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  • Buy-to-Let

    Landlords as "corner shops" vs. big players?

    "If you own good houses on a good street bought for a good price there's no way you can be beaten, unless Govt. literally take those houses off us!"

    I'm sure I heard JC mention policies along those lines...

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    There's LL's on here that service the tenant spectrum from the very top to the very bottom, and everywhere in between.

    Quite who would decide what is the level required is another matter. I see LL's on here not providing white goods or furniture because at their price point it's pretty much expected, all the way up to serviced accommodation that includes bedding!

    Who would decide on the requirements there?

    I think a lot of us like the fact we can make of the properties what we want and not be dictated to by some third party, other than the requirements of the tenant.

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    I'm not convinced the analogy holds.

    Tesco et al outcompete Corner Shops on price; all the indications are that Build-to-Letters just can't compete because of their massive overheads. And that they cannot address the core market for exactly the same reason.

    If you look at L&G in Bristol, their rents on the Build to Rent setup are £1150 for a 1 bed flat, with a staff member on site, a gym, furnished and a couple of bits and pieces. That rent is 25-35% above market for the PRS, and according to the Shelter '35% of after tax salary' criteria, requires a salary of about 55k to be affordable.

    That limits them to the top 7-8% of income distribution. Hardly a revolution. The West End Model won't work nationwide outside cherry-picked bubbles.

    Unis made a similar misstep when they created gold-plated Halls for students. In one Uni known to me they were offering up to £700 a year cashback for years just to get people in. Meanwhile the Uni had given back about 400 rooms in long term leased purpose-built houses where they had shafted students for years, and they all got massively upgraded, put back on the market at 20% less than the previous rent for the non-upgraded property, and we all mainly have signed up cream-of-the-crop tenants before the previous Christmas now.

    I do not think that L&G will be coming for our portfolios; they can't make it pay any more than they could make it pay when Sir Guy of Gosbourne decided to apply a pole-axe to the PRS. This is perhaps why their Social Rent programme seems to be limited to providing finance iirc.

    I do not think Councils can make it fly either - perhaps someone has the historical numbers but I seem to recall them in the 90s and 00s selling off loadsa properties to the PRS because they were unviable for restoration. Then they went for the PRS to bring them up to scratch, which we have done with several million properties. Social rent houses are in receipt of continuous subsidy just to keep them Decent.

    There is value in coordinating purchases etc anyway, maybe - but it needs someone to create a business model.

    I am more attracted by the Sport Pursuit technique, I think. Flash sales of branded goods at 30-70% off on a private website.

    If Corbyn gets in all bets are off - he's buffoon enough to try and steal the whole lot, or perhaps he'll start taxing his multimillionaire colleagues. What happened to the £50m Communist Andrew Murray's family made by selling that Picasso?

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    One big difference between Retail and Rental Property.

    All customers care about is two things: Product and Price.

    If there's a house, of the right standard of internal condition, in the right location, at the right rent, tenants will rent it. They don't care whether it's owned by Dyslexic Landlord or Grainger, all they see is product and price.

    Whereas with Retail, the supermarket are far superior than a local corner shop. If I'm out in Central London and I want a £2 ham sandwich, I'll look out for a Tesco or Sainsburys logo, because I know what I'm getting. The corner shops typically have a similar sandwich at a more expensive price and disgusting food hygiene, so I look for the logo.

    With rental property, there is no logo.

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    I agree Tenants don't look at the name, they look at the property.

    Once a Tenant is renting the house, it's the service the landlord provides is the important part

    Good service is key

    Respond straightway for a repair and arrangements for the repair to be done ASAP

    I hope my Tenants /Customers stay with me because of good service and a fair price

    "People buy people" and this is the major difference I see between the corner shop and a supermarket

    I take time out to see my customers just for a natter and a cuppa. I even cut some lawns if they can't manage the task

    It's a bit like a Shepherd looking after a flock ... Just be there and look after your sheep.

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Hi Dave,

    There are two companies that are doing kinda what you are suggesting ... The Happy Tenant Co. and No White Walls.

    The HTC use their bulk buying power to source discounted fees and prices from suppliers for their landlords.

    No White Walls is an over-arching brand for high end HMOs - creating a network that tenants can move within, knowing that they will get the same standard of accommodation in any NWW HMO in the country.  There is also a community of tenants and landlords all working together for the greater good.



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    Some great ideas, resonate a lot with me, thank you Dave!

    Funny, with my background in business development, retail development and franchising, I can see straight away where you are coming from, and this is exactly the idea we've taken as a backbone for developing No White Walls.

    Our goal is to unite landlords and/or specialist HMO management companies via technology, combined marketing effort and the brand, thus helping them to deliver a consistent quality of service and tenant experience.

    While combined purchasing power (as in the buying groups model) is potentially a thing to play), I strongly believe that the economies of strong consistent brand marketing and tech-enabled service are the key.

    We operate only within HMO arena, and while the big guys like The Collective or WeLive will obviously have their market share, they cannot fully replace the 'corner shops' of private landlords.

    And equipping those corner shops with the power of combined brand marketing force and technology they would otherwise not develop on their own is our way of getting to the 'Spars', or as we call it in the team, "The Hilton of House-shares".

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    Maybe a closer analogy is pubs ?

    We're the landlords - the mortgage companies are the brewers...

    ...big pubcos get economies of scale and financing

    ....but the ultimate factors pushing the small landlords out of pubs are regulatory and taxation.


    MEES when it gets to D & C could be the same for us considering our average stock age.


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    DISCLAIMER just my personal opinion - for legal advice consult a qualified professional grown-up.


    The big commercial operators will never be able to compete with smaller “professional” landlords. By which i mean a landlord for whom their portfolio is there main interest on which they expend time and energy. Their property will be pretty much local to them , they’ll understand the area , their customers, local services and trends.

    Being pretty much sole traders or small companies their overheads will be far lower than a corporate, no accounts, human resources, legal, etc etc. They will be very hands on , have good relationships with their tenants and trades. The size tthey grow to will depend pretty much on the amount they wish to earn and the time they want to put in. There’s no reason why a husband/wife team could not effectively manage 50 plus properties , do it well keeping tenants happy and turnover low there’s a good living to be made and one that the corporates can’t compete with.

    Such an approach will most likely target specific markets in the landlords area, be it renting at around LHA rents, young workers looking for their first taste of independent living, professionals on work placements, HMO’s as either for some of societies less fortunate or the more mobile looking for effectively serviced apartments.

    Such landlords will not be competing with supermarkets , they’ll be offering a product to niches within their area akin to the small convenience stores , specialist suppliers , record shops, independent clothes shops , etc. All able to survive ona small percentage of the PRS market as a whole.

    Yes a more hands off investment oriented approach may well work but that will very much depend on capital growth to make it work in the long term.

    For me, I’ve no debts i don’t have the capital to cover, my flats were (bar 1) built or converted by me, i do all my maintenance excepting ( gas and major electric) , my tenants know that it’ll be me that answers the phone or email, that i will be the one that urns up to do the work or will accompany who ever does. I don’t need or want to earn a fortune and so can keep rents reasonable for existing tenants, my average tenancy runs at around 5/6 years at present, theoretically i could raise rents by around 10% acrossmthe board and my tenants would struggle to find an equivalent property/service , but i choose not to.

    Without doubt there are clouds on the horizon, there will be on going efforts to push ever more landlords out of the market and increase our workload, national registration , accreditation, indemnity insurances, taxation, legislation are all going to bought to bear on us eventually. However there will always be substantial numbers who’ll not be able to afford the rents of the big landlords, won’t be eligible for what will always be an insufficient supply of social housing, won’t be able to afford (or want ) to buy.

    The social sector has become a basket case of inefficiency , waste , too much outsourcing , lack of scrutiny / oversight, weighed down by costs of community sustainment/ crisis teams/ welfare officers effectively becoming an extension of many other services than housing provision. They can’t afford it ontraditional social rents , evidenced by the rise of the amount of supported and serviced housing they tend to now build and run.

    The industry will change, thats a given, it may notmsuit some , they will exit, but there will be a place for those that become landlords first and foremost.

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