The Property Voice Podcast - Bonus Episode: Diary of a Property Investor
In between series seems like a fitting point to pause to share some of what I have been up to. It’s not only about deals, there is a lot going on in the world of this property investor, so have a listen and find out. From HMOs in Birmingham, to absconding Cornish tenants and finally international investors from at least 4 different continents…not bad for a couple of months in the world of a property investor is it?
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Resources mentioned
- NLA Accreditation Verification – check to see if your landlord is accredited by the NLA here: NLA Landlord Accreditation Verification
Today’s must do’s
- Consider landlord accreditation, mentoring, new projects & joint ventures...maybe giving taking tenants to court a wide berth!
- Subscribe to & review the show in iTunes…and while you are at it please help us to spread the word by telling all your friends too!
- Send in your property stories, questions or moans to podcast@thepropertyvoice.net and we will try and feature YOU on the show too!
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- Join in the discussion, either here in the comments section below, or anywhere else on the Blog
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Transcription of the show
Hello and welcome to another edition of The Property Voice Podcast, my name is Richard Brown and as always it is a pleasure to have you join us again today. In between series we get to experiment a little and so I am looking forward to sharing a little from the ‘diary of a property investor’ as I like to call it.
No Casa this week, just me and a brief run through some of what I have been up to in the world of property recently
Property Chatter
OK, so as we are in-between series, this allows me to do something a little bit different to the usual in this Property Chatter section. In fact, the idea for today’s show actually comes from a listener, called Sanjay. Now, Sanjay wrote in and asked, ‘why don’t you provide us with an update of what you have been up to?’
Initially, I did wonder whether that was such a good idea, certainly to share each week what I was up to at least. However, I then realised that now and again it could work very well. This way, I get to share something or a summary of key activities and highlights over a period of time of course.
Therefore, I shall start off this feature this time by recapping some of the activities & projects that I have been involved with since the podcast was launched in early April. I won’t go into lots of detail, but enough to give you a flavour of what I shall call ‘the diary of a property investor’.
I am probably not a typical property investor in some respects. For example, I don’t have lots of restrictions on my time, I have a location-independent lifestyle and my interests in property go far beyond simply buy-to-let and landlording.
That all said, here are some of the headlines from the past couple of months:
Landlord accreditation – this might sound surprising…an experienced property investor has just become accredited by a landlord association. In my case, the National Landlord’s Association was my chosen route. However, if you happened to listen to aspects of the first series and the episodes on Lettings & Management in particular, you might recall what my views are. Whilst I do advocate getting accredited by one of the landlord associations as a property investor, I also advocate utilising the services of a professional letting agent, particularly when starting out. This does not mean that we should not get ourselves educated in terms of our responsibilities of course, but we can also leverage the knowledge, skills and experience of the agent and manage them.
That all said, I thought it was high time that I became fully accredited myself and so I embarked on the online accreditation programme, which happened to suit me better than the one-day event, to become accredited. If my memory serves me correctly, there are something like 35 hours of learning in the core program, but the modules can be done much quicker than this, particularly with some experience behind you. So, now I am a fully accredited landlord and now I need to maintain my accreditation with continuous professional development or CPD, which is not too onerous.
HMO Project – another project of mine has been with regard to an HMO conversion that I have undertaken in Birmingham.
Now, it is fair to say that an HMO is far more involved than a single-let property. In this case, there was planning consent required, an HMO licence application and building control sign off for the conversion works. In this particular case, there were also en-suite bathrooms installed into most of the rooms, along with a range of other works to convert a former family home into a 6 or 7 bed HMO. The reason why I say 6 or 7 bed is that the seventh bedroom is contingent on a successful planning application. In fact, a 6-bed conversion is allowed without formal planning under what is terms ‘permitted development’.
After works, the property needs to be tenanted x 6 people, additional services need to be provided, such as broadband, cleaning, gardening and so on. The level of management is much higher than for a single let property, however, so is the revenue. In this case, the average rent for the property as a single let is around £800 per month, whereas with a 6-bed HMO it is in excess of £2800 per month. Yes, there are more costs to take into consideration, such as utility bills, furniture and such like but the net cashflow is still very attractive.
During the past couple of months, I have been dealing with the contractors to remedy their longer than expected snagging list, renew the financing, deal with various council and other bodies with regard to licensing, planning, council tax and building control sign-off and agree some additional works to enhance the structure and value.
At the time of recording, I am in the process of going through an appeal with planning for the 7th bedroom as it was initially declined. The main reason cited was that it is located in what is called an ‘Area of Restriction’, which is different to an Article 4 area, but has some similarities. The issue is that when I undertook the searches with the council via my solicitor, that they omitted to tell me about the ‘area of restriction’ and this obviously impacted on my project.
At present therefor, I have a profitable 6-bed HMO, whereas it could have been a whole lot more profitable as a 7-bed instead…watch this space!
Training & mentoring – as I have mentioned previously, I get a lot of satisfaction from helping others. Aside from writing on the blog and the book, this podcast is another example of that too. I really do like to share my knowledge and see others grow and develop. So, mentoring and training is a natural extension of this in my case. I have the experience and also the capability to mentor others and this has been an expanded area of my activities, especially recently.
As I have mentioned, I have teamed up with Damien Fogg to deliver what is unique as 2-for-1 mentoring; where both of us join in the sessions to offer a different take for our mentees. The results have so far been very good, with several testimonials and requests to extend the partnership arrangement with us following from it.
We are currently developing a training program that will be a compliment to the personal mentoring, so that’s exciting as well…again more to follow here soon!
Investor Joint Ventures – the past few months or so have proved to be very exciting in this regard. As a result of a couple of projects and activities, I have become quite involved in partnering other investors in a more hands on way.
Not only mentees that have asked to have what we call ‘shadow investor’ learning programmes, but there have also been some exciting opportunities to collaborate with people all over the world in fact.
Over the past few months, in addition to the UK, I have also started collaborating with expats and foreign nationals in places such as Russia, Brazil, the US, Singapore, China and the UAE that I can immediately recall as I prepare for this session. It has been challenging to understand some of the international aspects of property investing into the UK from an overseas resident to say the least! I am expecting this to be a growing area of interest, as the UK market has lots of appeal to overseas-based investors and the right people with the right contacts and track record can add a lot of value and comfort to people based elsewhere. Should I say watch this space again I wonder?
Tenant issues - finally, from dealing with international expat and high net worth investors, of course we have to come back to reality also. Yes, I have in the past couple of months also initiated my very first county court judgement against a tenant for absconding without paying their rent! I have probably been lucky, or perhaps had taken a lot of steps to prevent ever getting into this position, but sadly it has come about and we should all be prepared to experience this at some stage in our time as property investors.
Careful selection of tenants, thorough reference checks regular inspections and some ‘golden rules’ of tenant selection could not keep me away from one deciding that they didn’t want to respect the tenancy agreement and just left…holding onto the keys at the same time! I made a mistake in this particular case however, which I shall learn from going forward – I bent my own rules in terms of what constitutes a suitable tenant and decided to accept a tenant more on emotion than pure business. This of course is a cardinal sin for a property investor and I can probably hear you shouting but you always say don’t let emotion get in the way of your investment decisions Richard…and you would be right…and that’s partly why I say it as well. I gave a family a bit of a break in all honesty and it turned out wrong in this case unfortunately. Never mind, I learnt a valuable lesson through the experience and in some respects, a different tenant in apparently better circumstances could have done something similar no doubt…it’s just that I spun the Roulette wheel and bet on black, when it came up red. Enough said about that I think!
So, there we go…a few of the things that have kept me busy since the podcast launched a couple of months ago. Some things are new, exciting and challenging, whilst others are more mundane, problematic or downright frustrating. Be prepared for the highs and lows I guess is the key take away from this recap.
I hope you enjoyed that, it gives a little more colour and reality to my own property journey and as I hope you can see, there are still some things that we all learn from each other’s experiences. There are mountain tops with fine vistas, but some dark, wooded valleys to traverse at times too.
Would I change it? Not at all, it’s all part of the rich tapestry of being a property investor.
OK, so that’s another week of The Property Voice Podcast in the bag. We are in between series and that’s why the format is a little different. I am planning the next series at the moment and this will be available soon, but in the meantime, I hope you enjoyed the slight tangent in what I refer to as the ‘diary of a property investor’. If you liked it, perhaps we can add in the odd episode like this now and again just to bring a little more reality to the show than Casa does even!
The show notes will be on our website, meanwhile, thank you very much for listening to the diary of a property investor.
For now and until next time on The Property Voice Podcast…ciao-ciao