With with same members and scheme down to the next
generation so that you can gradually start to ease the inheritance tax. Now, of course, as you said, Susie, the devil is always in the detail and we have no details yet because we've got a two year consultation period because this is going to need an industry to manage it. In fact, just like VAT, it's the it's the it's the industry that collects the money and pays it. This is their argument that they're going to say if there is inheritance tax due.
then it's the trustees who have to pay the money. And none of these people have got a system for it. So it's going to take them two years and probably have to incur costs to create a system to pay the tax. What I'll be doing is in a separate session, not this one, is hosting a separate pensions and inheritance tax session because of the, you know, the demand for it to talk specifically about how you could do that.
and the difference between all different types of pensions so that there might well be a stronger case for SAS than ever before. Not just based on the fact that you can invest so widely, you can lend money to your company, you can invite other members in so you've got more money. So it means potentially you could do bigger deals because you're combining money. But this whole issue of inheritance tax could be helped as well by that. So you've been getting any?
Christian Rodwell (40:11.342)
Questions, even if you're, you know, you've got a SaaS but the expertise isn't always there when somebody's got a SaaS, but are you getting any questions on SaaS, Susie, or have you had any people make comments on that? Yeah, no, I think certainly for clients who are kind of moving towards the pension age, it's definitely very pertinent for sure. And I think we do await the details on it.
And so yes, and I think there's Kevin that there's there's been questions around Gosh, should I take my lifetime allowance now? You know, should I you know, should it should I move it into my estate? know, and I think I you meant the tax free cash tax free cash. Sorry, that's what I meant. Apologies. Yeah, so I think there's yeah, there's some uncertainty and I think it's probably one of those situations where it's kind of keep calm. Let's just see what the detail is get some good advice and then
kind of make some decisions really. Yeah, so maybe you could help me in the chat box. So if you'd be interested in attending a session, which is on the inheritance tax mitigation techniques using pensions, just put IHT or yes or something that flags that, then we can invite you to a session on that. lots of people, right? They're piling in.
they're piling in, is great because it's important, isn't it, that so many people have planned for decades. Look at me, I'm a baby boomer. It's not my first rodeo. I've been planning my pension for a long time. I'm not very happy about this, but I'm going to have to do the best with my planning, which is the reason why it's important to surround yourself with great people. So talking about great people, Kirsty, we've had...
Somebody say hey all this talk about the just for units and high running costs What do you mean by that and why these costs not passed on to the tenant?
Christian Rodwell (42:12.75)
You're on mute. I just realised, sorry, it got noisy in my office so I was on mute. The costs are passed on to the tenant but that's the problem. as Suzy's already alluded to, for commercial property in particular, total occupancy costs are what matters because the more other costs tenants have to pay, the less they can afford to pay for rent.
and the more it affects their business. So business rates are for tenants to pay, but they've gone up a lot because rents have gone up a lot because rateable values are an assessment evaluation of market rent at a point in time. So when the business rates revaluations were done in 2021 and implemented in 2023, industrial business rates went up considerably. And now what they're talking about for the bigger occupiers is that they will bear more of the weight and they will pay
a higher multiple in the pound for rates payable. So all of that means that on top of national insurance contributions, minimum wage rises, there's additional business rates to pay. So this is all your tenants total occupancy costs and the cost of running their business, which then impacts how they might decide to use space and how much rent they can pay. So there's no particular cost for a commercial property landlord unless
property becomes vacant, whereby you have to carry the cost of the rates as a landlord. So it is weighted on the tenants, but we've got to understand that tenants are businesses and businesses will make decisions just like we do as investors, differently, depending on what's true of their tax and cost environment. Yeah, well explained, very well explained. I'm seeing a lot of people
making observations, Suzy, about things like storage units and so on and buying land to put storage units on and making a chunk of money from that. So any thoughts on that? gosh, Kevin, I could talk to you all afternoon about that. was very close to setting up a self storage business about five years ago. So I definitely could definitely could talk through that. So
Christian Rodwell (44:36.598)
Yes, I mean, it's definitely de rigueur as a strategy. A lot of my clients are looking at that as well. I think, I mean, I think first of all, it ticks a lot of boxes in terms of socioeconomic trends. If you compare America, Australia, and their kind of amount of storage per capita, the UK is lagging far behind.
So you wouldn't think so, the amount of cell storage there is in this country, but that is actually a fact. And obviously it ticks a lot of boxes in terms of trends in the economy, know, smaller houses, more disparate families, there's a lot of B2B storage as well. So there's a big tick in terms of that. I think where the devil in the detail is, is in terms of where...
the cell storage is and kind of what kind of cell storage it is and how you structure the deal to buy the land or the property. So, you you take your big cities and big towns, you've got your big yellows, your access, et cetera. They're kind of, you know, that seems like there's a cell storage, big building on every corner and they probably are.
So you really want to be looking at a tear down from that. I think that there's obviously a lot of self storage on farms and things. And actually, if you put containers on farm yards, it can be seen as a temporary use and therefore you don't necessarily need to get planning. Obviously, if it's on for a decent amount of time, that's probably no longer temporary. But that's an angle that a lot of people are looking at.
If you're looking at those, I mean, for me, where the money is in self-storage is those in between towns, over 20,000 people, but less than the big cities. So the places where the big yellows and the access, just they don't have enough people and they can't get big enough buildings. But those locations where there's enough people to support a self-storage business and...
Christian Rodwell (46:48.142)
I guess kind of there's plus size and downsize of cell storage businesses. The plus side is there's huge demand. can build some good turnover. You can increase rents. You're multi-let, so you're not reliant on one tenant. if a couple don't pay, then you've got like 90 % of people over here or more that are actually going to pay you. And that's why lot of the big funds are looking at cell storage now, because they like the diversity of income.
I think if you're looking to buy a freehold and run your own self-storage business, there's definitely risks in terms of financing because that's seen as an operational business. So it's quite challenging to get funding from day one. you're not on an arms length investment basis where you've got a tenant taking a lease. And therefore that's quite challenging from a funding point of view.
You need a couple of two to three years of accounts and then you can get it. And it's very, there's a lot of people do it as an opco propco. So they hold the self storage property in their pension and then they operate the business in their limited company. And that isn't seen as an arms length transaction from banks. So they kind of penalize the valuation initially on that until there's a track record.
You can automate cell storage now, so it's much more hands off than it used to be. So that's probably like, plus probably enough. yeah, but there's, you know, so I think probably the summary is that there's, I think there's still some really great growth in that, but don't, you know, there's quite high startup costs, quite a lot of capital that's needed. If you can find a tenant that will take the property, it's a great use every day of the week.
But yeah, there are kind of some trip hazards you need to know if you're setting up a self storage business. That's a good point, particularly about the financing. So those people with decent sized sasses could probably be their own bank as opposed to using somebody else's bank. Did you want to comment on self storage or any other niche that you're seeing some of your students looking at now, Kirsty? I think that on self storage, my
Christian Rodwell (49:05.784)
The only thing I would add to what Susie said, and you did allude to it, is you always start with the end in mind with your investing goals. If you don't want to create a hands-on business, self-storage might not be for you unless you can find an operator to take a lease. So you've got to really think about the structure of the deal that you enter with self-storage, because otherwise, a bit like service accommodation, you create yourself another business, another job, effectively.
Now, one of the niches, like I alluded to earlier, which is commercial to commercial development. And now it doesn't have to be full scale physical development. It can be commercial to commercial with just a small element of splitting units into smaller units, repurposing space and like refurb. So I have some clients who were looking at banks in that way, interestingly. So there's a lot of people looking at banks for a commercial to residential conversion, not so many.
looking at banks, think about where banks are. They're in commercial hubs. So there's a lot of people now starting to look who are in the know at banks as, hmm, okay, we can't get commercial to REZI to stack in this location because the REZI values aren't there. So, you know, that goes for a lot of the Midlands and the North, I would say, and probably some locations in the South.
What else could you do with it? Well, the ground floors lend themselves really well to users like restaurants, for example. And then the upper floors lend themselves really well to offices, to gyms, to yoga studios, to professional services, to healthcare services. And so I've got a couple of clients who have found that niche and are doing just that. And actually up in the Northeast, you know, Patch, Kevin, I've got a client at the moment who's just offered on a bank.
Lloyds has been in situ for 150 years. They are leaving in two years time. Well, their lease runs out in two years, but they're vacating actually in January. And they've already got a firm of lawyers upstairs on the first floor that they sublet to, clever old Lloyds. And then there's also a second floor that's just not being used. And that is a perfect CMO, commercial multiple occupancy property, where most people are looking at that from a
Christian Rodwell (51:25.698)
how do I convert it into residential perspective? But you all know what the capital values are in the North East. It's hard to get them to stack, whereas actually, commercial stacks all day long in that location, and it's a high demand location. So I would say commercial to commercial development is a niche that I don't find many people focusing on. Yeah, it's a good point. We've definitely seen some of our SAS clients
see that niche for themselves and using their pensions to buy property then convert it into almost a multi-let or smaller tenants so that it, know, separating the utilities, making it really easy to do and creating a high yield for that. no, that's a, that's definitely a good chat. I'm just going to pick on a couple of pension questions because as usual, pensions are a little confusing. Somebody's saying, where is it?
Does that mean the money purchase allowance is no more? Well, the money purchase annual allowance has got nothing to do with inheritance tax. The money purchase annual allowance is how much you can pay into your pension, essentially, which is still 60,000. So you've still got the 60,000 contribution. You've still got the ability to mop up previous tax years, up to three years as well. You've also got within SAS the
what's known as the general unallocated fund, allows you to put in half a million pounds in one single year and get the corporation tax back in one year. So there's still some incredible opportunities. And one of the things that sometimes worth restating for people is, when you're looking at your pension part, you're getting corporation tax relief for 25%. Then instead of paying the dividend tax, which is now pushing
40, isn't it? 39%, give or take. You add those two together to get money out of your company, it's going to cost you 60 % of your money. Whereas if you pay the money into the pension, you get your corporation tax back, you don't pay the dividend tax, but you've still got a loan of up to 50 % to your company to do more interesting things. And you're still growing your pension fund completely CGT free.
Christian Rodwell (53:51.914)
Lots and lots of real good benefits why, you know, a SAS pension in particular, or any pension really, a SIP can buy commercial property all day long as well. Or certainly most SIPs can. But the issue with, somebody's asked a question, which is an interesting one, which is if I've got a commercial property, which is there inside my SIP or SAS, let's say, and I die,
I'm, it's the inheritance tax only on the cash that's left over. Nice try, but no cigar on that one. I'm afraid what would happen is your whole pension would be revalued, including the value of your commercial property in that. So you can't really avoid the tax just by holding property as opposed to holding other assets. All assets get caught into the same trap. And also as a SaaS can't own a company.
Some people think it can, it can't, because it can't be sued, it's a separate trust fund, so it can't own a family investment company, it can't go into alphabet structures because there's no shares, so it just doesn't work. So there's a whole bunch of tax issues going on on there where investigations, they've created this new interesting rule within Unrevenue, which I think is quite fascinating, which is we're giving you some guidance.
but we reserve the right to go against our guidance if you think you're trying to avoid tax. It's like, how does that actually work? How do you actually make a plan when they can say, well, we think you're being a bit too aggressive with that. We're not going to let you do it or we're going to bring that into the tax net. you know, just it's quite a fascinating change with the government and HMRC on anti avoidance. So family investment companies getting caught in that at the moment. All right, let's see if we've got any more.
Questions? Yeah, a lot of people getting confused also, I find, with the difference between HMO and is it commercial or is it not? So let's go with where HMOs fit into this whole commercial property regime from both of you. Then I'll tackle the issue from a SAS perspective. Kirsty, HMOs commercial, what are they? Are they not? Are they Rezzy? What are they?
Christian Rodwell (56:14.136)
They're resi, but they can be valued on a commercial basis for lending is the simplest way that I explain it, unless you're using HMOs on a supported living basis where you've got a five-year commercial lease, for example, to a supported living provider when it does become commercial. So if you're running a HMO as a HMO for residential tenants, room by room, it's not commercial in my view.
It can be valued on a commercial basis for lending if it's big enough If you're running if you have a HMO and you're actually using it for supported living and you've got someone like Circo in there on a five-year lease or longer or another provider housing association then it becomes a commercial investment property Hmm anything to add to that Susie Yeah, obviously bigger HMOs fall into sui generis
So it is, yeah, but absolutely agree with all of everything Kirsty said is absolutely not commercial. And yeah, I think in terms of supported living leases, obviously a lot of people get those valued on a commercial basis, but if that ceases to be a supported living property at the end of it.
then it is always going back to being a residential property. So that's just a bit of a trip hazard to watch out for. Interesting, because I get two questions. You have the pound in the pocket question. If I had a pound for every time I was asked that question, one is, HMO, can get a commercial mortgage, so I must be able to own that and hold that in my SAS, can't I? No. If it looks like residential, smells like residential,
It's residential, you cannot own it. Do you know what? They could solve the one and a half million houses if they just allowed pensions, particularly South sister owned residential property, then, you know, they'd have all this money that's available instead of avoiding it. They had to go with this. I think 2015 they had to go with it, but all the money was threatened to go overseas to buy properties in Portugal and Spain and so on. So they changed their mind. So I don't think they're going to change their mind.
Christian Rodwell (58:32.726)
anytime soon. Blocks of apartments, how does that work from your perspective on commercial or what you're seeing as an opportunity? So Susie, what do you think about blocks of apartments? You mentioned six or more a little earlier. Yeah, so obviously it's still residential, but it does fall, if you have six or more, it falls within the commercial stamp duty regime. So that's a definite benefit of that.
I do actually like, own blocks of apartments actually in our residential portfolio. And I do like it as a strategy because when you, very often when you work back the, you if you buy the block and you work back per flat, what you're buying, you get a big discount. There's definitely trip hazards with it in terms of, you know, valuation. if it's kind of 10 or over,
you very often get, or maybe even less actually, you get a reduction. Value is, know, acting people at Shorebrook and Interbay, they tend to take like 10 % off for volume. You can get commercial values or you can do title splits, which is a nice strategy where you can title split off each flat and get different mortgages on them. And that's a nice strategy, but it's not a commercial strategy. It's a residential strategy. And just to confuse.
everything, know, build to rent is actually quite a well-worn path now in like it's classed as commercial real estate, but it's still residential. Yeah. And the way I always explain to people, I think a bit like Kirsty really, which is, know, in essence, if people are living in it as normal families live in it, then you're not really going to be able to hold that in your pension and don't think that you can just because you can get a commercial value on it.
But of course, if there's care associated with that, and there are other qualities that if you're looking for children's homes or student halls of residence, you can even buy a prison with your spouse, although, you know, I don't know how Serco would feel about that. Very interesting to see the number of Labour Party MPs who own Serco shares and not supposed to, but there you go.
Christian Rodwell (01:00:52.334)
That's another interesting diversion, often checking out what's going on with MPs and how they're declaring their interests. Not many of business owners by the way and a few of were members of the Communist Party when they were at university. Yeah, not many business owners at all. Okay, is there anything you want to say Kirsty on title splitting? Well look, title splitting works in commercial as well, so yeah, title splitting.
Apartments can be a great strategy, but at the end of the day, as Suzy said, residential is residential is residential. You know, it's never going to be commercial. think about commercial. The easiest way I have to explain it when clients come to me is that commercial property is a property occupied or capable of occupation by a business tenant. So that's how we need to think about it. So everything that's not occupied or capable of occupation
by a business is not a commercial property. How simply and succinctly put. So that, yes, that's where I always go in trying to clarify what's commercial and what's residential. And I think it's the valuation and funding of assets that confuses everybody and the basis that they use to do that. But ultimately, if your tenant is not a business, it is not a commercial property. And Susie, given that
We're all in business entrepreneurs to solve other people's problems and that's the essence of entrepreneurship at its truest level. What are you taking away from the way businesses have been affected by the budget, almost circling back to the beginning, that you have to take into account when you're thinking about, this could be a tenant for a property for me. So how sympathetic or what have you seen that you've noticed of how business owners have been, at least on face value?
impacted by the budget changes and then maybe it'll be interesting in the future to see how they actually react to it. Yeah, so business owners costs have gone up not only with business rates but also national insurance minimum wage and small businesses are going to be hit most for sure. So that is a problem for some small businesses and
Christian Rodwell (01:03:18.35)
You know, I think it's always difficult doing a covenant check, you know, checking the quality of your tenant to make sure you get it right when you're letting to a commercial tenant. It's obviously crucially important that you understand them because it doesn't matter if you've got a 10 year lease, a 20 year lease or a 30 year lease, if only we got 30 year leases. But then, you know, if the tenant is not going to be around that long, then it's kind of irrelevant. So you need to make sure the tenant is going to be around for long enough.
So tips I would give for that is whenever you're letting to a small tenant, try and get personal guarantees, guarantors. Personal guarantees are absolutely ideal. Guarantors, maybe rent deposits, although I'm not a great fan of rent deposits because they tie up working capital in the business. I think as we've been saying, affordability has been affected. Affordability of rents is now being affected. And that's going to affect different sectors differently.
And so it's really dangerous to generalise in commercial property. And I love seeing negative headlines in the press because it means that there's some lovely little niches that we can all take advantage of. Kirsty's rubbing her hands with Glee too. There's some lovely little niches that we can take advantage of that when the masses are running that way, we run this way. so the fundamentals of commercial property stay the same. It's all about supply and demand.
It's all about, a tenant going to have a choice of 30 properties to go to and therefore they're going to be like negotiating hard to get flexible leases, big rent free periods, short leases, or is it a desirable location where tenants will trade well and therefore they want to take a decent length of lease at a decent rent? And you know what? The fundamentals of that won't change. So I think it's one of those where kind of
recognize some of the threats, but equally, as we said earlier, stick to your lane, invest in those locations where you can ascertain supply and demand. what's one of the most common questions I get actually is how do you do that? And you really do need to get to know your investing niche really well, speak to commercial agents, walk the high street or the industrial estate or whatever you're looking at, talk to tenants, find out how they're trading.
Christian Rodwell (01:05:43.634)
with all relatively straightforward things to do. And if you invested in niche, you'll really get to know it and, you know, kind of like hear the headlines. But, you know, there's some amazing opportunities out there in commercial. It's interesting. And I didn't put my hands with Glee, but I was on the counter, which is wherever there's there's publicity, wherever there's there's negative comments, there's always the opportunity in disguise. And I think what I love about
this session so just thanking you now as well that rather than listen to the confident but incompetent of people down the pub you know you're talking to real people doing with real expertise on this so take the advantage guys and girls if you got a question that you've been thinking about asking ask it now because you know the best way to become wealthy in any areas to model people who are doing it
and Suzy and Kirstie are outstanding in their game. Hopefully you're seeing that and ask a question because if you ask a question, you'll have the chance to build a relationship with them. You'll have a chance to get access to their expertise, but take the opportunity to ask a question, you know, right here on the call. Is there any other, any comments you want to make at all, Kirstie about...
niches or something that you're going to be focusing on say as you look forward to 25.
Well, really what I'm going to be focusing on as I go forward is serving tenant demand. So linking with what we were just talking about in terms of, well, how do you ascertain that, which is explained. It's not impossible to ascertain demand. And actually, I'm going to be looking at watching closely for the next few months what the decisions that businesses make. And of course, I'm a business owner myself, so I've got decisions to make.
Christian Rodwell (01:07:43.98)
myself as well, I'm an investor, so I'm going to be talking to all my tenants, all my current tenants, talking to fellow surveyors, really getting under the skin of what the sentiment is with businesses, and then really looking at where the next wave of demand is coming from. And I'll get that from liaising closely with my commercial agents who are on the ground in all my investment locations. So it's really about, you know, who's looking for what space, who's growing.
Who's investing? Which tenant types are they? And then I'm going to buy property that serves their needs. So that's really, you know, my focus is I have my niches, industrial and high street, but whatever commercial property niche you're in, you can do the same thing and focus on where's the sustainable demand? Who is investing? Who is growing? Who is scaling back? And then plan your property strategy according to tenant demand, because that's where all your value is.
And Susie talked about walking your lane or sticking in your lane. Your lane is which area of town again or which area of the world? Yeah, so I live near Gloucester. So I invest in Worcestershire, Perifordshire, Gloucestershire mainly as my, yeah, most of my properties are around there. And just kind of adding to, so just an example of what Kirsty really said really well is, you know, if you've got a
got an office block. Who would you think would occupy an office block? Office tenants probably. Well, actually there's more and more office blocks, small office blocks, granted, that are being occupied by beauty therapists. Who knew? So basically, you know, all the people that inject Botox that haven't got any qualifications whatsoever are those people. and, and, know, some, some offices are absolutely, you know, that's all they've got. They've got like loads of beauty therapists in them.
Now, again, kind of looking at tenant demand, so that is like a niche that a lot of people don't realize. But then in next year, there's going to be some new regulation in that market, which means that not every Tom, Dick and Harry can inject Botox into your forehead, but you actually have to have a higher level of regulation. So what's the impact going to be on that sector? So that's kind of just a really tiny example of how you can
Christian Rodwell (01:10:12.652)
like be so specialist in a niche and you can really get under the skin about tenant demand and you can, know, and I've, I've got those kinds of tenants and I go and talk to them and say, right, what's the impacts it's going to be? Well, actually, you know, I can get the accreditation from here and you know, it's not going to be that hard to get. And then, you know, you're like, okay, fine. So that that's going to carry on. So just a tiny example of kind of how you can really like get under the skin of like these little sudden niches in property. were chatting to a guy on our
podcast, which we thank you for your participation on the podcast to each of you, who was talking about dentist practices and GP practices and the sort of increased demand for those sorts of things. Are you seeing anything like that on your patch, Kirsty? Yeah, so lots of, you know, the NHS has been being slowly privatized for decade or more, whether we realize it or not. And actually working at Boots,
great insight into that because within boot stores you now have phlebotomy and lots of other NHS services, which lots of people probably don't realise. So pharmacies and healthcare retailers are diversifying within themselves, which then makes them a really strong tenant because actually they're not paying all the rent. They've got lots of other income streams coming in.
And healthcare itself. So I've seen the NHS taking a lot of space on high streets over the last couple of years. So the NHS, there's a platelets, a specific centre for platelets opened up on New Street in Birmingham city centre. I was like, wow. And that's what we're talking about in terms of specialists. So in both healthcare, but also banking is another sector where everyone's going, all the banks are leaving.
Well, they are, but guess who's come rolling into town? The banking hub, which is another very strong covenant, which is the banks all sharing the space one day a week each in a collaboration with the post office. So there's also very smart things happening that are very niche, but if you follow them and find out what their requirements are, you could acquire assets, you know, almost kind of like source on behalf of tenants and serve them the space.
Christian Rodwell (01:12:31.79)
that they want. So there's lots going on in healthcare, there's things like the banking hub coming through. So yeah, there's lots of interesting, exciting developments happening. I had one of my SaaS clients, Kirsty, he decided he was buying a Domino's pizza outlet, or at least the commercial premises. And we were talking about the due diligence he was doing on the owner.
He says he's got another 10 of them and he's making millions a year. You know, it's like a, it's a good tenant and the yields 8%. I'll just take it. And it's well, yeah, fair enough. You know, you can see that there was some areas whether it's, so that I've heard some people talk about kind of trying to step into the demand to serve the needs of fast food retail. Is there any skills anywhere people can develop?
that skill or that knowledge, Susie, that you know of and I'll ask you the same question, Kirsty. What in fast food? Yeah, or just another niche. We just talked about medical. You know, we just talked about dentistry and so on. So I'm just talking about fast food because that's one of my clients has just done that. And I thought, that's an interesting area. Greg's as well, didn't you? Yeah, yeah. We love a Greg sausage roll. I mean,
Yeah, one of my clients or two of my clients, are, when we first started about niching in commercial property, they started looking at student towns and, know, and obviously students have a propensity for fast food and takeaways.
And they actually were looking at kind of did like a gap analysis, a gap analysis where you see who's missing on who's on similar high streets or in similar locations that they might, they might want to kind of go to, you know, who's missing. therefore which tenants could you bring in? And they did that in a, in a few university towns and came up with a really nice strategy of kind of basically looking who's missing, finding the suitable type of property and putting a, putting a fast food tenant in there. So you've kind of got this.
Christian Rodwell (01:14:45.088)
ready market of students that are ready to, know, want to invest. Obviously, you know, it's quite location specific, a list of fast food takeaways that actually want to be there because they're going to have some great, you know, some great customers. And so, yeah, I mean, there's potential for that. You don't have to be as niche as that. Obviously takeaways work wherever. The only thing you just need to be a little bit careful of is obviously
cooking in a property, so the extraction, the smells, the antisocial hours, the noise, especially if you've got residential above. Some banks don't like having takeaways below because they feel like it's antisocial and it's going to affect the house value above. But yeah, absolutely. And, you know, in COVID especially, but banks loved it in COVID because they were the only things that were open.
You know, but you've got to go with these ebbs and flows, you know, I think there's always ebbs and flows in commercial and that's one of the tricks of finding niches, you know, just keep reviewing, see where these socioeconomic trends are going to, you know, see what's happening in your particular investing locations and there's opportunities everywhere, you just need to get your eye into it.
And this is, you know, the part of the skill I mentioned earlier on of creativity, isn't it? that creativity starts with vision because everything's good in the world is created twice, first in the mind and then secondly on paper and in an action. you've got to see it first. And I think by surrounding yourself with great people, listening to what they're doing, having a look at what other people are doing and just applying maybe some of those lessons in your own area wouldn't be wouldn't be a bad thing.
Okay, well, I think we've covered quite a bit of ground there. Just in case people want to know a little bit more about what you do, Susie, in terms of who you serve and how you help people, do you mind just giving us a reminder of how you help people and if anyone is interested in what you do and then we'll give people an opportunity just to reach out if they want to do that.
Christian Rodwell (01:17:02.574)
Yeah, of course. So, yeah, I help investors or want to be investors, of commercial property. A lot of my clients are residential investors who want to move into commercial, but I also have a lot of business owners who I work with. I've got different things I can offer from kind of online course to one-to-one or in-person mentoring. And I also...
And I also offer kind of weekly mentoring for my clients as well. So a range of arranging offers and we do help people source properties if they want those as well. yeah, if you want to go into touch, yeah, please do. Yeah, and there's an opportunity just to let Susie know. There's a poll, we'll do the same with Kirsten in just a second. So if you'd like to hear a little bit more about what Susie does and how she does it, just click yes.
in the poll that's on the screen. And if it's not for you, then you can click no, it's absolutely fine. And then we can close that poll in just a few seconds. But Kirsty, do you just want to do likewise? So who do you help? Where do you help them? Who are they now? What are they planning to be by the time they get your expertise in hand? Yeah, so I help experienced residential investors and SAS pension trustees invest
to either replace their income or free their time by investing in commercial property. And a lot like Susie, we do some similar things. I do it in the Midlands, I'm based in Birmingham. I have an online masterclass all the way up to a full 18 month mentoring programme where I work with you one-to-one, but also within a group because relationships are key in commercial.
And we also have a full sourcing service run by actually my team of surveyors rather than myself. These days I just dip in and out. So those are all the different things that we do. I guess periodically as well, one thing to mention is I think about six times a year now we host a half-day workshop at one of my own commercial property investments, which can be a good way to just find out a bit more about commercial and decide if it's for you or not.
Christian Rodwell (01:19:24.558)
And that's a great thing because I remember we had some people come to one of your sites and Kirsty, do you do any site visits or suggest people go to site visits? Yeah, absolutely. I mean, that is effectively what our half days are. It's a site visit to one of our own investments or one of our clients investments where we will walk the patch as well. So you get it in context. We'll do a case study of the property and there's nothing beats, I'm sure, Susie will.
agree, nothing beats being on the ground, boots on the ground, know, scoping locations, being in a location, meeting agents, talking to tenants. You have to do that in commercial to be successful. And do do side business as well Susie or no? Actually, I do for my existing clients, but I don't do for new clients and like
But yes, I do lots of webinars and give lots of case studies and lots of examples of what myself and my client are doing. But my existing clients, we go on site visits and we visit my properties and theirs and look at some of the trends in the area. So very similar to what Kirsty's doing. Yeah, OK. And is there anything else coming up? Have you got any?
conferences or big events, anything that you might signpost for us? So, yeah, I've got an online conference that's in January. And if I was better prepared, I could actually give you the date. But yeah, there's an online conference that we're doing, which has got not just me, but also some guest experts that will be coming along. So people to talk about.
capital allowances, Kevin you're coming along to talk about SaaS, we're talking about kind of how to convert commercial properties and various other things so and that's free of charge so if anybody's interested in coming along to that then do get in touch and that's a whole day online so you don't need to get in the car for that one. Okey dokey and anything from your side Kirsten? We're just trying to make ourselves more accessible to be honest so
Christian Rodwell (01:21:40.012)
We have something coming up in November and December that we've never offered at such a reasonable investment, shall I say. watch the space. Even if you just want to be part of our weekly emails, if you want to be part of the database, we do send out weekly emails as well, which get ever more interesting. I don't write them all anymore, so we have lots of guest experts writing content.
as well. So that's just a way to start to learn a bit more about commercial property. Well, that sort of reflects a little bit, Kirsty, on the point you made right at the top, which, you know, I have to acknowledge too, which is doing this work, building your wealth, however you build it, wherever you choose your niche, whether it's in commercial property, residential property, in SaaS, in business, in any of the ways you can build wealth, then it's just great to know why you're doing that.
and you made it very clear that time freedom is the most precious commodity for you. And I noticed how many holidays you have, so that's great. That's all good fun. And I think it's great that you've shared your time today. Suzie, Kirstie, thank you so much for doing that. We have had somebody in the chat box say, just buying a property with Gregg's as the tenant, long live the sausage roll.
Any final and parting words just on how people should think, get their mindset and are ready to start planning the next, not just a reaction to the budget, because as you said, it's just an interruption, just something to talk about because we need to react, but just in terms of building wealth. So Kirsty, anything that you want to say about that, getting your mindset right, getting your focus right?
not being too destructive, anything that you feel is valuable that anyone would want to have a little think about? Yeah, I feel that the most valuable thing we can all do is have a very clear vision and a very clear end goal and work backwards from there and then say no to everything that doesn't take us towards that goal. Because I can't tell you how many people come to me who have invested and created a life that they didn't want.
Christian Rodwell (01:24:03.562)
And for me, investing is about enhancing your life and your family's life and, you know, moving towards the life that you want, not away from it. And a lot of people seem to have fallen into niches or doing things because lots of other people are doing them rather than because it's the right thing for them and their goals. So the most common question I'm asked is, what should I invest in in a commercial property?
I have no idea until I've found out more about you, more about your investing goals, your current situation and where you're trying to get to. So I think in terms of mindset, my plea really to everyone is to just review where you're at and what you're doing and how close is it actually to what you want. Nicely said. Suzie, do you want to add anything to add to that?
Yeah, I think just to add to that, I think the other question to ask is why, because I have very similar questions that Kirsty gets. I think it's very common. And obviously, I'm really delighted when I work one-to-one with clients to solve that with them. But why? And I think when I go a few layers under, I want to get 10,000 pounds a month cash flow,
which seems to be like the figure that everybody wants to get to, which is fine. Then, you know, the why isn't, the why isn't I want loads of money. The why isn't I want 10,000 pounds a month. The why is I want to spend more time with my family. I want to spend more of my time giving back to society or whatever else it might be. So, and obviously if you're managing a very busy portfolio,
then you might have 10,000 pounds a month, but you might not actually have the time to enjoy it. So yeah, I totally agree with that. think, you know, definitely start with the end in mind, be highly strategic in what you're doing and what you're looking at. Be highly strategic in how you source property, be highly strategic in terms of, you know, how you finance property and, you know, the results will speak for themselves. Okay, well, nice you said both and I think they echo.
Christian Rodwell (01:26:24.056)
the wealth builder's view, which is always begin with the end in mind and starting with the reason why and most people will know my reason why and it's good for you to share your own with your partner and so on. Well, listen, thank you so much. It's been a very interesting time has flown by to get your insights, not just on the budget, but wider issue of commercial property. think we've done our best to answer as many questions, but remember this is just the beginning.
of a relationship with either wealth builders or with Suzy or Kirsty, you'll always get your questions answered. All you've got to do is raise your hand and ask them. So whether it's in the chat box, whether it's on email to us or to the others here, just make sure you get your questions answered and don't listen to Joe down the pub. Hear it from the masters of what they do. And until next time, ladies and gentlemen, we'll see you. Bye bye.