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  • Buy-to-Let

    Landlords as "corner shops" vs. big players?



    In a recent post where the head of Grainger plc said we should all sell up and buy her shares, the discussion amongst us moved around to suggesting that she was like "Mr Tesco" suggesting all corner shops should sell up and invest in the supermarket.

    Unsurprisingly there was a "we can do it better" attitude and that the big "supermarkets" aren't the only "shopping" experience. However, it has to be said that the big supermarkets hold sway and command better margins (even now with Amazon etc they still do) but renting property as people's homes is different.

    Taking that corner shop analogy further.......there are great successful examples of small independent shops who have banded together under a brand name to become (or remain) a serious independent alternative to supermarkets. See - Inter Sport, Spar, Londis, Happy Shopper - all are branded but independently owned. There are of course breweries with huge estates, and petrol stations branded to BP etc but these are different as they have supplies from one large manufacturer.

    Is there some way that we can become a version of "Inter Sport", "Happy shopper", "Londis" or "Spar"? to provide the high standard, decent margin alternative to "Tesco" etc?

    If this has been done already and works, then please don't read on, just tell me who and what it is.

    but......

    There are retail buying groups with tiered structures. There are landlord buying groups who already have some infrastructure and I wonder if there is more that could be done to take that model further. So one thing, for example, a landlord joining the "Spar" group has his or her properties annually audited to a "group standard" performed by two other nearby landlords as a peer review. Thus it would be available, universally accepted as a good standard and cost free. That would, for a decent sized group become the "industry standard" and thereby raise quality and rents potentially.

    Additionally this self regulation would be a positive thing as it could become a player in a larger market, attract discounts and add margins for its members. Local agents would find these landlords and offer their properties at a small premium perhaps? The nature of belonging also may provide opportunities for further purchasing for those who wanted to expand or sell.

    We are by nature, independent souls and this might not be a good idea but if we are to thrive (not just survive) maybe some sort of affiliation may not be an altogether unhelpful thing.

    To say we then speak for people across the UK with total property numbers of xxxx and tenants of yyyy across the rental spectrum would be very powerful.

    Any thoughts?? If its a poor idea, fine but please don't be too unkind in your comments.

    If its a good idea then please tell me how you might add value to it.

    Thanks for reading.   All the best

    Dave

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    Im not sure landlords have the same "Economies of Scale" benefit that a Corner Shop would do by joining a buying group.

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    I don’t think the end users, the tenants, would care who was supplying their accommodation. as long as it fitted their needs for facilities, location and price.

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    Landlords can establish a nationally recognised trade body as other industries do. The trade body will engage with the regulators and other authorities on behalf of landlords.

    The trade body will also establish guidelines and good practices and landlords will follow. Landlords will be members of the trade body.

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    There are numerous landlord trade bodies already - the RLA, NLA, iHowz, to name but a few ...

    Property Tribes is partnered with the RLA and our members enjoy 25% discount off membership.

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    Thank you Vanessa.  I didn’t ‘t know that.

    The trade bodies will have to start pulling their weight since landlords are being fired at from every angle. It seems there is no voice for landlords with all the numerous changes.

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    The trade bodies do good work and do pull their weight ... but as only about 60K landlords (out of 2.5million landlords) are members, then their weight is not as great as it might be.

    Trade bodies are important for landlords at a political level, and there is obvious strength in numbers, but due to lack of membership, their job is much more challenging.

    At Property Tribes we encourage every landlord to join at least ONE landlord association, maybe even two, as they are different "flavours".  The more landlords who join, the greater our voice and the more influence the trade bodies will have.

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    Can you name one thing in the recent years these trade bodies have done for landlords? It's wild out there for landlords and they don't seem to have any affect in the changing landscape.

    I have never been part of a landlord association and don't intend to. I have looked into it a few times but they don't fill me with much confidence.


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    Thanks Adam and everyone else

    My thoughts weren't really around buying groups - these already exist and work to a greater or lesser extent - nor around representative groups such as a Real estate association (RLA etc) as they seem to have limited membership benefits and are just a pro forma lobbying group. These are a little narrow in scope and too detached from a meaningful involvement as such don't appear to work effectively.

    The economies of scale are not from the buying of stuff (see above) but from having a notion of benefit of value to tenants who would use this type of landlord where he or she has shown as part of a larger group the willingness to invest in a decent property and act in a professional manner. Its a recognition of that in the tenants mind (promoted to them via a recognition from estate agents or whoever lets your properties)

    Currently no one has a benefit from doing the RLA affiliate course or anything similar nor do their tenants care. Neither do tenants care if we have cost savings by being a a group of buyers. What they do care about is comfort or certainty around quality of both property, agent (if any) and the way they'll be treated by their landlord.

    If there is a national and recognised standard of quality then they would know its standing, would benefit from the security of it and maybe pay a little accordingly?

    No one will do this for us and larger businesses are happy to let us be a "nation of shopkeepers" as Napoleon once said. So my idea was to try and help us help ourselves.


    Dave

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    I agree. The trade bodies can increase their scope. They can establish guidelines or good practices and audit landlords.

     Landlords who achieve certain standards for each property they own can have some form of recognition badge. When such landlords advertise with their recognition badges then tenants are assured of the quality of property they are renting and the quality of service they will receive whilst renting. Alibaba do a similar thing though it is not a trade body.




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    The good thing about us vs. The big boys is they can't buy our properties in established areas if we still own them!

    It's not like the buying power say Tescos have negotiating with Walkers crisps for 1m packets of salt n vinegar (we all know that's the best flavour!) compared with the local corner shop only buying a few boxes at a time.

    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!

    Not everyone wants shiny new boxes, and we haven't got to the stage yet where those shiny box builders have to refurb a high percentage of them - that will be an interesting time for their monthly income.

    They are also not free from Govt meddling, and building new build properties has much more red tape to get through than buying existing stock.

    Keep calm and carry on people!

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