There’s only one winner and one loser in the property game – and that’s you.  Come what may, your fortune or losses depend on how YOU act NOW – not what John Smith down the road thinks about where the property market is going.  This month, we talk to Millennia Property about how many investors are going wrong – and where the next opportunities may be.

Who are Millennia Property?

We are a HMO-specialist management agency and property consultancy who provides beginning-to-end solutions to investors and business owners.  Providing bespoke coaching and education services through to sourcing and arranging finance for deals, Millennia Property has strategic partnerships in place so that we can cater for the full needs of any professional property investor.

Formed in late 2009 the directors; Matthew Moody, Mark Smith and Kenny Ranns have over 50 years senior level corporate experience within the IT, oil, travel and leisure sectors.  This coupled with their 25 years experience in the property market gives them a strategic corporate approach which few other experts possess.

What is the problem with the current market?

One of the main strengths (and thus correspondingly its main weakness) is that anybody can enter the property market, buy a property and start renting it out. Whilst this is great in that anybody can become a successful property investor, what we tend to find is a lot of people are not building a business, they are building a noose around their necks. Most of the investors we speak to have no business plan, no marketing plan, no sourcing plan, no systems nor structures and are unfocused on where they need to go next. We’ve talked about this in past mentor columns (see Matthew’s regular YPN Mentor column) but it is critical that anybody that wants to build a sustainable business in the property market puts in place processes and systems for the future.

Millennia Property works with individual investors to identify their strategy through a thorough analysis of their business and goals.  We then partner with investors to help build their business through our sourcing and educational solutions.

Our core USP is: Property + Systems + Cashflow  = A Property business.

Why are the current strategies not working

Most property investors we speak to have their head in the sand.  They are frightened by the media circus, the negativity found from professionals and are mixing with the wrong set of people. You need to change this today by accepting responsibility for your actions, brainstorming solutions to the issues you face and ensuring you have a reason for being in the property game. Its no longer enough to find a deal, send it on to your broker and expect them to find a great product at a low interest rate from a lender who is keen to lend to you. 

In todays market, you need to have access to the best and most experienced professionals who have survived the last recession and have the contacts to allow you to succeed through this one. Combined, our strategic partnerships bring 150 years of property experience to the table – if you need an expert, we’ll have one.  If you need finance, chances are if we can’t do it, nobody can.

What is the critical problem right now

Many people are still fixated by no money down schemes or offerings.  Whilst we don’t deny the viability of this strategy, we question its validity in a downwards market and whether this can form the basis of a sustainable portfolio in the long-term. The problem right now is you are still chasing a dream which hasn’t existed for nearly 18 months now and really, you need to wake up and smell the roses.

Yes, property is still an extremely good viable long-term investment but you need to be prepared to – dare we say it – leave some money in a deal – if the cashflow is strong enough and gives you a good cash-on-cash return. 

Its no longer enough to go chasing large cashbacks on houses that at best just about wash their faces and at worse, will leave you with a nasty cold for a long time.  The only thing that matters in any business is cashflow.

What are the core components for running a successful property business

Strong systems and processes linked with a strategic vision that gives you massive cashflow every month. Lets look at two different investor strategies and see which one you think will work in the long term:

Investor A has 30 houses around the country that he bought over the last 3 years.  He has a mixture of new-build and resale units with varying yields of 3%-7%.  His portfolio spans a radius of 300 miles and he rarely gets to visit all of his properties.  Instead, he has agents that fully manage them and averages occupancy of 85%.  His cashflow is negligible because even though his properties on paper yield good returns every month, the ground rents, service charges and outsourced maintenance drain away his cash.  He is hoping for long-term capital appreciation but already knows that in reality, it will be 5+ years before his properties are back to the same valuation prices he bought then at. 

Investor B has 10 houses in two towns local to her that she’s bought over the last 10 years.  She manages them all herself and has a handyman that works part-time for her maintaining the properties.  She owns 9 little terrace houses and 1 new apartment.  Her occupancy is in the high 90’s and her yields average 7% but her on-costs are lower as her properties are mainly freehold and maintenance is preventative rather than reactive.  She makes good cashflow each month and isn’t too bothered about capital appreciation as she is paying down two of the small houses every month on repayment mortgages.

Which investor would you rather be?

Investor A is 3 months away from going under; Investor B has a sound system in place with established processes that allow her to make good cashflow and occasionally treat herself.

Put in place the processes and systems to enable you to generate cashflow but not at the expense of adding cost to the business.

For example. Matthew has a marketing system for generating dozens of tenants leads per day that he couldn’t turn off even if he wanted to!

What strategies are you following today?

There are several that spring to mind.  Many people have talked about them before but the proof is always in the walking and not the talking.

Multi-Lets, HMO’s, Professional Houseshare etc

We’ve talked about this all day – many “experts” say they are hard work and a hassle; most of them have never managed or set foot in a HMO so they wouldn’t know.  If your HMO is full, then you can manage the property in less than 2 hours per week.  If you’re making say £150 per week per full house; complain all you like about hard work; nothing was ever delivered on a plate…

High-yield single let

There’s only one type of single let you should be aiming for – and that’s a high yielding 9%+ property.  Anything less and you are massively subject to the vagaries of the interest rates, unexpected maintenance charges and management fees.  Whether its rented through the LHA, private tenants or corporate lets, do your homework and go where the yields are.  Oh, and buy at least 5+ in an area so you can maximise economies of scale.

Commercial/Businesses

We are not talking about dead office space here – these are bona fide businesses operating in commercial territory.  Whether its hotels, bars, nightclubs, care homes or whatever; if it’s a business, its successful and generates good cashflow, there are methods of financing and buying to add to your asset base.

Finance

Nothing else matters but gaining finance to support your business.  We have made it our priority and key focus to get the building blocks in place to ensure that when others are falling by the wayside, we can continue buying.  Do you have access to instant refinance, refurbishment, asset financing, open bridging and open doors at many lenders that do not have a high street presence?  We do and you can get access through our website.

Overseas

We have seen massive drops in overseas asset pricing which makes them extremely attractive to purchase – and with similar commercial mortgages available, now is the time to get in and start generating cashflow.  With yields of 15-20% in some areas, provided you perform due diligence and buy in a concentrated area, this adds another diversity to your portfolio which will reap benefits in years to come.

What do you think the next 12 months hold?

We forecast that lending will become a more bespoke individual decision rather than the mass-market “the computer says no” approach taken by many of the high-street lenders today.  We have already seen encouraging signs of it with lenders who want to meet, greet and touch you and understand your business, your vision and help support your goals for the future.

We also believe that being part of the right community will become even more beneficial with the lines clearly drawn between the amateur investor and the professional investor.

Millennia Property is one such community where professional investors are invited to join with us and help us achieve your goals.  Our vision is to create 100 property millionaires by 2015 through our financial and educational services.

Register today to find out how we can help you make it in today’s property market

http://www.yourhmoexpert.com

The Channel 4 series “Mary Portas Secret Shopper”, investigating customer service provided on Britain’s high streets, last night set its focus on Estate Agents. The programme was predominantly based around the north London estate agent Martin Gerrard and using this agency to change the negative public perceptions of estate agents. Mary Portas during her time at Martin Gerrard’s implemented two changes to their operations. One such change was to overhaul their traditional property details and instead introduce more informative updated leaflets including suggestions such as “Things you will love” and “Things you should know” in replacement of so called flowery language. Whilst another change was to increase training each agent received to conduct more effective and informed viewings.

Reception of the programme has been mixed. Many in the industry have commented that the programme was highly biased and ignorant to the complexity of estate agents work. Others however, although recognising the simplicity of the programme, have argued that the suggestions made were useful to all agents in both the buying and rental sector. Gill Markham Head of Operations for Rentright.co.uk has commented that the suggestions Mary Portas made in regards to knowing the property you are selling inside out as highly important, “When you sell any product, you need to know the product inside and out. It is essential to spend time with the vendor – as it is their product you are selling. Unless you know everything you can about it, you can not be passionate about the property.” 

What was perhaps the most interesting aspect about the programme was the accompanying twitter debate. The appearance of the highly tanned Phillip on our screens led to a barrage of tweets with the best coming from BryansBryans: “This guy on #maryportas looks like he’s been electrocuted by a bottle of Fanta”.  With classic lines such as “West facing is the new south facing” further tweeting continued, with celebrity tweeter Duncan Bannatyne describing the above line as his favourite quote of the week. What was discernable among many tweets was a distinctive anti-Mary Portas feeling with people such as Eddiewongham tweeting “#maryportas Your TV show is so biased it is just a joke. Like a Daily Mail news article, you make the minorities sound like the majorities” and Buyingagent stating “She is adding absolutely no value that I can see so far…#maryportas”. The overall winners of the programme evidentially were Martin Gerrard as summarised in a tweet from TommyFlisher, “Bless the estate agents, of all the peeps mary has worked with they’ve been the most open to changing by miles #maryportas”.

The world’s most expensive residential apartments were officially unveiled last week at the Orient Mandarin Hotel, London. The launch party was a star studded event reflecting the luxury and exclusivity that the apartments would provide.

The 13-storey residential apartment complex has been named ‘One Hyde Park’ and is situated in the heart of Knightsbridge, arguably London’s most exclusive address. Details released at the launch specified that all apartments would benefit from  exclusive use of a private cinema, swimming pool, sauna, steam room, relaxation rooms, gym, golf simulator, virtual games room, valet service, 60 Mandarin Oriental hotel staff 24 hours a day, room service, boutiques and a lighting system that changes throughout the day to compliment sunrise and sunset.

Previous to the launch there was a lot of speculation surrounding the viability of the project. Many property experts branded it illogical to take on a billion-pound pound development in the middle of a global recession. However, these developers have proved their critiques wrong. Figures released by Savills, one of the two agents overseeing sales, reported that 60% of the 86 apartments ranging from £6 to £140 million per apartment have been sold. One Hyde Park has reconfirmed that even in times of economic hardship luxury is still a sellable asset.

The summer of 2012 will see the Olympics come to London. A great time for the city, as Boris Johnson is often quoted “A time to show the world what Britain can do”.

 Most of the Olympics will occur in Stratford in East London an ethnically diverse and economically deprived area of London. The Olympics has brought a £4bn Redevelopment project for the area with new flats and shops popping up every other day. A massive regeneration project is now under way with 73 hectares of derelict land soon to be housing over 100 shops, three big department stores, cafés, schools, hotels, parks and health centres creating more than 800 jobs.

Post-Olympics has also been accounted for with plans for the 13 acre site to be turned into a further 10,000 houses.

 But what about rental market?

 Hosting Olympic Games has a knock on effect to house price and rental market not only in the area of the stadium but for the whole country. Take for example house prices in each of the four previous Olympic cities of Barcelona, Atlanta and Sydney which rose by more than the national average in the five years before the staging of the Olympics.

 Situation now?….

One only needs to look at www.rentright.co.uk RRPI to see demand for property in East London has gone through the roof. Not only are Letting agents in the area often renting a property within the day they get them on the books but rental prices rising over and above the national average.

 During?….

According to one local agent, the Olympics will offer the perfect opportunity to cash in. “Londoners with suitable accommodation should take advantage of the short-term letting opportunities over the three weeks of the Olympics in 2012 by employing the services of a professional letting agent. Our lettings offices typically achieve 40% more on a weekly basis for short-term weekly lets and the London 2012 Olympics will provide a similar opportunity to the annual Wimbledon Tennis Championships for local residents wishing to rent out their properties to visitors to the capital.”

 After?……

After the euphoria dies down, will Stratford continue to be a centre of living, work and entertainment? No one can predict the future but the prospects of this area look to be positive especially with the most recent news that the Olympic village is set to become the newest royal park named aptly after Queen Elizabeth II. Mayor Sir Robin Wales has said “By extending the Royal Park family into the heart of East London we can guarantee attracting visitors for many years to come. This is a once-in-a-lifetime opportunity. There probably won’t be another Olympics in East London so we must be ambitious.”

 The conclusion of this… one can safely say the Olympics will make Stratford and East London a more desirable place to live.

Take a look at the lovely Mr Stevens and his growing moustache. For further information have a look at his mospace page ! Well done Neil, as itchy as it looks it’s for a good cause. Poor Mrs Stevens!

11th November

Over 10 days in and Neils lovely 70’s tasche is in full swing. Teamed with a polo neck Mr Stevens pays homage to the seventies, looking remarkably like an old school Hollywood gangster. After being complimented in the street by a lovely, young lady for his new, dashing appearance Movember is proving to be a success in more ways than one. Check in tomorrow to see a picture of Neil’s tasche!

Whether your looking for a modest two bed terrace or an architectural masterpiece Rentright’s simple and easy to use site allows you to find your dream rental in minutes. The Uk’s fastest growing lettings portal offers a wide choice of independent letting agents and bigger chains displaying a varied selection of residential and commercial property.

 With an ecclectic mix of rental property, Rentright can cater to any tenants needs. With properties like these it is no wonder Rentright is rapidly becoming the uk’s fastest growing property portal with over 1000 letting agents choosing to use Rentright to advertise.

Aside from ample space for boozy house parties, a recent survey reveals what first time students really want from their accommodation.  Alongside the obvious preferences, sharing with friends and living within close proximity to their university , students say ‘big bedrooms’ and ’substantial kitchen space’ is up there on their list of property credentials. Who knew cooking up those Batchelors super noodles required so much space?

David Cameron stuck to his guns last night and insisted that the £20,000 a year cap on housing benefit will prove beneficial.  Handouts had reached a high of up to £104,000 for jobless families and the recent cuts have meant up to 200,000 people could be forced out of the more expensive cities. Ed Miliband defended the old, higher payments and branded the new change a ‘complete shambles.’

Right so, I can understand a landlord that takes pride in his house. he may not want 10 crack smoking, ex cons living in his 2 bed semi but generally, a tenant is a tenant, is a tenant!

In my quest to unearth the weirdest property add I came across what can only be described as a very odd man looking for a tenant that doesn’t exist.

He listed his add on a popular U.S property portal last year. 

I would like to make very clear before you indulge in this magical ad that this guy is letting out a full apartment, it is NOT just a room in his/anyone else’s home.

1# About us- so he starts off with a description of him and his wife- very odd- is this a property add or is he selling a service?

‘We are conservative, bible believing, God-fearing, born again, evangelical Christians’ - Right, so for a start, I am scared. Absolutely nothing wrong with religion, but I think he has made his point.  Secondly, is it absolutely necessary for us to know every last detail about this guy and his family? As long as you’re not a money laundering, axe murderer I don’t care who my landlord is quite frankly.

 2# Cleanliness- I get this, a landlord doesn’t want mould growing from his skirting and a rat infestation, but this is possibly pushing it!

‘CLEANLINESS: You are responsible for the cleanliness and orderliness of your apartment. (OK, FINE!)

‘Beds are to be made before leaving your suite, ‘ (I’M NOT A CHILD, BUT IF IT MAKES YOU HAPPY!)

Upon inspection, if the tenant’s basement suite is not clean, the cost of cleaning services plus a fine of $100.00 will be levied.’ (WHAT?)

And if you hadn’t already, you’ve just lost your audience!

3# Morning and bedtime! – No massive parties, loud music after a certain time and thousands of drunken guests- that’s fair!

‘WAKE-UP: Wake up will be at 5:30am each morning. All ceiling lights in the suite will be turned on automatically.

LIGHTS OUT: Ceiling lights in the suite will be turned off at 11:30pm.

That isn’t.

4# Contraband (i.e. fun stuff!)

I accept that drug taking and excessive drinking (leading to aggressive behaviour/midnight street brawls) is not acceptable behaviour for a tenant.

‘CONTRABAND: The following items are considered contraband � alcohol, illegal drugs, tobacco, weapons, lock picking equipment. If any contraband is discovered to be in your possession, you will be subject to a minimum $1,000.00 fine. In addition, your items will be confiscated permanently. Second offense � you will be evicted without notice. A bailiff will escort you and your belongings off the premises. Your security deposit will not be returned.

Can we just take a minute to figure out what the hell ‘lock picking equipment actually is’ – Does a hairclip count?

5#- Visitation- A I keep mentioning a rented home should not be used for excessive house parties every Friday and Saturday night, a tenant should respect the landlords home and not use it as a doss house for criminals on the run.

‘VISITATION: Visitation periods will be on Saturdays and Sundays from 1:00 p.m. until 3:00 p.m. All visitors and their vehicles are subject to search while on landlord property. Refusal to allow a search can result in their being barred from all future visitation privileges. All visitors must sign the Visitor’s Log. Unauthorized visitors will be escorted from the property, and the tenant will be fined $250.00.’

There are literally no words for this. 

6# I.D.- Never necessary. Ever.A bit insane and slightly neurotic!

I.D. BRACELETS: Each tenant will be issued an I.D. bracelet with his/her photograph. It must be worn at all times. If you lose your I.D. bracelet or it is broken, you will be required to purchase a new one at the nominal cost of $5.00.

7# EXERCISE – (confirmation that this is actually a prison cell and not a home, your really selling it to the punters!)

‘EXERCISE YARD: The tenant will have access to the exercise yard in the area to the back of the property for 2 hours per day from 4:00 pm to 6:00 pm. The tenant is not allowed to bring any personal property to the exercise yard. Once the tenant leaves the exercise yard on a particular day, he or she may not return. No boisterous behavior is allowed in the exercise yard. There is no smoking allowed in the exercise yard. Minimum fine for exercise yard infractions is $50.00.’

‘exercise yard infractions?’ – I will say no more!