The Key in Property Is Management
In my opinion…too many forget about the key element of property success, Management. I feel too many chase high yields in areas in which management is rather complicated to say nicely. I have seen this in the USA as well as in the UK. Honestly it is interesting to try to get 20% on your money….however at what price? What about managing your builders.
We have met with investors from the Far East that think they can manage a refurbishment from there. All we told them were all the daily adventures we seem to have on a constant basis.
I have a first hand example of an investor from Saudi Arabia we sold numerous Social Housing HMOs which yielded 9% The social housing HMOs have 5 year contracts…with no management needed. Initially he was very pleased and then he fell into the hands of a dodgy property sourcer from Liverpool who enticed him with high yields in some rather tough areas of Liverpool with LHA HMOs. Long story short, he went from estate agent to estate agent….problems after problems…void after void…non payment after non payment. Maintenance became a nightmare for him. Especially he was 9 plus hours away in Jeddah. Bottom line, nightmare!
Have another investor from India who initially did a 5 bed Professional HMO in Warrington with us. This is a great property near by to a hospital. The estate agent is well known with a good reputation. He entered the property into a corporate let. Property is stabilized and cash flowing. A true turnkey deal.
I had a conversation the other day with the same investor from India about investing in Wales due to higher yields. Firstly, I told him I am not an expert however spoke to my colleagues whom I feel have much greater knowledge of the area than myself. In my opinion….I told him …Regardless of higher yields or even lesser yields he would need honest builders and management in place. I expressed he might find that there however there are deals to be had in Manchester and he has the infrastructure already & better to focus on one specific area.
Tomorrow we have an investor coming in from United Arab Emirates who wants to view our properties. He wants to see New builds ( as so many non UK investors like)….Professional HMOs as well as Social housing HMOs. We have already spoken with him regarding management as well as our personal opinion about new build city center projects in Manchester.
There are many ways to make money in property….however one of the keys in making money in property is to make sure both your building works and rental management is addressed as as pose to chasing yields.
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