Your Landlord Lives With Their Parents: How These Gen Z Investors Are Making Their Way in Property

In recent years, property ownership has become a more treacherous landscape for younger generations, particularly for Gen Z. With sky-high prices and a rental market that seems increasingly out of reach, the notion of owning property is daunting. However, a surprising number of young investors are stepping into the shoes traditionally occupied by older generations, thereby reshaping the property market from the ground up. According to UHY Hacker Young, around 64,000 landlords in the UK are under the age of 31, with 3,000 not even reaching the age of 21 yet. Meet three Gen Z investors who are making remarkable strides in a world where their age group is mostly on the sidelines.

Live-at-Home Landlords

Dylan Renshaw, 26, from Derbyshire exemplifies how living at home can be an inadvertent launchpad for property investment. At 20, Renshaw made his first foray into real estate by purchasing a two-bedroom property in Nottinghamshire with a deposit of £27,500. Interestingly, he managed to save this amount while paying just £250 monthly to his parents for rent—a fraction of what many his age spend on private housing.

Dylan’s upbringing in a family of landlords gave him a unique perspective on real estate. He began saving money at 16 through premium bonds and a Help-to-Buy ISA, a government initiative that encourages first-time buyers, although the bonus isn’t applicable for buy-to-let mortgages. However, Renshaw cleverly navigated this by changing his circumstances, renting out the residential property he purchased after changing jobs six months after buying it.

Today, his property empire spans multiple homes, with a combined mortgage payment of £950 per month against a rental income of £1,590. “It’s daunting, but I plan for contingencies,” he reflects, acknowledging the financial responsibility that comes with being a landlord. For Renshaw, it’s all about mindset and prioritizing his goals.

Too Much Red Tape?

Liam West, 26, from Evesham, had a different start to his property journey. At the tender age of 20, he took the plunge into property management by renting out a one-bedroom flat valued at £130,000. The property was passed down from his great aunt, who left it to him and his mother half-and-half after her passing. When it came time to buy out his mother’s stake in the property, he secured an £80,000 buy-to-let mortgage, navigating a complicated process filled with red tape that often leads to headaches for young investors.

His own experiences with the mortgage process were filled with challenges. “Because I’m young, it felt like we had to jump through many more hoops,” he recalls, noting that his mother acted as a guarantor during the first two years of the mortgage. With rising interest rates affecting mortgage payments, West is currently left with only a modest monthly profit of about £50, all earmarked for emergencies.

He advises caution to his peers: “Don’t treat it like free money; you’ll need it for unexpected expenses.” Despite the odds stacked against him, West finds pride in his journey. “Not many people my age have this kind of experience, which I value,” he shares, eyeing potential expansion into a larger portfolio that leverages his skills as a joiner.

A ‘Horrendous’ Experience

In stark contrast, Morgan Dagnall, 26, from Northwich, describes a nightmare scenario that highlights the pitfalls of property ownership. After investing in a three-bedroom rental property, he found himself grappling with problematic tenants and a skyrocketing mortgage payment, which surged from £821 to £1,375, severely impacting his finances.

The journey to property ownership wasn’t easy for Dagnall and his fiancé; they saved tirelessly while living with their parents, accumulating a deposit of £23,000 through a combination of wages and Help-to-Buy ISAs. The couple initially moved into the property but had to rent it out later due to job relocations. However, the experience soured quickly, marred by complaints from neighbors about tenant behavior and rising property management stress.

Dagnall describes feeling overwhelmed, noting that their tenants have been uncommunicative and potentially problematic. “The emotional toll has been horrendous, especially on my fiancé’s mental health,” he states plainly. The struggle has made them reconsider their plans for expanding their property portfolio, leading them to consider selling their investment. They now find themselves in the unfortunate position of being stuck in an unfavorable mortgage situation, unable to shift back to a more stable rate due to their current rental arrangements.

Perspectives on Risk and Reward

The journeys of these three Gen Z investors illustrate the complex web of challenges and opportunities in the property market today. While Renshaw and West harness the advantages of their familial circumstances and youthful vitality to carve out their pathways, Dagnall’s experiences serve as a cautionary tale.

By understanding individual circumstances, defining clear financial goals, and acknowledging the risks involved, young investors can tread carefully in the tumultuous waters of property investment. In this evolving landscape, each decision could either build futures or become formidable obstacles, demonstrating that, often, navigating property as a young investor requires not just financial savvy, but emotional resilience as well.