Seasons in Life and Property Investing

The recent snowfall we’ve had in the last few days has made me reflect that the seasons we experience in our weather are much like seasons in a property business. Throughout the year we expect to experience different seasons. As the year progresses it would be very strange not to feel the changes in sunlight, temperature and climate. Indeed, other countries across the world have very different seasons to our own. They still have seasons and recognise the need for the rainy season and the hot sunny seasons and the dry season. Yet too often we have expectations that our journey in property can always be in summer mode – sunny, bright and positive! But that’s not reality.

Seasons create the right environment for growth. Without seasons, we wouldn’t get the fruit, vegetables and produce that we rely on to live. Yet in winter it can be hard to enjoy life in the same way we do in summer.

In a property business there are varying seasons – and you might feel right now that it’s like winter. You can’t find the deals, you can’t find the investors, you’re doing lots of viewings and maybe you feel like nothing’s happening and you’re getting nowhere. There’s no shoots, there’s no blossom, there’s no greenery, it feels cold, hard, and icy. At a time like this you need to concentrate on creating YOUR ideal environment for growth. A bit like a compost heap needs time to develop and mature, we also need the right environment to mature into successful property entrepreneurs.

What kind of people do you surround yourself with? Are you in the right group of investors? Are you focusing on expansion or contraction? Are you learning the secrets of successful entrepreneurs while you can, or are you retreating – hibernating, cos it all seems just too hard and impossible for you to achieve?

I’ve worked with many, many people who felt that they were skating on ice. They didn’t have experience, they didn’t have time. And they didn’t have the right knowledge.

Take Keith for example. He was the epitome of a successful businessman, but felt completely stuck in his well-paid job. He wanted to create a reliable extra income stream for himself and his fiancee. He heard about the exceptional returns that HMOs could bring, but had no idea how to do it. He came on my 2-day Multilet Income Multiplier event and learnt exactly how to make his time and money work efficiently by implementing my simple five-step system. In just a few months he had created 3 HMOs and done this with other people’s money! He realised that he was stuck in the winter cycle because he hadn’t taken action towards his goals. When he learnt exactly HOW to create passive income and do it with other people’s money he felt like spring had sprung!

The good news for you is that spring is around the corner. If you take action and do what’s needed you can adjust and change your results.

If you’re interested in learning more, and would like to get started but have no idea how to start, scale and systemise your HMO portfolio, then I’d like to invite you to my next two day event on March 2nd and 3rd. The usual price is £1497 but I am running a unique charity weekend to raise money for the YMCA – a charity that supports young and vulnerable people who are homeless. The special weekend price is just £400! Yes that’s right a discount of over £1000! All money raised will go to the YMCA.

You’ll learn the very same 5 step system that Keith learned and implemented, and is now making him thousands of pounds income per month. You’ll also learn how to sow the right seeds at the right time and in the right way, to get the best deals and to grow your portfolio fast. If you know that this year you really must start to learn how to make this a reality in your life, and make winter turn into summer – then I would urge you to book your place now. At this price, I know the seats will fill up fast, and I wouldn’t want you to miss out.

Click Here to Book up NOW

Just like in the natural world that we see around us it won’t be long before you’ll start to see those green shoots that are evidence of your activity paying dividends. You’ll start to see the trees budding, and blossom appearing.

Perhaps right now vendors aren’t willing to negotiate with you. Maybe estate agents haven’t got the stock on their books. There’s lots of other economic factors at work that are making it feel like winter, but it will change. If you are in it, if you know what you’re doing, if you know what you’re looking for, if you’re practicing, then when spring comes, you’ll be ready.

And then up ahead is summer! Just think about the summer you’re going to have – the kind of rewards you’re going to have and the amount you’re going to be able to reap because you have sown seeds at the right time in the right season. That’s why I’m a big believer in educating yourself about property – how to spot when a deal is a deal, and how to see the conditions for an effective transaction.

When autumn comes, that’s the time for looking at your portfolio assessing how well it’s working and whether you’re getting the returns you expected. Perhaps you need to prune it a little bit. Perhaps you need to cut back a bit here, or you need to push forward a bit there, or you need to focus a bit more in another area. Then, of course, there’ll be time for winter again. You’ll be better prepared next time because you’ve gone through it once already and will know exactly how to approach it and how to behave.

Seasons are natural and rhythmic but I believe that if we act despite what the weather and our feelings tell us, then we can still make the most of our situation to produce great fruit when the time comes!

So don’t let this winter dictate your activity – plan for a fantastic spring and summer, and plant the right seeds in your life now –

Click here to find out more!

To your growth

Wendy

Top 20 Questions for your Potential HMO Agent

If you’re considering HMO’s as your next property investment, have you thought about how you will ongoingly manage them?

If you intend to use an agent, how do you know how to benchmark them against each other?

Top 20 Questions to ask your potential HMO agent…

1. What experience do you have in renting out properties like this HMO?
2. What is the type of HMO you specialise in?
3. What is the average room rent you achieve?
4. What is your average void period?
5. What is your average type of tenant?
6. How do you advertise the properties?
7. On average how long does it take you to rent a room?
8. What percentage of rent advertised do you achieve?
9. Do you rent any licensed HMOs?
10. Are you the manager of any licensed HMOs?
11. What does your service actually include?
12. How do you deal with maintenance and repair jobs?
13. How do tenants contact you for emergencies?
14. How do tenants report issues or general queries?
15. How often do you/your team visit the property?
16. How do you deal with rent arrears/missed rent payments?
17. How do you ensure the cleaner is managed well?
18. Which KPIs do you gather and supply to your clients each month?
19. What is your inventory process?
20. What advice would you give to an HMO landlord?

Get Organised with Viewings

If you know that the returns in your area are not what you’re looking for, choose another area. Don’t stress too much about finding your goldmine area just yet. One will appear.

However, you need to trust and follow the process first. Learn HOW to follow a process for sourcing and viewings so that when your ideal area becomes obvious, you are ready to pounce! Creating a system so that you regularly contact agents and vendors, organise viewings and follow-up is key to your actions if you’re going to find deals.

Diarise Property Viewings

If you’re planning on growing your property portfolio this year, the one action you will have to diarise is regular viewings.

Creating a system so that you regularly contact agents and vendors, organise viewings and follow-up is key to your actions if you’re going to find deals.

Create a spreadsheet with three tabs at the bottom – one for each area that you’re analysing. Better to analyse a postcode area than just a general town/ city wide area.

Within the spreadsheet create 9 rows…

  1. Average price of property sold in the last 12 months
  2. Population size & growth
  3. Large employers in area
  4. Growth plans and development
  5. Transport links
  6. Spare room average rental income
  7. Number of tenants looking for rooms
  8. Number of rooms available
  9. Views from local lettings and estate agents about HMO demand

Stay Ahead of the Winter Weather for Property Success

A survey from online letting agent upad.co.uk, which surveyed 4,000 landlords, showed that nearly half of landlords fail to carry out routine maintenance checks before Winter sets in. The impact of failing to prepare for the bad weather can be huge, especially if your property is an HMO. Frozen pipes resulting in no heating and water, and then water leaks and further problems lead to unhappy tenants who may choose to move elsewhere.
Our maintenance team carry out monthly checks on all our properties, but every quarter they run a more detailed assessment to identify and prevent longer term problems. Here are my suggestions for areas that you need to include in a routine check (or make sure your managing agent does)!

1. Gutters, drains and roofs
Leaves and debris can quickly cause water damage if they’re not cleared regularly. I would recommend that every 6 months someone needs to go up on a tall ladder and check the state of your gutters and downpipes, clear the debris and run a hose of water through them. Make a similar regular date with your roof. Loose or missing shingles may lead to leakages with rain or melting snow, and flat roofs may be prone to leaks after heavy rain.

2. Trees and external objects
If you’ve got a tall tree or foliage that overhangs the property, check whether this needs to be cut back or pruned so that in high winds there’s no risk of damage to the house. Having deciduous trees near to the property can cause other problems such as root growth damage and leaf pile up, so it might be a good idea to assess whether this is the right time to remove a tree altogether.
The television aerial can also get dislodged in high winds, so it’s worth having a look to see whether it is securely lashed to the chimney stack and can withstand some force from the wind.

3. Heating and lighting
Boiler failure is one of the most irritating and costly issues to deal with and can cause real upset with tenants – understandably. Have your boiler serviced at the end of October to flag issues early and consider whether you could add boiler insurance to your policy for extra cover.  You may choose to use a service plan to ensure you have back-up should the boiler fail. Alternatively find a reliable local plumber who is happy to do emergency calls at an agreed price. Furnish your agent with full boiler instructions and a detailed guide as to how to re-set it or top up the water levels as this can sometimes be the issue. Also make sure your tenants know who to call if anything goes wrong.
Heating woes are not all about the boiler, however. While three-quarters of landlords who carry out winter maintenance check the boiler, only half remember to do a health check on the pipes and radiators too, according to the upad.co.uk survey. Bleeding the radiators and checking for leaks across the property ensures the whole system will work more efficiently.
Using a remote thermostat like Hive from British Gas or Inspire will allow you to control the heating remotely. This means that you can set the property’s heating to come on regularly each day. Ensure your tenants understand the thermostat set levels and what to do if they want to change the heating settings.

4. Condensation and mould
Condensation can be a major problem in the winter months and regular room checks will allow you to see whether this is occuring. Air flow through the property is key to reducing humidity as is the use of extractor fans. Check that all extractor fans are in use and working properly, and remind tenants of the importance of good ventilation.

5. Alarms and security
Every habitable floor of a rental property must have a working smoke alarm – and any room with a solid fuel appliance (eg, a working fireplace) should be equipped with a carbon monoxide alarm. While testing your alarms, check the burglar alarm is working for added tenant reassurance on dark nights. If you have an outside light or PIR, make sure it stays on long enough and the range is wide enough to be of use. If your tenants have to pull bins out onto the street, or don’t have enough light to see where to put their key in the front door, their annoyance will only be exacerbated by having to wave at the external light that fails to stay on long enough to be helpful.

6. Insurance
Ensure your current home insurance is up to date and check your policy gives adequate protection for any winter-related damages. And if your property has a flat roof, it’s worth checking your insurer covers flat roof damage – most insurers do not cover flat roofs, and structures of this kind can be prone to collecting water as it can’t drain off.

Having a regular approach to maintenance is both proactive and reactive and will help you ensure that your HMO works well today and for the future.

For more tips, advice and information on running a successful and cash-flowing HMO portfolio please join my Facebook group ‘The Ultimate HMO Success System. Or alternatively you can find out more about my mentoring services at www.wendywl.uk/mentor.html

Image Credit: Getty

From stay-at-home dad to millionaire!

Mick Regan was a stay-at-home dad with a busy schedule when I first met him. He had been made redundant from a well-paid job, and was now able to to spend more time at home with his children, which was great. However, he realised that unless he did something soon, his redundancy money would soon be spent!

While it feels nice to buy all those things you’ve always wanted, Mick knew that he needed to replace his income FAST. His redundancy pot was not massive, and he knew that he could fritter it away if he didn’t have an investment plan.

He didn’t know much about HMOs except that they could make him much more money faster than a single buy to let property. So he joined me on my HMO Magical Mentoring Programme and started to look for his first property. Using the knowledge, information and systems from the programme he found an amazing deal almost straight away.

It was a three storey house that had been neglected, and included the bonus of a basement flat conversion. By this time his confidence had grown enough to put in a cheeky offer, and it was accepted. Here are the figures from this, his very first deal:

£178k purchase price

£82k refurb costs

£300k re-valuation

£35k left in the deal

£2500pcm (5 units @ £500pcm)

£600pcm (basement flat)

£3100pcm Gross income (£37200 pa)

The amazing thing that happened to Mick was that after this experience he just got bolder and bolder. He continued to raise money and do deals and he now has a portfolio worth over £1m.

Here’s what he said about working with me’

I started out knowing nothing about HMOs. Wendy taught me how to find the right ones in the right area, and rinse and repeat it. My first HMO makes me £1600 profit per month (fully managed in Stockport) and I now have a pipeline of deals worth over £600k”

It all started with a small investment pot and a desire to create income with what he had.

Could you do that too? Yes you could…

Contact me NOW if you want to find out how you can achieve the same things that Mick did.  I offer a FREE 30 minute consultation call to explore your options and see if mentoring is right for you.

Here’s the link to book your call: https://fwfozt-free.10to8.com/

Books for Christmas!

What’s on your gift list?

Do you have a book you’re hoping someone will buy you?

These are the books on my list (hint hint) … anyone??!!

The 80/20 Principle: The Secret of Achieving More with Less by Richard Koch

ReWork: Change the Way You Work Forever by Jason Fried (Author), David Heinemeier Hansson (Author)

Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist Kindle Edition by Kate Raworth (Author)

What’s on your book list?

Education: A Dirty Word?

I hated school. I really did. Ask my parents, and they’ll tell you how much I resisted getting up in the morning, I resisted getting dressed. I resisted homework. In fact I was pretty good at finding a number of reasons why I should not have to go to school. I didn’t think that school was important, or that I was learning anything useful and I believed that the subjects were completely irrelevant to my life.

And the end result: I failed miserably at my ‘A’ Levels. A year later, with some theatrical experience under my belt, I scraped into a college of Higher Education to do a Drama degree.

What astonished me immediately, was how much I enjoyed it. I bounced out of bed in the morning. I rushed to my lectures to be there on time (gasp!). I spent time in the library, reading and applying myself. Even when I was struggling, I somehow found the focus to keep going. I ended up getting a BA (Hons) 2:1 in Creative Arts. When I phoned my parents to tell them, I think my mum nearly fainted with amazement.

What I realised was this: to learn at your best and your highest level you need to find out what intrinsically motivates you and then spend time learning this on your own terms. I chose the college I attended, I chose the course, and I chose the time commitment. Somehow these three factors had a massive impact on me, to the extent that on the day of graduation, I said “I could do that degree all over again. I LOVED it”.

Fast forward many years later and I felt as equally trapped as I had done at school. Only ironically I was now the teacher, and had a teaching role in Higher Education! In truth, I loved teaching and sparking the process of an amazing lightbulb moment where a student grasped a new concept or understood a theory for the first time. Working directly with students was what I loved best. There were much wider political and structural forces at work, though,  that meant I was often drawn into debates and challenges that had really nothing to do with teaching. I began to feel that there were no other options but to pursue this career to the exclusion of all else. Forever, until I retired. And that I resented.

Now, at the age of nearly forty, I could feel that same resistance I felt when I was a teenager. “I don’t want to get up. I don’t want to get dressed and go to work. I want a hot dinner not a packed lunch”!

I took a long hard look at my life and realised that I had stopped learning. I had cornered myself into a small place and it was time to expand my mind and my reality. As a side-line and a future legacy for my children, I had been developing another small income stream from a few single buy-to-let properties. But I had ignored it, and become rather blase about this small portfolio. This moment of emptiness with my job made me realise that the time to make a change was now. If I didn’t take the leap now (even with a job and four children to manage) I would never do it.

So I started to educate myself. I attended loads of webinars and networking meetings. I read books and subscribed to relevant magazines. I asked lots of questions and attended courses. And more courses!

And I started to buy bigger houses to convert into Houses of Multiple Occupation.

I began to apply what I was learning, and this made me hungry for more. My resistance lowered. I WANTED to learn, I wanted to read and know and I wanted to be AN EXPERT at what I did. I recognised that I was intrinsically motivated to learn how to create HMOs, how to create passive income and how to become financially free…

It’s true that for me, traditional education felt like a waste of time. Only learning what I was self-motivated to learn has ever inspired me enough to maintain my interest. Staying the course depends on you having the interest and aspiration that you feel for the subject matter.

Since that time, I recognise that I love entrepreneurship, business, communications, and people. These are the areas of life that I could study all day long.

It makes it even more fun when I apply it too.

You have to take risks when you are learning something you’re motivated to learn that’s not a school subject. People will think you’re a bit crazy, stupid or mad. No worries. Let ‘em think it.

  • Stay centred on your passion.
  • Make time for learning – theory and practice
  • Keep applying what you’ve learned to make it fresh and real (practice)
  • Take a break when you need some space to cogitate
  • Invest wisely – books, courses, materials.

And above all, find something you are intrinsically motivated to learn. Whether it’s crochet, cookery or computing. Patchwork, pottery or property. As Ray Croc, the McDonald’s owner once said ‘When you’re green you’re growing, when you’re ripe you rot’!

Saturation, Supply and Shifting Sands

If anyone tells you that the laws of supply and demand don’t apply to property, be very careful to analyse their motivation! Whilst property prices are much more linked to the supply of mortgage lending rather than the supply of properties, when it comes to rental availability there is a clear correlation between supply and demand.  In any market place, where there is an over-supply of product there will be an impact on the strategies used to sell that product. This might result in lowered prices, or better deals, or an improvement in quality. HMO rooms are no exception to this rule. If you are investing in HMOs you might have seen some changes to local supply. The fact is that in some areas of the UK there are more rooms than demand at present, and landlords are struggling to fill their HMOs. Why is this?

  1. The first reason is that investors have realised that the only way to maximise their portfolio income has been to invest in HMOs a) to counteract the pernicious new tax laws that are being introduced b) to benefit from higher monthly cashflow c) to leverage commercial finance and d) to protect against potential voids. With access to better information, training and support, more and more investors are recognising the power of HMOs for long term wealth and immediate profits.
  2. Secondly, the introduction of stamp duty on second properties over the price of £40,000 has meant that smaller, single buy to let properties are proportionately more expensive to buy. Coupled with the minimum mortgage or purchase price requirement from lenders where investors are investing via a limited company has lessened the appetite for cheaper properties, and increased the need for a higher return linked to a higher purchase price. HMOs make the perfect foil to these prerequisites.
  3. Brexit and immigration. Certain parts of the UK have already felt the negative effects of Brexit, with many Eastern Europeans migrating back to their home countries. According to Migration Watch UK ‘Although we have seen a fall in net migration of EU8 citizens there have been continued increases in immigration from Romania and Bulgaria, so it is too early to say what effect the referendum result has had on long-term international migration’. In other parts of the UK there is a growing immigrant population. Predictions are that immigration will stay steady in terms of net figures, but that certain immigrant communities may change substantially in terms of culture and mix.
  4. Student housing impacts. In many traditional University towns, an enterprising landlord could make a good living from students renting rooms in the locality. Recently there has been an explosion of high quality, contemporary purpose-built student accommodation wiping out the demand for individual HMO housing, necessitating a shift in market offering from landlords still wanting a profitable return. In many instances, they have adapted and upgraded their HMOs to attract the professional market, and this has in turn impacted the current professional HMO stock.  

These factors have created excess provision in some areas especially where investors have failed to understand the forces at work in the local economy and the necessity to adapt and change to the marketplace. So what can an investor do who is facing competition and wants to resist the lure of price reductions just to fill rooms?

  1. Ensure that you are creating a product that not only offers great value but also has a niche offering. Whether you offer personal service with a smile, have wonderfully designed interiors, or make HMOs great communities, you need to identify what it is you are good at and tell your market place about it. In this day and age, unique and niche brands get people talking and sharing, and your HMO business is no exception.
  2. Tell everyone what you do. Use social media like Instagram, Facebook and Pinterest to share your message and learn how to create advertising copy that sells your rooms (linked to the ideas above).
  3. Work with local businesses and estate agents to create win-win referral deals that benefit them too. Incentivise your tenants to give you referrals and ensure you get plenty of feedback that you either act upon or share!
  4. Respond fast and flexibly. If you cannot respond to a viewing or request quickly, in a competitive market place you will probably wait much longer to fill your rooms.
  5. If you are unsure about consistent supply of tenants, always have a plan B. What else might you do with an HMO that you just can’t fill? Might this present another opportunity that you have missed?

The ebb and flow of supply and demand in HMO rooms is constantly shifting. As investors we not only have to adapt to survive but also to thrive. In this changing landscape of rooms and provision, the creative, savvy and determined investor has the edge. Make sure you’re one of them!

 

How to Future-Proof your HMO

Future-Proofing your HMO is all about systems and processes that allow you to maximise your profits and minimize your costs while still providing excellent service and value to your customers – your tenants.

There are the three main parts of this process which are:

  • Maintaining Customers
  • Management of the HMO
  • Maintenance of the HMO

Maintaining Customers

Communicate with tenants regularly.  Simple steps like a monthly group email (try mailchimp.com) lets your tenants know that you care about the quality of their experience in the property. It’s a great, easy-to-use automatic email system that allows you to schedule emails in advance. You can gently cover topics that might become issues or risks to the overall smooth-running of the house by introducing the topic and then saying something about it in the main body of the email. We have found this reduces rather than raises queries, as tenants then understand procedures and policies more clearly and also what kind of behaviour is expected of them!

Using a telephone answering service is invaluable as it allows all calls to be answered and dealt with professionally while freeing up your time to attend to other aspects of the business. I have found that tenants like having ONE number to call and don’t cope well if you give them a variety of different numbers to call depending on the severity of the issue.

Management of the HMO

Keys can become a major headache for a landlord (or agent) if you don’t have a clear system for managing and tracking them. If you don’t want to go to the expense of installing a masterkey system (although I would heartily recommend it particularly if you wish to scale up your business), you need to develop a system using a spreadsheet and large cabinet! Code each keyring so that you  know which door the key opens in each property, always have at least one copy made and track them as they leave and enter your office!

Compile a list of tradesmen and maintenance people who you can work with to undertake the routine and emergency work that will no doubt be required from time to time, no matter how well you have Finished It! Always have a preferred supplier and a back-up for the times when your original tradesperson isn’t available. You may wish to set up a retainer or a regular payment to maintain the flow of availability. There are companies that offer landlord emergency cover for a small monthly charge and ensure an immediate emergency response to any problems in the property.

Maximising your profits

Ensure you are collecting rents on time and regularly checking them. Even a few days of late payments per month will make all the difference to your cash flow.

Keep a sharp eye on your outgoings – and take time to identify how you can reduce your bills on a regular basis. Reducing bills, even by 5-10% per annum will compound your cash flow and profits. If bills are rising fast you need to investigate and identify why. Keep an eye on new technological developments in the HMO industry. Whether it is a new piece of software that can help notify you of late rent payments, or an app that can control your heating remotely –  use technology to systemise your business, thus saving you time and money.

And finally, enjoy your investment! You have worked seriously hard to create a property that will serve you now and for years to come, so look after it and it will look after you!