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Always stay in your preferred area

When building your HMO portfolio, HMO management company or even your R2R portfolio, all property gurus always say that location is the most important criteria, and I can’t emphasise enough how true it really is.

You can pretty much change anything within the property (as long as you do it in line with planning permissions), however you can never change the location of your property. Well, unless you buy an HMO on wheels 🙂

Photo by Janis Oppliger

I would even say that sticking to your preferred postcode is the number one best thing you can do. If it’s E16 area, stick to E16 as much as you can. Ideally, acquire all properties in E16. If it’s NW6 area, then stick to NW6 as much as you can. Having each property within 5 – 15 min walk from each other is going to save you lots and lots of money in future.
You might grow your portfolio a bit slower as you will have to say no to some properties outside your area, but in the long run this will save your business.

Here are a few reasons why sticking to one area (15 min walking distance) is the best thing for your business: 

1. Whenever you will have rooms available for rent, you will be able to show them all to every lead at the same time.
Potential tenants are always open to seeing multiple options if it’s within 5-15 min walking distance. This will help you rent your rooms much faster and will save you lots and lots of money in room marketing costs.

Photo by Bruno Martins

2. Maintenance issues resolved quicker and more effectively, leading to great customer experience for your tenants.

If you a have a broken toilet seat in one property, no boiler pressure in another, dripping tap and broken kitchen cupboard hinges in another, then all this could be easily resolved in one day by one trusted engineer. Your engineer invoices will be much lower.

3. It will be easier and faster to build a trusted power team of engineers and trades people for all necessary departments – plumbing, carpentry, electrics etc. And it will naturally lead to creating sustainable, trustworthy, long term work relationships with these contacts. 
However make sure to always do your quality control as it’s just natural for one engineer to get too comfortable with the same client, and the quality of work might go down with time if no quality checks are implemented.

Photo by ThisisEngineering RAEng

4. You will get known in this particular area as a great landlord and will naturally attract more tenants and new properties. As long as you provide great quality accommodation, great customer experience, and as long as all your HMO properties are in line with the latest regulations, then soon enough you will get noticed in your community and even by your local council.

5. All these small details will add up quickly, and in the long term you will save lots and lots (and lots!!) of money comparing to if your properties were spread out across large areas of town. If you have a 20 property portfolio, just property inspection visits alone will save you a lot of money if you stick to one area.

6. You will save time. Lots of your valuable time.

Photo by Aron Visuals

Trust me from my mistakes – just one or two properties a bit outside your main focus area will cause you such a headache. It will need a different plumber, different boiler engineer, different handyman… And every time you need to visit the property yourself for any reason, you will try to delay it, things will start accumulating and your service quality will be greatly affected.

Photo by Alev Takil

So stay within your area as much as you can and don’t be tempted to take on that one large 15 bedroom property on the completely opposite side of London. 

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Where are you going?

Have you ever left your home without deciding on where you are going?

Photo by vikram sundaramoorthy

It might sound like a silly question, but it’s actually a really important one. I truly believe that this approach applies to pretty much anything we do in life.

  • Have you ever started something without having a vision on how you would like the end result to look?
  •  Would you ever decide on writing a book without first identifying a particular vision for it or kind of message you want to convey to your readers?
  • Would you ever plan your week without first identifying you main goals or what would you like to accomplish, such as a new business idea?

Same approach should apply to your HMO management strategy.

How would you like your HMO business to look like in a few months or a few years time?

When you have your long term vision in mind it’s much easier to make every day decisions, even the big important ones.

Photo by Estée Janssens

I would like to share an example from my experience and the time I didn’t consider my long term goal in a decision making process. (This is why it’s important to always write down your long term goals and overall vision for yourself or the business and read through to yourself every single day).

When we started our HMO management business, we decided on a 6 month AST agreements for our tenants, same as the majority of other people that I know.

When a tenancy expires, it automatically becomes a monthly rolling agreement.

We decided to keep the tenancy agreements monthly rolling and not implement the work flow in renewing the tenancy agreements every 6 to 12 months as it was less hassle and when circumstances change we can serve S21 notice much easier. However as I begun to manage more than 100 tenancies, I have realized that this was not the best long term decision for us. This meant that our tenants can give their 6 week notice any time and this in turn means that it’s much harder to predict and plan your lettings workflow.  

Photo by krakenimages

However with renewing tenancy agreements every 6 – 12 months you can predict the times of the year when there could be an increase in tenants moving out and times of the year when you might have no one moving at all.

We have started implementing the tenancy agreement renewal process only once we had reached more than 100 active tenancies.  Currently it’s much more complicated and slower process as it could have been at the very beginning.

Therefore my advice is, whenever you make any decisions, either big or small, remind yourself of where are you going and making a correct decision will become much easier.

Photo by Toa Heftiba

Have a great journey.

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Things I would do differently

As 2020 is approaching the end, it’s quite natural that we reflect back on it.

I have seen many people posting publicly about all of the things that they feel most grateful for in 2020, and I think it’s wonderful as I believe that gratitude is very powerful, especially when practiced on daily basis.

Photo by the blowup

However, I have decided to share my failures instead, in hope that it helps some of you in avoiding the same mistakes. I have certainly learned a lot from them. I believe that the ability to identify your mistakes is just as important as celebrating your triumphs and practising gratitude.

If I could re-live this year again…

Number 1.

I would trust my gut feeling so much more and make better decisions.

This year we were working on a new project where we took on 35 new properties in East London. It felt like a dream come through, this would accomplish our whole goal of 2020 in just the first half of the year and enable us to grow towards our investing goals much more rapidly.

During the whole negotiation process there were many signs and occasions where I had a gut feeling that this might not be the right fit for us, as our values and the values of this new landlord are completely different. However the excitement was much greater than the caution

We have returned 12 properties over the last 2 years back to the landlords just because of the significant difference in our values.

We want to provide a high quality accommodation, maintained properties that are always in line with all latest HMO regulations and treat all our tenants with respect and honour as we expect the same back, however unfortunately not all of the landlords have the same goals and missing the signs for this was a very big mistake.

We decided to start gradually and offer our tenant finding service only and I am so glad we did it this way, as very quickly it showed how different our values, levels of honesty and how differently we treat our tenants and the quality level of our properties.

We decided to end the partnership.

Photo by William Farlow

Yes, we lost significant amount of funds and time, but this really was one of the biggest reminders to always go with your gut feeling.

Number 2.

If I could re- live this year again (not that I really want to) I would be more focused on my goals and make small steps towards them every day.

Photo by Alex Wigan

As we worked on the big 35 property deal, we kind of let our daily/weekly marketing for new properties slip by and it was the worst thing I could have done. I now remind myself, even the smallest action towards growth every day is still growth.

Number 3.

I would make beautiful 3D tours of all our properties straight away after we heard something about this thing called COVID – 19.

Yes, 3D tours really help in renting the properties sooner and find great tenants much quicker. It’s not very straight forward to do a 3D tour at properties where one or two rooms are vacant, but with some extra care, it’s doable.

Number 4.

I would invest my time in talking a bit more to all of our tenants who gave their notice to move, so that I could understand their decision a bit better and see how we could help them with their situation and hopefully avoid having any vacant rooms. This was of course not always possible due to loss of jobs.

Photo by Joshua Ness

Number 5.

I would review the business financial summary more often. With issues that COVID-19 brought some things slipped by unnoticed and only could be visible when the problem had grown much bigger and the loss of funds has become much more noticeable. Now we don’t let little things slip by and allow them to grow into big things.

Number 6.

Photo by Mohau Mannathoko

During the summer, I would spend more time outdoors with my team. Unfortunately this year didn’t allow us to meet up as often as in previous ones and I really hope that we can all catch up soon.

May 2021 bring us new hopes, new dreams to chase and lets us reach the levels of growth that we may have not been able to achieve in 2020!

Photo by Frantisek Duris

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Staying open minded during challenging times

Let’s be honest, the current situation with Covid – 19 has affected the property industry in a many different ways.
The property sales been booming due to short term tax reliefs.

It is what has saved many of the estate agencies during these challenging times.

The lettings and management situation is very different however.

Especially the HMO industry in London.

The way people are working has changed forever. Some people have decided to continue working from home some people have preferred to return to office, however there is a great number of people who decided that working from home is much more convenient and in most cases you can achieve much more if you have a dedicated working space and not much distraction s from co workers.

As the location is no longer a vital criteria for many people, we have experience our central London rooms to be very difficult to let. Many people have decided to move to bigger accommodation or even their own one bedroom property for similar price as a room in shared property in Central London.

During the times of change its vital to adopt to change. To know your numbers and make decisions quickly.

If an empty room costs you ÂŁ40 a day, reducing the rent for ÂŁ100 will save you from bigger long term loss.

We had a situation where landlord refused to reduce a rent for a room. The room was vacant for more than 3 month. On 4th month landlord agreed to reduce the rent and room was rented straight away. If decision would been made sooner, this would have saved ÂŁ2.5 k loss in rents and marketing and viewing costs during the 4 month period.
Be flexible.

There are many ways you can work around the current situation and it does require extra work and extra effort. Many or our team members including myself work late nights to get all rooms rented for our landlords, but you got to keep going.

Contact your previous tenants if they would like to rent any of the rooms for a special offer. Communicate with your tenants who decided to move out, if they would reconsider it for a rental reduction and maybe a special offer, free room cleaning once a month for example.

Stay alert on social media relocation groups, local universities, hospitals, relocation companies abroad. Everything could help.

And if you have vacant rooms and not extra time to invest to rent them, considering a help from agency might be a good solution to avoid long term financial loss.

Staying open minded and focused on solutions is best we all can do to help the lettings industry rise and shine again in London.

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Compliance – Compliance Compliance

Just a few days ago I was reading a very detailed survey that stated that one of biggest landlord worries is compliance; it was second after the COVID- 19 effects on rental industry, and I really understand where this worry is coming from.The safety of our tenants is extremely important and the government fines for noncompliance are very generous.

For example, as per HMO regulations you have to display your name, contact details and your address at your HMO property, failure to do so can earn you a ÂŁ1000 fine from your local council. You also have to provide appropriate waste facilities, this includes a recycling waste bin in kitchen and clearly displayed instructions on waste management, and once again, failure to comply will result in a ÂŁ1000 fine.

One of the most hefty fines that council can apply is a failure to maintain common parts and fixtures, fittings and appliances which can result in a fine of up to ÂŁ19 000.

A simple and unintentional error could cost landlords a lot of money.

So here are a few tips from us that will help landlords ensure that their properties are in line with all of the latest regulations:

1. Read and familiarize yourself with the HMO license conditions of your property at least once every 3 months, make sure you have not missed anything and remind yourself of your obligations.

2. Carry out a full property inspection every 3 – 4 months ensuring you include the following most often missed out on questions:

  • Are all the certificates and HMO license displayed?
  • Is the tenant handbook in its place and is up to date?
  • Are the fire alarm test sheets in its place?
  • Are all fire alarms working and regularly tested?
  • Are CO2 alarms present near the gas cooker and a heating boiler?
  • Is the waste management information clearly displayed?
  • Are fire exits clearly marked, safe and unobstructed?
  • Are all automatic door closers working properly?
  • Are there any signs of unauthorized overnight guests?
  • Are all appliances working?
  • Are all sockets working? (you can use small bedside lamp to test it)
  • Any signs of mould or damp?
  • Is the fuse board in proper order?

3. Read your councils HMO licensing website page once a month and subscribe to all updates. This would include:

  • Gas certificate
  • Fire safety certificate
  • Electrical Certificate
  • EPC
  • PAT

5. Keep strict records and order with all of your inspection files.

6. Test your fire alarms every week or every second week depending on type of alarms. (Grade A alarms with control panel should be tested one a week). Keep records of all the tests. Identify if you can film a video when testing alarms using an app that shows date and address. (The most ideal solution) If not, photos and description log with signature is acceptable as well.

These are just few things that could help you make sure your property is in line with all of the regulations and HMO license conditions and save you from future worries about any potential fines.

If you are still concerned or unsure if your property is fully compliant and you think you might not be doing everything that your HMO license conditions require, please contact us and we will be able to help you put things right as soon as possible.

With Gratitude, Ilva Pam

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BRICKS, WATER AND PEOPLE

Property business consists of two main components:

The property itself and the people to whom you are selling or renting it to, most often defined as your clients.Very often we hear the expression that property business is all about the people, well I would like to believe that it’s both, the property or the building itself, as well as the people living in it.

As property managers, we deal with both of these areas on daily basis and to make sure your business runs smoothly, you need to take care of both of these aspects – maintaining the building in a good order and cultivating productive relationships with your clients.

Now, what I mean by maintaining your clients in good order is something we could write lots and lots of books about, but mostly it’s about keeping the relationships in good order from both sides, ensuring there is a mutual understanding, respect and good attitude and this is not something that’s easily achieved, which is one of the main reasons why the rental properties should be managed by professionals who are also good at managing people.Good relationships with people in your business, including your clients will always be a great asset, but it’s not always that straight forward, especially when you try to create good relationships with your tenants.

My approach to this situation is ensuring my team and I listen and understand our tenants in an empathetic way without being too friendly as that can hinder relationship further along the way.

Usually everything is good with your landlord-tenant relationships until a problem or challenge arises. For example, the boiler breaks down during Christmas period. The tenant understandably will want it fixed as soon as possible. In most cases, so will the landlord and even the plumber, but where the problem may arise, is at the plumbing part supply stage.When a boiler needs some part to be replaced, for plumber to order or buy this part at the plumbing shop may be fairly challenging and could take some time, sometimes even as long as a week or more.

Now, this is where the landlords’ people skills should be utilized.

Landlord must communicate in the best way possible to the tenant and explain the situation, as from the tenants’ side, all that matters is for this issue to be resolved.If the situation is not properly communicated, they will simply assume that the landlord is careless and not interested in helping, therefore the respect and understanding will be wiped away very quickly.

Therefore, the best piece of advice that I could suggest to anyone in this business, is to keep your tenants informed, as often as possible in regards to any maintenance or tenancy issues. Over 13 years of working with many different people and 7 years of managing the tenants in particular, I have learnt a great deal, and have even created some easily adaptable phrases that work fantastically in resolving most of the issues that arise during the tenancy.

Please feel free to reach out for more information on my most effective conflict resolution tips and catch phrases to use with your tenants, ensuring that your communication style is clear and effective, but most importantly makes people feel understood and respected.

Due to my experience, I believe that having great people skills, learning about different ways of communication, being proactive and managing people with empathy is essential for the growth of your company as well as being a well respected member of this industry.

With Gratitude,
Ilva Pam

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Strive for constant improvement!

We hear this phrase many times over, especially in an entrepreneurial environment, but do we actually act on it?

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COVID-19 Reflections

Now days it seems that everyone has an opinion and advice on what everyone should or shouldn’t do whilst they re in the quarantine, so I thought I would share my thoughts on it.

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Mess and disorder

As a landlord and property manager, I am sure that at some point, all of you have had to deal with messy tenants.

Receiving tenant complaints about dirty dishes, oily cooking worktops, dirty bathrooms full of hair and many other issues is not fun at all, especially when you are paying the housekeeper who cleans the property every week or two for it to be messy again the next day.

This situation can make you feel frustrated and upset as you expect, as grown adults, renting a room in a shared house, they would be more responsible and courteous to their housemates and themselves.

But what do you do? And how do you solve this common problem?

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Let’s have some fun!

Management of HMO properties comes with endless lists and lists of serious responsibilities and regulations. The industry is so highly regulated that if anything goes wrong because of your error, you can end up in an imprisonment.

By nature I am a serious and collected person and running a serious business highlights this characteristic even more.