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I have a 6 bed HMO student let in Brighton which I manage myself. I get a lot of letters from companies offering guaranteed rent and management and light refurbishment, offering cleaners and gardeners etc. One such letter came today from Fireside Property Management - Paul Malone and Michele Kingston-Malone - 10 Egginton Road, Brighton.
Can I ask any of you who have used these companies whether you have found them to be good or wish you never went to them. Any one any experience with Fireside Property Management?
I am assuming they want a lot of money for what they are prepared to offer!?
Thank you in advance for your advice/comments.
Hey David,i am responding to your message as I run a similar business. How guaranteed rent works is they will do all they have proposed to do without charging you for it, their management fees are inclusive of the rent they will charge the tenants who they find to occupy the property. They charge the tenants to cover what they need to give you and the keep the rest.
A guarantee is only as good as the person giving it.
Start by checking them out on companies house, see how long they've been around and what their balance sheet looks like.
I was unable to find a company by the name of Fireside Property Management on Companies House.I then went to the FPM website, and no company number was displayed, and neither was there a privacy notice - these are both legal requirements.Finally, there was no mention of being members of an independent redress scheme, which should also have been prominently displayed on the website. It became a mandatory requirement for lettings agents and property managers to be a member of an independent redress scheme in October 2015.Unfortunately, unless I have missed something, and happy to be corrected if I am wrong, there seems to be evidence of non-compliance.Before taking this further, I would ask the company number to check them out on CH and also for their ombudsman membership number.As John said, people make all sorts of guarantees, but many of them do not actually have the financial resources to back up the guarantee, so it is virtually worthless in reality.This is why due diligence is required, to ensure that your property will be going into the hands of compliant agents who have financial resources to be able to fulfil the guarantee.
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Thank you very much for your reply Vanessa and also those above. Much appreciated and I will be extremely careful. If something seems too good to be true, it normally isn’t a good idea.
I'm a bit late to the thread but hopefully I can offer some insight!
I myself run a guaranteed rent scheme - I went through very thorough training, and have both a mentor and a backer who ensures I can deliver my payments. The reason I tell you this is not for your business but because I've seen a lot of people go through the training, or to conferences, A LOT. What I've observed is that many see it as a get rich quick scheme, which it certainly isn't. What it is, is a minimum capital start up venture meaning they require very little money to get started. That in turn means it's easy to get in, AND OUT. With that in mind, a lot of people in the industry are casing the market place without having actually taken any action!
I actually spoke to someone who asked for my advice on these schemes. She gave me her business card with her own company name and e-mail, and I said I would e-mail her. Her response was that the e-mail doesn't actually work! Again she was another one just seeing if it [guaranteed rent scheme] could work.
You can do all the research on the internet you want and you will get some helpful insight, but the bottom line is that these companies are asking for your business not vice-versa, so they must prove to you that this service is not only viable for your property but also suitable. They must ensure that they put your doubts to rest.
My advice is pick up the phone and start asking them the hard questions. If they're serious about your business, and they're confident in their services, then they shouldn't have any trouble answering your questions!
What redress scheme are they part of?
Ask to see their calculations, ask to see their rental demand surveys (this is what ensures that they can meet the guaranteed rent)
Did they identify your property, or did they just send out a blanket of sales letters to Brighton HMOs? (If it was a blanket, then ask them to do a discovery piece to ensure their service is viable) - I have sourcers helping me and I say no to 90% of the offers because they aren't viable.
Will they offer a deposit/x months rent in advance?
Look at their contract and the break periods - it isn't always the case, but a contract with easy break periods for the supplier can mean they aren't confident in their ability to deliver.
What are their credentials? Have they had training in their industry? Do they have experience?
HOW do they know that they can pay the rent on time every month?
If it's a guarantee, HOW do they guarantee it?
Ask any questions to settle any doubts, don't accept excuses (only proof), and use your buyer's advantage to make sure you're covered!
With regards to FPM, I'm with Vanessa, a lot does not check-out just from an initial look! They may just be getting started though, so conversations need to be had.
If guaranteed rent is something you're truly interested in, then I can happily put you in touch with some experienced and credible vendors in the area. If you want to know more about how the scheme itself works, and how it affects you, please feel free to reach out to me and ask me anything. I'm also happy to look at your property (electronically, I don't operate in Brighton!) and offer some advice as to what to expect/demand from offering your property to these vendors.
Hope I've helped!
Thanks for such a valuable contribution Jordan. I notice you are new to the tribe, so a warm welcome. I hope you will stick around and share more of your R2R knowledge.
Agree Vanessa. A valuable resource! Much appreciated Jordan. Thank you David
Hi Jordan, what a fantastically helpful reply. I very much appreciate your invite into this. I have decided to continue self managing my property now but thank you and I would imagine your advice here will help a lot of others too. Many thanks!
I see little difference here from what Ben Rogers was offering. He went bust owing £1.9 million. The "guarantee" can not possibly be worth the paper it is written on. Faced with five empty rooms in a five bed HMO, is the guarantor really going to pay the mortgage and other bills and pay you your cut? What is it that makes them so bl**dy special that they can do a better job of filling rooms than you can do yourself? Will they give a damn about what sort of people they put into the house? All they will be interested in will be filling the rooms at any cost.What is your mortgage company's attitude to you entering into another contract? In your mind you may well be absolving yourself of the responsibility of paying the bills and the mortgage. I doubt your lender or your insurance company will feel the same way. If your local council is anything like mine, they want to know the credentials of the person managing the HMO and their track record.If I remember correctly you have to put that on the HMO application form. Will they really give you the house back in pristine condition in five years time? What possible incentive will they have to spend money when they are on the way out of the deal? Do you really think this person is going to hang around if things turn sour?
The first thing you will know about any problems is when you start getting letters from the bank or the council or the water company.
I can always tell when a guru has run a weekend course for this type of activity. I get about five letters per HMO from wannabe management companies, and as Vanessa has identified, they have a business card and little else to offer. If you want someone else to manage your HMO employ a proper letting agent who you can drag into court if they screw it up.