When Darryl Cullerton was younger, he realised that the richest people he knew were those who owned property.
As such, it was “only natural” for him to start thinking of buying property once he got older, he said.
Hailing from Durham, Mr Cullerton didn’t go to university as he “didn’t apply” himself at school. “I always had my wits about me, and knew what I wanted to and what my passions were. I knew if something was going to make money or not.”
He first decided to invest in property when he was just 18, and bought his first buy-to-let home in the North East using a £15,000 loan from Marks & Spencer.
Now 37-years-old, he said: “In 2008, before the big financial downfall, I managed to get a 100 per cent mortgage for a property with Mortgage Works, and I just went for it. I always wanted to invest in property, but knew that if I wanted to take it to the next level, I had to move back in with my family and get a loan.”
His Marks & Spencer’s loan had a monthly repayment of £300. With his mortgage on interest-only at the time, it only cost £150 a month. He calculated that by renting out the house for £600, he could pay off the debt and keep a small profit for himself at the same time.
“I paid £60,000 for my first buy-to-let property, and planned to re-finance the property in two years time and move on. I lived in it for a month, and then applied for a right-to-rent from my bank,” he said.
“I moved back in with my family, and it was a cycle of satisfying loans and buying properties.”
Despite making money from the venture, he said that after every property purchase, he became skint and went into overdrafts as every single penny that came out of a property was re-invested.
“I was making around £300 a property but it would go towards maintaining the buy-to-lets and other costs too.”
His turning point came when he noticed a local shop was up for sale.
He told i: “Everyday, I would go down to my local news-agents during lunch time. One day I saw it was up for sale. I bought the shop plus two flats upstairs for £55,000 – and renovated it for £25,000. Later, it was valued at £175,000 which was a real boost to my portfolio.”
Mr Cullerton was getting rent from two flats and a shop, which “changed his path” in being a landlord. “I was getting three returns while in the past, I would get one return on one purchase in the local area. From then, I sort of went on a tangent – and bought ten shops that were pretty identical to each other and kept just repeating the process. It worked,” he said.
As a buy-to-let landlord, Mr Cullerton now has around 80 investment units – both property and commercial – all over Sunderland. He aims to buy one property a month, and pays around £50,000 per investment.
“I bought some houses for £45,000 and some for £25,000. It’s all down to what you’re looking for. I predominantly buy in the North East [of England] and never spend more than £75,000 for a residential property,” he said.
It comes as tenants have seen rent increases across the board with estate agency firm, Savills, reporting that rent now takes up 42.5 per cent of people’s income. This is up 26 per cent since March 2020.
Mr Cullerton said he typically charges tenants between £500 to £600 per month which reflects average rates for the area.
“I did up my rates by 18 per cent but staged it over a three-year term giving my tenants time – so a 6 per cent a year increase rather than the full 18 per cent straight away.”
Mr Cullerton also developed a student accommodation that he still owns in Sunderland city centre which won The North East Student Housing Award in 2017.
Currently, his portfolio is valued at £6m in total, and he operates two property management companies. Separately, he employs 60 people for his mechanical electrical company which started in his grandad’s back garden.
Despite a turbulent few months for the property market, which left 46 per cent of buy-to-let landlords planning to de-risk and shrink their portfolio this year, according to mortgage provider, Together, Mr Cullerton is “really positive about property”.
“Everyone talks about the doom and gloom of the property market but for me, it is all about planning. Before I buy a property, I work out what the mortgage will cost, how much rent I will charge and what it will cost me in total. I have everything on a spreadsheet,” he told i.
“My advice is to pick a number of how much you want to pay for a property and work around that – calculate how much rent will cost, what insurance will amount to, and put around 10 per cent aside for repairs.”
