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I bought a property last year for the purposes of it being a long-term investment. I had the property basically completely gutted out, renovated via builders and then I dealt with the tenancy process myself via Gumtree. I have to admit that I totally loved the whole process from the first viewing of the property with the estate agent to signing of the AST agreement with my first set of tenants. I can't say that the whole process of it was 'stress free', but you just have to accept it as part of the package. End of the day, if the end result is a positive - then you just see the stress part of the journey as something that made the success taste even sweeter!
Due to the fact that I had to put all of my funds into my first BTL, I then decided to venture towards other 'creative' ways for investing into property to increase my capital pot. I know that many people will argue that this is not 'investing', but I was 'swayed' out of my comfort zone and pushed into the direction of R2R (HMO's) and lease options. Essentially, no money down deals as it was described to me...but I have decided that this did not suit me. I am more than aware that many people make money / profit from this type of venture and there is nothing wrong with that, but for many reasons this wasn't for me. This was only ever going to be a short-term goal for me until I had enough funds, but luckily I pulled out sooner rather that later.
I have decided that my new 'side business' is to get into management for other landlords, as I mentioned above it was 'hard work', but at the same time challenging, rewarding and achievable for me. I have got a company formation created via an accountant on Company House and reserved a domain name. I will be shortly be designing a logo and get cards printed, once the logo has been agreed upon. I am currently a member of NLA and will be completing the online accreditation scheme, for personal reasons and to show prospective customers / clients / tenants that I am taking this seriously.
Is there any advice that you can give somebody who is a family man, has a full time job - on how to set up a management business and get it up and running?
Bearing in mind, the recent financial and confidence set back I have had in pursuing the HMO / R2R business, but is a business model I could have still made a profit from and spent a long time researching that venture. Even though, many estate agents control this market, I believe that there is still an opportunity to make a successful business from this venture. I just want to point out that this is not a business that I require a salary from, I will be placing any profit made back into the 'capital pot', so that I can use it to finance my 'flipping business' or for the next venture.
Any advice as to where I should begin and how I can attract that first deal?
Year 1 into my property journey
Well done welcome to the Mad House ??
I have been Landlord for over 30 years and I self manage and I do have managed property via a Agent
Another Landlord I know has set up his own agency and he has worked at it for over 5 years and he is leaving
The main reason is the Landlords he works with Basically they don't want to do repairs ect and as the Agent he is the one who gets the grief
I think he manages over 100 properties and he is sick and basically he wants his life back he never gets a moment to himself
I personally have been asked why not become an agent and my reasons are very simmer for not doing it is because of the above
You need a great deal ok knowledge to be an agent and If I was to go down that route I would Take ARLA Exams and do it at a high level
Now there is also a possible problem Agents may well be excluded from taking fees and this could have a great impact in you plans
So far you have had a very good experience being a Landlord and you will have problems as we all do the bigger you become the more probs you will have
You should allow yourself a little time and learn a lot more about agency maybe take a Part Time job in an Agency and see what's involved
Take it from me its not a bed of roses But if its for you that's fine but to be a managing agent takes knowledge and time and maybe a lot of time
Best of luck
Learn Change and Adapt ?????
Hey, thanks for the reply.
Just to make it clear, I will still be working in my 9-5 job.
This is a business I wish to set up not like a letting agency or have an office / shop, but manage a small amount of properties for others. I'm not sure how many I would be able to manage, but I think 10 could be realistic. This doesn't need to be a big business venture, just another way of achieving another income.
Not sure where to get started?
i have many friends who have investment properties, but not sure if I want to get started that way. It may be better to approach friends, when I have a few properties under my belt.
If I was setting out as I have said try to get some experience in a Estate Agent
I know if you were offering me your services I would panic a little saying you have another Job
There are times in management when you may have to leave your Job for an emergency in the Managed property ect
I don't think this is a part time sort of role ????
Look at the ARLA web page and maybe visit a member out of your area for an opinion
With the greatest respect to you ? Your very young in knowledge only owning one property so you will have to learn a great deal more before you offer your services and a Management Agent
Personally I don't think you could be entering the Management Business at a worsted time lots of bad feeling against agents and a great deal of change in front of you
Its not as easy as it looks believe me and Landlords will be depending on you for there rent on time and doing a good job and they would expect you to be up to date with all regs
its a huge responsibility thank very very hard indeed but If you do it best of luck
Thanks for your reply once again and I do take on board your observations, I appreciate this wont be easy and I certainly won't rush into this, if I am not ready to do this properly.
Lack of experience noted, I can't argue that point - but I have to start somewhere. I do intend to try and keep up to date on the reg's, that is crucial for me whether or not I pursue the management route for others.
The role for me would be part-time, but there would be other staff to make this a company. Difficult to explain without more detail, but this wouldn't a one person company...Although, I decided to not pursue the R2R business, there is so much I learnt about the set up and running of a business in general and specifically to a property business.
Experience can only come with buying more properties, which I am not in a financial position to do so unfortunately. Also, no matter how much research / reading I do - it will never compensate for actual real experience. I researched for years about BTL's whilst I was saving up my funds, but nothing could ever prepare me for the process that I actually went through - although the preparation work certainly helped and gaining advice from PT members as well was very helpful.
Maybe I could start off with 'tenant finding' services for other landlords, who some pay a lot of money to agencies for this service. Agencies still charge a fee based on the percentage of your monthly rental income, which for many landlords is usually 3 weeks rent - for one of my friends recently it cost him £750 and he had to change tenants only after 4 months.
I recall a few members last year telling me to not buy the BTL and wait, as I had no experience and to not manage the property on my own, as I would get 'eaten by the sharks'. Although, in theory I could not argue with their points and say that it wouldn't happen - if I had waited to buy my BTL, I wouldn't be able to financially even afford it now, as it has now increased by about £60k (estate agent valuation not surveyor valuation). Also, if I had decided to not manage the property as advised last year, I would have zero experience in management and probably have shelled out about £2k in fees.
* Experience in an estate agency - considering possibly a weekend / Sunday role in a lettings agency
* ARLA route - will research how to get accredited with this, once I gain my landlord accreditation via NLA
Any other advice would be greatly appreciated...
It may be worth you reading this
You have joined us at what I call the Last of the Golden days of Land lording 1996 to 2017
We are moving into a changing Sean of property investment
If the Govt leaves us alone we have a future? If they don't and the attack continues on the PRS the market will shrink and change and not for the better
Its all down to politics now ??
You are lucky in one sence your not large enough possibly to avoid the issues of Currant Taxation
But None of us know the next thing the Govt will do
Private Landlords and not liked by the Govt and in point of fact they don't want us
The Govt want to see large players enter the market Landlords who do not need to Borrow ??
Normally I always see a silver lining in any change but at present I can see much good in the future
Lots of Landlords are depending on Capital Growth and Rent Increases
My own feeling is we are going to see stagnation in both
we are at the dawn of the new tax rules and a great number of landlords don't understand what is in front of them
I have used the Battle of Dunkirk in the past and I stick with that view the Phoney War is over and Landlords are moving back to the beaches
Do we get rescued to fight another day ?
or do we become prisoners of a Tory Party with no sense
Some of us have jumped on the Ltd Co route as a way of leaving the Beaches but we could be on a boat that could also sink
None of us know for sure but the fight for survival for a great number of landlords is on NOW
Thanks for the link to the article - interesting read.
I hear what your saying - the Tories have made this into a war on landlords ans using 'us' as scapegoats for the property / planning crisis. There is money still to be made via the property route, but just harder now and not as much profit there once was. However, I have noticed this in the industry that I work in (my 9-5 job) and other industries that my friends are a part of...hardly anybody is making the same kind of money they were 5-10 years ago. Hopefully, this will now put of people voting for the Tories...but people are blinded by politics and will probably keep voting for the Conservative Party.
The days of people getting into property and owning / managing a large portfolio is harder to do or virtually impossible for some people, I will need to work out which route will be best for me. My main aim was to get into 'flipping' properties from the start, so I hope that I can build up enough funds in the next year to get this started. This has always been my passion and even if it remains a hobby, I would be content with this.
Development and flipping would be my chosen route I would leave Property Management well alone at this time
Hi. My advice is the same as I'd give to anyone contemplating starting a new business - do a business plan. This would include determining the need for your product or service and thoroughly researching the competition. For a tenant find service, your competition would not only be high street estate agents, but also online services such as Purple Bricks, Open Rent, UPad, Tenant Find etc etc.
Determine what licensing and accreditation you'd need, and what qualifications, skills and experience that would require. Insurance, including professional liability, and the professional background you'd need to obtain that. Advertising, staff costs (sourcing, training, accrediting, wages and wage on costs). Operating costs, phones, computers, utilities, internet, software packages. Tax implications. Current and future legislation, including the government announcement that charging tenants and landlords fees for some services will become illegal.
Business risks, threats, opportunities. Projected profit/loss.
Best of luck.
Wow - when you put it like that - there is a lot to take on board with this or any business.
All of the above noted.
How do you recommend I go about trying to get my first landlord on board...once all of the above is in place?
The consultation can be downloaded below, or click here to view it.
Proposals for a ban
As is already in force in Scotland, the Government are considering a blanket ban on all fees so that “no agent will be able to charge tenants any fees, premiums or charges that meet the general definition of facilitating the granting, renewal or continuance of a tenancy”.
The Government is also proposing to ban fees charged by landlords or other third parties to tenant. The main principle being: tenants should only be required to pay their rent and a refundable deposit.
Other avenues to reduce the financial burden on the tenant are also under consideration, such as introducing a cap on the deposit, enabling tenants to pay their deposit in instalments over the first few months of a tenancy, or using a line of credit approach where an agreed deposit amount is blocked on a tenant’s credit card.
The Government proposes that the ban should be enforced by local authorities, primarily Trading Standards. Possible penalties for non-compliance include a maximum fine of £5,000 in line with current transparency requirements, or a civil penalty of up to £30,000 as introduced in the Housing & Planning Act 2016 for other housing related offences (which came into force this week).
The Government believes that the introducing a clear ban on all fees is the preferred option. However, it notes there are certain costs that should be met by the tenant:
The Chancellor made clear that the Government will be banning letting fees – this consultation is just exploring how they will achieve that aim. While the NLA may not view it as the most effective way forward, we will of course work constructively to ensure that whatever changes are imposed on the sector are as fair and undamaging to landlords as possible. One compromise could be that letting fees are banned, except for certain ones such as credit and reference check fees.
We will be responding to the consultation in due course. Individual landlords should also respond to the consultation, especially Part C which seeks some more details of landlords’ businesses.