In this week’s episode, I am joined by Jeff Unsworth, Nana Piesie, Emelie Lindberg & David Masters.
We discuss undertaking research and analysis on our investments and developments, looking from both an area and also a property point of view.
There are some real pearls of wisdom that emerge as top tips, including the following…
Knowledge is king.
Just do the data then send people you trust to verify the data.
‘Women lie, men lie, numbers don’t’ JC the Rapper
If the numbers work they work.
Leverage other people’s knowledge if you can, especially agents.
There’s more work to this than we imagine - it’s a multi-layered approach. But it’s worth spending time.
And finally…good is good enough!
Listen to the different perspectives from our panel and form your own views on undertaking research and analysis in your property investments and developments.
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Transcription of the show
In this week’s episode, I am joined by Jeff Unsworth, Nana Piesie, Emelie Lindberg & David Masters.
We discuss undertaking research and analysis on our investments and developments, looking from both an area and also a property point of view.
There are some real pearls of wisdom that emerge as top tips, including the following…
Knowledge is king.
Just do the data then send people you trust to verify the data.
‘Women lie, men lie, numbers don’t’ JC the Rapper
If the numbers work they work.
Leverage other people’s knowledge if you can, especially agents.
There’s more work to this than we imagine - it’s a multi-layered approach. But it’s worth spending time.
And finally…good is good enough!
Listen to the different perspectives from our panel and form your own views on undertaking research and analysis in your property investments and developments.
Property Chatter
Welcome to the property voice podcast helping you to navigate safely through the world of property investing, get the lowdown and updates, insights, and outcomes on all matters property with a splash of entertainment along the way, the property voice or voice to trust among the crowd. Now, let's get started with your host, Richard Brown.
Hi, everybody incineroar episode on the property voice podcast right in the middle of the series on property core skills. We have another episode. This week, one of the core skills we're looking at is research and analysis. And this is really what do we do to kind of make sure we make good decisions around our property deals, projects, and indeed, you know, potentially areas in which we'd like to invest in or developing. So I'm joined today by three panelists who will have a good conversation about this topic. And then we've got buried experienced around the table. So we've got Jeff fonzworth, Nana, Emily, hopefully, PRC, and David Masters. So welcome, everybody, to this panel discussion, if you'd like to, I'm gonna start with Jeff, if you wouldn't mind just talking us through just a quick intro. So the listeners know who you are, where you come from, and then they can sort of pitch to you and they hear your voice speaking. So Jeff, and then perhaps Nana and Emily, I, by the way, just before we get into those, she's one word of warning, none and Emily might have some noise distraction, so I might have to skip here and there just as a forewarning now, probably won't be necessary. Now. I said that. But there we go in case it happens. So Jeff, first, and Emily, second. And then David, give us a warm welcome. Eric Richard, my name is Jeff Wandsworth been a property investor for just over 10 years now. Recently, I've been ramping up my portfolio, focusing on VR projects. And I've been looking to help low-income and Universal Credit families get into a decent house moving on forward to their lives.
Welcome back, Jeff. It's good to have you again.
Good to be back.
Oh, and now, Emily.
Yes. Thank you for having us. Again, Richard. So my name is Nana. And this is Emily. Hi, everybody. And we are from Sweden. And we invest remotely in the UK. And our portfolio at the moment is three rent HMOs. And we're completing on one beitler. And, yeah, we're looking at a lease option as well. So that's us in a nutshell. Yeah.
Excellent. Well, welcome both, and appreciate your joining. And I know you've got your hands full. So it's gonna be interesting to see how that plays out. So thanks very much. And they welcome and David.
Yeah, Hi, there. Hi, there, Richard. Thank you for coming back again. So I'm, I'm David, I have a property sourcing company with someone else. So we essentially focus on sourcing for specific clients spread across targeted at the UK market. And we've been running that business now for just over two years, I think. And then from a personal perspective of rebar, I say recently about starts this year, bought my first house, which is I'm treating as an investment. So currently doing works on the property with the idea of renting itself and then doing the same process and building up a bit of a portfolio myself. So yeah,
that's me. Excellent. Well,
there you go. And, you know, people know me, hopefully, but I think what we've got is a nice fairy background, you've got overseas investors, we've got you to know, someone more experienced in a different sector. We've Jeff and obviously someone who sources property for a living actually, with David. So I'm sure we have a wide-ranging conversation. So the topic research and analysis, I'm sure it's the sexiest topic of all of them, we're going to talk about on this series. You know, I think people really get into it, but you know, I guess the probably a good place to start is, is do start with the chicken or the egg. Now what I mean is, do you start by looking at property or an area or an area or property? So that's the chicken and the egg question. So, you know, how do people tend to look to sort of zone in on an area and then drilling deeper to try and find an individual property or two people choose? Are they fairly area agnostic and then find property deals and then assess the area? What was people's approach generally speaking
Jeff, let's start with you. Yep. So the first thing that comes to mind is knowing the area. How do you know you've got a good deal with the property if you don't know the area. So there's a lot of talk about your goldmine area, which I think that's Miss referenced quite a lot of the time, it's more the area, you know, the goldmine area where you've researched, as they say, is knowledge is king. So you need to understand what you want, what deals you want to source. So focus on an area. So more people talk about focusing on areas close to you. So you can totally see things. Or areas where you've had past experience where you grew up, and moved away from or where you went to university or the number of different key factors where you have the knowledge and get to know that area, get to understand the figures get to know what is a good deal, what isn't a good deal, understand the areas in the particular city or town, which are good areas to invest, you could see a great property and realize it's in the middle of the red-light district of a particular town. It's a great property. And it's a great price, but it's an awful area. So we're not going to get great tenants if at all. So that's things like that you've got to be very aware of when you're first actually looking at property deals. And do the things are knowing what you want with properties. So do you want to have a beta later on? Or the HMO? What are you interested in? And that's the sort of thing the deals you're looking at. So if you've got an HMO strategy, and we're looking at where it's a good place, HMOs, or student HMOs, or professional HMOs, what areas are good for those. So there are all these key indicators that you need to know before you actually start offers in properties. I could go on revenues now look at a great property and somewhere I've never seen before, and it's 120,000 for a four-bedroom property. And I think that's a great return on investment because I look at my rental income for that area. But I don't know that area properly. So it's not a great investment for me.
He points there, I think we're, you know, know the area clearly. And so there's a degree of understanding and familiarity about your area and obviously, know your strategy and assess whether it's suitable in the area. And I think the other point was, there are areas within areas. So there could be a town or a city and then you know, the wrong side of the tracks or the wrong side of the road. And you could be in trouble, I think, pretty key points you're making. Thanks, Jeff. Appreciate that. Now, Emily, you're poised. Would you want your perspective?
So for us, obviously, because we are living abroad, it's very, very important for us to get the area correct. So what we do is we, beside what Jeff mentioned, we also contact the letting agent and people on different forums and ask them what they are saying about different areas just to get what the local people are saying. And then we all have also started to use this website called property data. That's very good. And yeah, and if we combine all of that, and maybe if it's a big city, if you look where the Tesco bus goes, that's really, really good. Because then you know, you know, people that are maybe in like, in our situation, we're like a small family, we might not have a car or one of us have the car, not one don't, that we used to want to jump on the bus route? and etc. So have I missed anything?
No, I think you have covered pretty much everything. So like analysis is very important to have people that can look through the areas for us and let us know what's happening since we are not on-site pretty much. And then we need to verify it, of course. So that's why we have different sources of information pretty
much like you said, Richard, yeah, trust, but verify.
So I mean, you make some really good points there. And I think the fact that you're further away, you know, it's interesting because there's probably quite a lot of remote investors anyway. So you can be remote. You could be said, working in one city and investing in another city. So you'd be remote in that context, but you obviously in a different country. So that probably exaggerates that. I think it's important that you said that you get different perspectives. I quite liked what you said about the bus routes. kind of brings in transport links. You know, we start to we could talk about investment fundamentals. You know, we're starting to talk about a couple of them, they kind of come out naturally in a conversation, we'll probably come back to that. Can't wait for David to speak, because I bet he's got some really interesting points on investment fundamentals. But yeah, it's a really good point. So that I never really thought about the Tesco bus route. But that's, that's good to know. good tip. Thanks, Nana. And Emily and David arches to do it Really?
So how do you go about things? Yeah, so I think from from a sourcing perspective, we tend to, and Jeff mentioned, there is what are the ways the client looking for in terms of their actual asset, so for example, holiday lat, you'll be looking very different locations against the potential HMO, or if it's capital growth that they're looking for. Versus rental income. So for me the fundamentals, actually knowing what asset type, the client is actually wanting, because that will have a steer as to, you know, roughly the broad areas that people look for. And then I agree, I think, rather than you can make a lot of properties work just based on numbers. But as kind of everyone said, that that property could be located next to a former coal mine, and actually, everyone's moving out of that area. So understanding the wider economics of infrastructure employment prospects, transport, as people have alluded to already, is really fundamental, because then it gives you an indication on what tenants you can attract. And the tenant types as well. I mean, it makes no sense. You could find a HMO that works in a city. And you could say that you could get students there, but they could, if there are no not good transport links, and they're two miles or three miles outside of the actual call town, then you're probably not going to attract the type of tenant that you're after if it's students, for example. So yeah, I think fundamental is knowing the actual asset you want or targeting as per your strategy. And then nailing down if you're not familiar with geographical areas, nailing down key fundamentals that will guide your investment decision process essentially. Yeah,
of course, you you source for other people and do you source in one particular area David, or do you source in different areas?
No, all over so we have clients looking
to Liverpool,
Leeds, Nottingham, and then down south like Swindon bath Bristol, Portsmouth so all over the place. So kind of the general structure of how we get to understand some people know what they you know, where they want to go for because they have a, you know, they're either local, or they like that area. But we do quite a bit of work in trying to understand what their criteria are, what they're trying to hit in terms of their investment. Returns, what actual asset profile are they looking for? Ah, Mobi bytes, that kind of thing. And then, you know, what's, what's important to them? Is it tenant type? Is it long, long-term tenants? Is it capital growth over do want the capital values to hold. And in that, once you start nailing down into some of those finer details, it gives you a bit more of a profile that allows you to target specific areas. And then, once you've got like a handful of areas in target even further by speak to agents, getting an understanding visiting the area, understanding what the, you know, what being in the area is like, what's the kind of the vibe is it? Is it a vibrant city town, or is it quite rural by it? So?
Yeah, there's quite a bit.
I think the further analysis that's required often.
Yeah. And we
were talking about sort of fundamentals, investment fundamentals, but you know, just so that, you know, people understand what we're referring to collectively, what, what are the sort of what are the investment fundamentals? What is the sort of the basic building blocks of investment property? Let's go-to investment property primarily. Now, what do people look for as fundamental to that investment to underpin their investment?
Some key points, since like three main key areas were looking for demand, supply, and demand, looking for growth, and then the key one is returned. So if there's none of that, of the above, so If there's no supply and demand, there's not worth investing in areas. So you need a certain amount of volume in sales. And before you can actually start looking at an area and assessing the property, so you don't want to invest in a small town, in the middle of literature, you want to look at somewhere a bit more substantial. So you get better figures, it's easier to understand unless you're very local to that area, and you're very, you know, very well. And then you're looking to grow and then return on your numbers like David mentioned, it's what investors are looking for. And what was their profile? Are they looking for growth? I know in the past, I've focused on return. Because I've been in the game for 10 years, growth has been one of those things that have just happened. And it's just one of those wonderful things that creep up on you. And suddenly, you realize that what growth you've had on your portfolio is great.
Absolutely. So we've got those fundamentals in terms of the, you know, supply, demand, growth, and return. But what are the drivers of those things? You know, what what, you know, collectively, what do we look for? I mean, so for example, I'll give you one of my drivers. So a real shortcut that I use is population, you know, so if there's a decent-sized catchment area around my property, there's a pool, then of people who could potentially look to relist your rental property, they could rent that property, obviously, if it's a sale, they could buy that property. Now, I know you pick counterbalance the demand side with supply. So you look at both, don't you look at what, how many people? Are there population size and have the right type of profile, depending on what type of tenant profile but equally, what's the competition? You know, is there a glut of properties available for rent, but what other drivers do people tend to look for in the local area, which might drive those investment fundamentals that you've Jeff referred to
I think TV can go on. So all councils will have a website, whereby they'll show I think a few things for one of them is planning. So how many planning applications are being approved or denied, will show the activity of the Council. And really, you're looking at some of the biggest games. So you're looking at how many new houses are being because every Council has targets to hit for new housing. So you're looking at what what what's the future demand was the future pipeline. So are you able to get in now and benefit from maybe the kind of over under supplies thrown over demand? But also on council websites, they'll do a lot of most of that, anyway, that I've seen will have kind of regeneration projects that are planned or forecasts, or ones that are kind of undergoing. And I think they come with respect to just point of supply and demand point, if there's regeneration in the area, or if there's investment going into an area whereby they're, they're looking to attract new business. So you know, they're really pushing a lot of like enterprise schemes, or I'm just trying to think of another, there's a lot of that kind of scheme out there at the moment where they're trying to, you know, up and coming areas driving new business. So they'll have like tech hubs or, or whatever. And that, for me is a key part. Looking at this future, the area's future potential, because you'll, you'll know that if there's a key kind of employment hub or infrastructure that's being built, there's going to bring long term interest into the area, which probably will mean more housing requirements and ultimately will mean just demand for property. So I think that's another thing that can be included in one of those investments.
Sounds good.
Morning. How many of you got anything you wanted to add to that? No, not right now. Gotcha. Jeff, you're going to come back? Yeah. Somebody
examples of that is obviously teach us to high speed links to London. So looking at the transport infrastructure, upgrades for Birmingham through Manchester, or key parts of their economies and how they're going to thrive in future. Another thing I've seen previously, previously, recently, is the new free ports. So for example, I've been looking around liberal in the northwest, they've been in a basement. And obviously bootle in Liverpool is Freeport, but a part of that infrastructure is a whole The facility in just outside of St. Helens, so it's going to be a huge warehouse facility, which will need a lot of workers. So you're looking around those areas for that type of property that that sort of worker will want to actually invest in, or want to rent off me. So there are lots of these projects, and especially if you look around the country, this port facilities, which are actually actually supporting those reports, as well, so you were a little bit further out, and what's going on the government outlines
sounds good, I think, you know, so to summarize, really, some of these drivers of these fundamentals, you've got people or population, you know, catchment area, you've got investment, whether that's, you know, enterprise schemes, or local investment or, or infrastructure investment with road and rail schemes, for example. And, and I think the other big one is, is jobs, you know, what's going to provide the income for, you know, our tenants or our house buyers, because there's a flip to that. And, Jeff, I'm looking at your direction, because if you target working tenants you're interested in in jobs, you're interested in the employment rate in the area and how many employers are. So it's not necessarily so dependent on one potential large employer. But if you're targeting, let's say, people are not working, then actually you may be looking for even I don't know if this is true, in your case, Jeff, but you may be looking for where there's, you know, maybe a higher than average unemployment, would that be fair or not?
Yes. Now, what I tried to do is support people on low incomes. So people who are trying people or got jobs, security guards or forklift drivers, forklift drivers, or people who work in supermarkets, people who want to work and actually can't earn a decent living doing those jobs, and maintaining a house and family. So I want those people who are hardworking or unfortunate to have not too good lyrics. So they're the people I'm focusing on. So I wouldn't particularly focus on someone who wants to be unemployed. I prefer to focus on someone who wants to work and needs top of the housing allowance by Universal Credit or Housing Authority. So that's where my focus is. A lot of people want to do that. Do that. But then you do get some that don't want to actually work? And am I interested in that type of person?
Yeah, but the general point being that your tenant profile, you know, there needs to be a concentration of your tenant profile, whether it's, you know, hard-working tenants, so-called professionals, people who are, you know, students, people who are maybe not working, and that will dry, you know, you need to have the pool of those tenants to drive the demand to fill your property. And I think one of the things that were kind of just before we move into maybe looking at the properties side of things, one of the things that you've kind of alluded all alluded to, to some extent, but didn't say necessarily directly. Well, you did, actually, Jeff, you said growth. So, and some of the things you've been talking about point to trends. They talk about, you know, what, what will happen? What will happen with the housing policy? What will happen with new investment in infrastructure or new jobs? And you know, I think so there's, there's an eye on today, but there's definitely an eye on what might happen tomorrow. And when I say tomorrow, in property terms that you know, it could be a couple of decades, ultimately. Fair. So looking at today, but also looking at what it could be trending. And could it trend up? Could it trend down? Is that fair?
Yeah, I think so. And something that I did when I was looking for my own personal home. So which I don't know whether it's a trick or not, is some of these big house builders, the way they work, they land bank, and they do a whole load of research about the lands that the buying, because they're looking for sites that you get 100 plus units on. So they have a whole team that's working on what is the future potential of that specific area, because they're not going to land back something that they a don't believe in is going to actually affect that good kind of growth, or at least good sales prospects. And B, the other side of that argument is they also were looking for somewhere that that needs to grow with the council. So they're looking for favorable planning. So that coming back to your point there actually is if the big house builders are looking in those areas, and you're able and you're able to see on the planning portal that there are lots of and there are different tools out there. There's property data, I think, Nana mentioned and there's realize and there's another one that the name escapes me and you've actually We spoken about this, which in the past, I think it begins with Ben, but it's specifically for land. And you can find, you know, large parcels of land are owned by different entities. And if you can find on these portals, large locations of essentially land banks deals, though kind of got planning submitted for 200 houses, and you then target an area that goes, Okay, I know in the future, that's going to have a lot of new housing stock coming to the area, you know, from a capital growth perspective, the chances are, that area is going to be on the increase. So that's how that's one of the ways that I found what I, well, the location I'm in at the moment, which is in the Midlands, because barracks, for example, a building a big 200 200, plus houses, opposite the railway station. And there's another one just in the outskirts as well, close to North Hampton, which I think is one of the other house builders, another 200 units, then, for me, if they're building there, there needs to be a reason.
So yeah.
Thanks, David, a Nimbus map is it?
Yeah, that's what numbers maps.
I don't know if Nana and Emily, you want to add to that at all?
still good.
This is really tough, because I know they've got some noise distraction in the background, they kind of gives me a thumbs up if they can, they can or can't talk. So that's a yes. And that's no. So the other ones just to pick up on David's theme there about land backing land banking developers, which is a really good tip for future, you know, you know, supply. I think other just short circuit tips are things like the supermarkets and some of the chain coffee shops, you know, cost the so called cost effect, the so called Waitrose effect, because all of these people are very significant sort of land buying teams who do a lot of research, and you can bet your bottom dollar, if those sort of supermarkets are looking to put in a new shopping, you know, supermarket, essentially, in an area, then they're suggesting it's ripe, you know, to fulfill demand in that local area. So that's kind of kind of a nice hack, if you like, and I guess everybody's talking about property hotspots, you know, we have people that you want a decent rental investment return, but everybody wants to get that capital growth, they want to get above average capital growth. So look for the so-called hotspots. So that's often regeneration areas, maybe a place that was hard to access, you know, commuter towns, which might become into reach of a major city, this could be changing in the current landscape, where more people are actually moving away from cities potentially, right now, that's a current trend, you know, so it's trying to identify hotspots, you know, gentrification areas, you know, regeneration into, into perhaps previously not so desirable location. So I'm kind of just sort of throw that out there because I don't know if anybody wants to add to that
up a perfect city, it too, too quick to mention his Aberdeen, because when the oil price, and now your business going well, then people tend to go up there and where it can hear a lot of boom, there. It's the same Marin, in Sweden, because we are close to Norway. So when, when the oil business is good, they always seek a lot of people to come to work. Yeah, and
you make a really good point there. Because, you know, that's that, that really talks about their dependency on one particular industry. So in that case, oil, quite rightly, previously, we've had coal mining, shipbuilding, you know, different types of industry concentrations. But if there's a, if there's a turnaround in that industry, it can affect your prospects, whether it's capital growth or indeed, rental. So I think one of the reasons I tend not to chase those sort of large over concentrated areas from an industry or employer point of view, is that risk that it can change and in fact, Aberdeen's a really good Case in point, if you look at Aberdeen's house prices more recently, they've been on the sort of downward trajectory, whereas I think, in 2000, early 2000s, they were on a very upward 1990s, early 2000s, upward trajectory above average. So they kind of went up really quick and then they're kind of coming down quicker than average as well. So as a chance to look at more widely available things, you know, like inward investment, multiple employers, transport links, you know, people mentioned HS two, Crossrail would be another example motorway, bypasses, things like that. So that's good. So let's talk about the area. And you know, I think I've probably one point I just wanted to pick up on anybody here involved in projects doing not just a rental property, but maybe some kind of development, whether it's small d development or large D development. David you so I think she's I'll bring you in because Are there any different factors that you might need to consider from an area point of view, if you're thinking of kind, some kind of development or project activity, that might be different to just say, a pure rental property? I'll give you a helping hand supply chain. Helping Hand is the cue, because who do you need to help you undertake the development activity? I mean, I know in your case, you might be rolling your sleeves up and painting the walls or spoken to the Builders and Contractors. So you know, that's where I'm going.
Yeah, no, well, and supplies, well, how easy is it to get materials to where you're building. I mean, on larger developments, if you're more rural, you know, any kind of Country, Country Roads, and you've got big timber frames, you know, it doesn't have to be a consideration, that, you know, you're gonna have to get a big lorry down there to deliver your timber frame. So the logistics of it certainly has to play a factor. And something so simple, like, if you're building in a field, you're gonna have to start by building all the infrastructure. So you're gonna have to start by building the roads. And depending, you know, going slightly off a piece here in terms of potentially larger projects, but if you're, if you're looking at a, you know, reasonably sized project of, let's say, 10 houses, and you're just building on the field, the first thing you have to do is build all the infrastructure to actually support the development and all the site, logistics and, and travel. So if you are in a, in a rural area, or even a built-up area, things like to storage, things like security in place, you know, permits with the council are all things you're gonna have to consider as well access to utilities. Which, you know, specifically is more of a problem when you're building, in rural locations. And if you're building in a kind of more urban built-up areas, is the utility provision sufficient? Will you need to have a put in a substation which, you know, is no, no cheap thing to do? So, yeah, for developments, that there's a whole host of different things about just the general logistics of delivering the scheme that you're proposing. And if it's just the Brr, kind of single house flip, from my own experience, what you're referencing is access to builders and tradespeople, yeah, it's their availability.
And on the smaller scale, as well as previously had a perfect property. And then, great, it's exactly what I needed in down three-bedroom, little garden, everything, everything ticked the box, to add to the property. It's on a feeling removed, setback from the main street with a set of traffic lights that we aligned outside, new access to the rear, the nearest parking was probably 100 meters away, nowhere to drop materials off, things like that. So there are little things like that, which can also affect any deal. And that's when you get to end, butterball to things and just the smaller projects and you realize this is not going to work for me on all my contractors.
One of the key phrases, you know, my contractors, right, so of course, if you go into an area, let's say you go to a new area, you might not have my contractors, you know, you have to go find them. And so JB talks about availability, things like that. And usually, good contractors are got, you know, that backs up in terms of their availability anyway. And then, you know, how do you suss out a good one from a Nazi one, when you you're going into a new area? So it goes back to kind of the cookie-cutter approach. So if you go into an area, and then you're going to do you know, development, whether it's refurb style development, conversions, development, for long development, ground-up or whatever, then you're going to need that a team of contractors who can you can depend upon. So it makes more sense to kind of try and repeats your activity in a smaller area where you can you use and reuse the same kind of team effectively. So that's the contractor side of it. And I do agree with the logistics side of it as well it came out because the other thing is, particularly from a rentals point of view you're going to need what you want necessarily depends on how you choose to manage the property. We've spoken about that before, but oftentimes, you might need a let's say a listing agent or something. And so the having access to decent letting agents to support you in that area will also play a part because So, okay, we got that area, we kind of talked about a little bit about projects, kind of what to take into consideration. What about the deals? And what about the property itself? So we've previously spoken about sort of running the numbers, you know, and, you know, key performance indicators and measures of return the spreadsheet side of things. What about that non-spreadsheet side of things when it comes to assessing a property? What do we look for with the property itself? So we, obviously one aspect will be the area. But if we're drilling into the property, what else would we take into consideration to suss out whether it's a decent rental or, you know, sale property flip properties? or otherwise,
what do people do? Well, I think, when when you go to see the property, and I'm assuming you can see the property. So actually, that's one thing, same
assumption, that's the property.
And if you're unable to get someone that you trust to, because seeing the property in person and flesh, we kind of alluded to it earlier, you can find something on Rightmove that, you know, ticks all the boxes. But actually, when you go to see the property, as Jeff said, there may be that there are double yellow lines outside and you can't park. And if one of your key criteria, this is personal property, or if it's, you know, you're trying to target a buy to let for a family, they're going to have to get somewhere to park if it's a house, for example. So seeing the property, I think is fundamental, and actually seeing the structure. So you know, if you are able to find someone who's an architect, friend, or someone that has some experience or builder, for example, on things like subsidence, or dam, those kinds of things, because those are kind of costs that can sneak in and well significantly, throw a project out if there's something wrong. And then also other pieces, like how old is the boiler. So just looking at the general wear and tear of the building will give you a good indication of if your works cost estimates are correct, or in the right ballpark, or if you mark what miles out. And depending on your investment kind of criteria, and what the council requires room sizes, if you're trying to convert something into an HMO, and the rooms just by the nature of the floor plan are below the local council's limit. I mean that that can be a problem and it could be such that if you are unable to kind of redo the whole floor plan, then it won't work for what you're looking for. So those are just a few points for me really, I don't know what others think.
Usually, with like, we target terrorist houses. So when it comes to properties, because that's what we've been taught is mostly what people rent. And when you go to like a detached or maybe semi-detached, it's more if you're going to do a flip, obviously, you can do a flip on a terraced house, but it's more exclusive. And something else I think we should mention is the roof. The roof is very important to know when the latest like fix the roof can stack that can be a big issue as well. And then you don't know what's besides the plastering and all of that. Even if you don't do it back to break so you can get some surprises when you open it up. But yeah, I think David covered everything.
One of the things you need to consider as well on all these deals is we've talked about what the deal is and what persons looking for what everyone is looking for below market value do and that's the big word everyone uses and what worries of below market value deal in a rising market that doesn't matter. At the moment the market, it's cooling down slightly but the previous sort of six months, four months, the markets being very hot. And for example, for me I pay market value for a property, and assuming it was rundown, I paid market value to redo the boiler we do a lot of things in that property to make it something that I wanted to get out to someone It was a condition I wanted and as a price, I was willing to pay thankfully To grow the market, it's turned out very well. template grew for the last 12 months. That's perfect. So that close my below-market deal without actually getting below market value deal. So that's great. But it's also, when you're looking at the properties, look at the seller's circumstances. So what's the seller doing? Why are they selling could be divorcees, it could be selling a property because the children are the property of the parents because they passed away. That's generally what I come across quite a lot. And it's how much they want, how much they're willing to wait how much they need the money. There's a lot of factors involved. And you need to sort of deal with each property is very individual. For example, you can look at a property that has been advertised incorrectly. So for a few, many years ago, now, I bought a two-bedroom house, which was originally a three-bedroom house, but persons living there by themselves converted two bedrooms into one, so they had a nice bedroom space. And I then went ahead and converted it back. So instantly adding value to that property, which a lot of people just didn't see. And first, the second sentences, also look at alternative properties. So yes, right move and is a great place and simpler and all the big portals. Look at commercial properties. So the big thing at the moment is residential conversions for the change the permitted development rights for policy shops, to be able to convert them to class, three dwellings. So you need to look at that. And, yes, you do need prior approval from the counselors. And there's a lot of other factors that you need to consider before actually go into that. But with the right background information, you can look at the planner portals, speak to local council banners, if you're lucky enough to have the means to compare, planning and retells.
Just one point sorry to add to that, Richard, which you taught me is, what's your option B. So if you've got a property that you've seen, that's just a single kind of is just one-way street, it can only be used as a buy to let that you know that there's an element of risk in that. So something that I know, you've already said always said to me, is, you know, what's your option B? Is there an opportunity to convert the loft? into a fourth bed or a third bed or an extra room? Is there an opportunity to extend somewhere? Is there the opportunity to repurpose the building, as Jeff was saying, you know, some commercial properties like mixed-use that kind of thing? So that's definitely another really key consideration, I feel, and especially when presenting a deal to a client, because the whole purpose of it, you know, it's an investment, so there's a risk. So if you can mitigate risk by having option B, option C, with different different types of strategies, that's another key column. And the final one that I just thought was very fundamental, the title. So is it freehold, leasehold? And understanding? is specifically if it's leasehold, what are the terms of the lease? So is it all kind of what's the positive lease length? Because it well, that can affect mortgage ability can also affect massively returns depend on ground rent service charge, which would make it kind of almost worthless in terms of the return you're going to get. So those are the key things property specific, that need to consider salutely. And so you know, we've talked a little bit about the condition of the property, the accessibility, you know, so you can if you need to do works, we talked about BMV below market value. I was going to interject actually, Jeff, when you started talking about that saying, well, in the current market, what's BMV? I'd say 5% above the asking price that's below market value. By the time you've kind of gone for some kind of cycle, you can illustrate that point really well. And I think Yeah, absolutely. Option B Plan B. And I talked about that. You kind of mix the sort of plan B option B as mitigating the downside to kind of avoid risk. So could you flip it if you can't rent it kind of thing that would mitigate risk or the other way around? But equally, I think what you did the examples you made really well about added value potential. So could you add value to this property in some way, for example, by extending converting? Now if you restricted like it's flat, for example, if it's flat, it's going to be difficult to add value significant value to a flat, there are ways you can extend the lease, you can maybe do a Jeff talks about, maybe there's quite a large, there are two large bedrooms, where you can slice one up into two, for example. And if you get a premium for an extra bedroom in a location that might be away. But generally speaking flat, you can't do much with the actual footprint, it's fixed. Whereas with a house, you can go up, you can go, and you can go out pretty much, sometimes you can build on the side. So I quite like to have added value potential, even if I'm not going to utilize that on day one. And as you say, David, you can also have Plan B, option B, I've had that for myself, I had a flip project that came to market the project and but during my refurb next door, put their house on the market at a lowball price. And that ruined my sale potential. So my option B in that case was currently with a rental. And I could live with a rental. So I rented it for a period of time. And then, you know, just revisit the market later, it wasn't my preferred option rental, but I couldn't live with it. So looking at option B, so you're looking at the condition of the property, you're looking at some of the added value or risk mitigation options. And you kind of touched on one there, which I think is really interesting, some of the legal elements. So the title would be one, at least would be another one. Are there any sort of potential legal ramifications that could affect what you're going to do could be planning conditions, or it could be in an article for location, for example, or conservation area? So those sort of things can have a bearing on the property too. But I was thinking, you know, apart from that, you know, think about who's going to live there? And what will be important to them. So whether it's a tenant or homeowner buyer, or even an investment buyer, what would be important to that kind of occupant or buyer about the property itself, what might you want to consider?
Well, I think something that has been really highlighted during COVID is outdoor space. So certainly that I've seen more kind of blocks of flats, with balconies, you know, and just houses with got outdoor rear garden space. And then, as Jeff said earlier cars parking. Thank you.
And as we talked about before, which employees? Who are the employees how to shoot more? Are the links involved? So are the links or the trade links near the property? Who are the people? What areas of work are those people going to actually be involved with? So if you're looking at people in London's meeting from the commuter belt, you want something by a train station? You're too worried about parking. Nana, you
wanted to add to that?
Yeah. So I'll speak for Emily. So she said, schools nursery. employees have already touched that part. Like for, like playgrounds. And some even go so far as police stations? And you know, you've touched this before Tesco? And yeah, grocery, just those types of stuff. That depends what type of demand and have an I mean, let's say if you have a student tenant criteria you're looking for, then they may want to have a pump near them.
Or offering
free? Yeah. So it all depends or in some ways, you're maybe having blue colors that have a working site, and they're close by. That's what they're looking for. So it's different. Do you want to add something?
Yeah, I also think like the, what kind of people are your neighbors, as a family if you if you're targeting a family, they might want to have other kids in the neighborhood and not be, for example, having HMOs close by and pubs go by and like, youngsters going around on the streets in the afternoon and evening times. So I think you should look at Look who's living in the property besides the one you're looking at, as well.
So there are some really good points that I think, you know, you know, I call it my star criteria, and you kind of listed a lot of those out. Nana and Emily, in particular, I think, you know, schools, which includes universities, actually, so it's an educational establishment. So it could be schools could be nurseries, could be universities, depending on your tenant profiles, its families that's really really relevant. If it's young, you know, singles or couples, it's not so irrelevant, but they might not want equally want to live just outside a school playground. If you know a young couple of something like that, for example, so schools or education establishments, transportation links, now transport links is relevant to the people who live there. So you know, it could be a car could be rail or traveling, it could be a bustling can be just, you know, that the cycle route. So I think the transport links are also important on the bus route. And the other one's amenities, amenities, that's the a and star is you know, so about your doctor surgery or hospital, if that's relevant to you, your shopping center, restaurants, shops and bars, generally speaking, banks, post offices, and police stations, that's an interesting one. Not really sure what your tenant profile is now, but you know, they want to be close to a police station, clearly. I think that's a securities home list. But actually talking about security, because it gives me a cube, a lot of people look at crime stats, as an indicator, and, you know, think you can, you can look at sort of crime stats as various resources, you can also look at things like how deprived and the area is. And if you prefer to find a deprived area with high crime stats, well, you're probably gonna get a low price property, actually, but maybe it's not the safest place for people to live. And so there's that. So and I think the are in my star criteria is what I call revenue, which is about jobs and investment. So when you're looking at specific properties, this kind of look at those things. Something that occurred, I don't particularly do this too much myself, but a lot of people do, they do it either on the desktop, or they do it. In reality, it's kind of a walking school. So there is something called walk School, where you can kind of get a score for your neighborhood. And that's, that's quite helpful for people to look at. And I think if you don't literally go for the Walk Score, and sometimes it's forums, what's it like living in this area type of thing, usually, it paints a really bad picture, is everybody slaughters the areas. Another tip is to walk the streets, literally and walk at different times of day or night. And that will give you a good, a good feel for an area. Sometimes an area feels very different during the day, than at night. And you know, you just have to imagine yourself, you know, what, what would it be like, after hours walking down the street, maybe as a single person, would you feel that safe? And you know, people this is the sort of thing that goes through people's minds. And as well as the outside space. as David mentioned, I think these days, broadband, fast broadband speeds is a real, you know, priority, I think, for a lot of people, too. So there's some, there are some factors there. But I guess, you know, probably just thinking about unless people want to add at this point, I'm going to start asking for a bit of a wrap-up in a second. And you know, what, I always ask you the wrap-up, if anybody's got any tips or hints or, you know, things that they particularly would warn people against when it comes to research and analysis of properties in areas. So have a look, think about that. But before perhaps there's anything anybody wanted to add to anything that we've kind of missed that you think, hey, Richard, you can't leave this topic without talking about this. Getting some shaking heads. Alright, in that case, what I'm gonna do is just let's close I'll just go around the table and any sort of concluding thoughts or top tips if you have any.
You know, go first. As I said, previously, knowledge is king. No area, know your target audience. And from there, you'd likely you're going to succeed.
Great knowledge is king now.
Just use the data and then send people that you trust and can verify the data. Cuz like, my favorite rapper says, women like men lie numbers. Don't
you have a rapper Who says that? JC.
Yeah, and on the numbers note, if the numbers work, they worked.
Okay, but there's a bit of a focus on numbers in your household. Excellent. David, any final thoughts from you?
So really, I kind of just support what the other guys have said really. I think leverage other people's knowledge if you can agents especially because they But if you try and build a rapport with them, they will you'll get through the sales part and they'll actually give this really useful information. And just agree with Jeff, knowledge is king really know your area?
Do I think there are some really good points? And David, do you? Did you leverage a really good one? So utilize people who've got who familiar with the area and the properties and makes sense to me. So some really good points there. I guess, you know, all I would say perhaps, in addition to that is it was probably more work to it than people imagine. I think if we've listened to what we've been going out here, it's not just a case of picking a property on Rightmove, putting an offer in and, you know, buying it and sticking a tenant in there, you know, doing research and analysis and our investment purchases, they're one of the most, if not the most significant expenditure we'll ever make, maybe besides our own home, potentially. And so we need to spend the time we invest, do the due diligence, it does take time. And so we and we can practice getting better at it, we can bring in extra people to help us. But you know, it's worth spending that time so that we don't come across, really, and end up with maybe a bad investment. But at the same time, we also have to act. And my favorite saying is good enough. And so you know, we don't not necessarily looking for perfection either. So, you know, maybe an eight out of 10 is good enough. Doesn't have to always be a 10 out. And anyway, that's my additional tip. So I just want to say thanks to my panelists again. So Jeff nanner, and Emily and David. Thanks for joining me once again. This week. I think I'm just going to cue people as to where to find the show notes. You can find the show notes over at the website thepropertyvoice.net . If you'd like to talk to me about anything to do with property or this episode, podcasts, thepropertyvoice.net is how you can find me reach me. And indeed, we tend to publish the contact details of our panelists. So if you'd like to reach out to them, and contact them, I think I have everybody's contact details because we've seen each of you before. And again, all that remains is to thank my panelists. Thank you for listening. And until next time on the proxy voice podcast is judging.
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Transcribed by https://otter.ai