The Essential Property Podcast
Episode 52
Transcript
In today's digital episode, we provide an insight into our client case studies, whether it be assisting with their first deal or reviewing an established portfolio for an experienced investor. We're sharing a snapshot of the success of our coaching and advisory clients in Stoke on Trent and Crewe, plus a little further afield in Birmingham and the north of England. We hope you enjoy this episode. Let's check it out.
All right, let's dive in. Today we're taking a closer look at the UK property market, specifically HMOs and service accommodation. You know, those property types that can really shake things up. Yeah, definitely. We've got some insightful guidance from Essential Management, a company that's all about helping investors make smart strategic moves with their properties. They've got a great reputation. They do. And today we're going to unpack some real world case studies they've shared. That was interesting. And trust me, these aren't your typical buy and hold stories. We're talking about creative solutions and adaptations in a market that's constantly evolving. The market's definitely keeping everyone on their toes. It is. So are you ready to get into these case studies and see what we can learn? Absolutely. Let's do it okay great.
Let's jump into the first one right. This case involves a first time developer who get this converted a shop a shop. Yeah. Shop into a six bedroom HMO. Wow. That's ambitious. It is. And each bedroom even has its own en suite bathroom, so it's like a high end HMO setup. Exactly. They were aiming for quality. Makes sense, especially in today's market. Now, what's interesting is that essential management didn't come in at the very beginning of this project. Oh, really? The developer already had the property, the financing sorted, even the architects lined up, so they were already well on their way. They were. But what they needed was that strategic edge, that extra layer of insight to make sure they are making the right moves. That's where essential management comes in. Precisely. So what kind of guidance did they offer at that stage when the project was already in motion? Well, a lot of it was about market insights, you know, really understanding the rental landscape in that specific area. They didn't just jump into design and logistics. They looked at the bigger picture. Exactly. And what they found was strong demand for rental properties. But coupled with rising rents, so was a competitive market for sure. Very competitive. Yeah. Which meant that the developer had to create a truly high quality living experience to stand out. It's not enough to just provide the basics anymore, right? Not at all. Tenants are paying more. So their expectations are higher. They want value for their money, I can imagine. So it's not just about squeezing in as many rooms as possible. You've got to create a space people actually want to live in. Absolutely. And Essential Management actually pointed out a trend. They were seeing people moving from single occupancy flats into HMOs because of affordability. Exactly. And limited housing options in some areas. So these tenants may be in an HMO temporarily. Right. But they still want a well-designed, comfortable space. It makes sense they're making a compromise on space. So the quality of that space becomes even more important. That's a great way to put it. So what else did essential management advise I mean, besides understanding the market and focusing on tenant experience? Well, they really emphasized the importance of navigating regulations, especially around fire safety. I imagine you got it. They made it clear that compliance is non-negotiable for landlords. Cutting corners could lead to serious consequences, both legally and for the safety of the tenants. Absolutely. It sounds like essential management provided a crucial reality check for this first time developer. Yeah, they brought a dose of realism to the table. And that's a great takeaway for our listeners too. What is it even a challenging project like? Converting a shop can be profitable, but you have to understand the market, prioritize quality, and stay on top of those all important regulations. Yeah. That's crucial.
All right for our next case study. Okay. We're heading up north. Yeah, to a different region with its own unique dynamics. This one involves a client with a substantial property portfolio. Okay. Someone who's been in the game for a while. Exactly. But they were facing a different kind of challenge. A saturated serviced accommodation market. There are lots of companies, tons of competition. And they were seeing a decline in bookings, particularly from contractors who had been a reliable source of income in the past. Hmm. That's a tough spot to be in. It is. So what did essential management advise? Did they suggest lowering prices to compete in that crowded market? Not at all. Instead of relying on a single strategy okay, they encouraged diversification. So branching out, trying new things. Yes. They suggested broadening marketing efforts to attract new types of guests beyond just contractors. Right. Think corporate events, team building activities, even filling those mid-week gaps with targeted promotions. So really maximizing occupancy throughout the week. Exactly. Making the most of every opportunity very smart. Were there any other creative solutions they offered? One suggestion was to divide larger properties into smaller, more marketable units. But instead of renting out a whole four bedroom house, yeah, they could create multiple 1 or 2 bedroom units, which would appeal to a wider range of buyers and potentially increase the overall value. That's brilliant. Creating flexibility within their existing portfolio. What was the thinking behind the strategy? Adaptability. The market is constantly evolving and landlords need to evolve with it. You can't just sit back and expect things to stay the same. Nope. You need to be proactive, adaptable and willing to try new things. That's a valuable lesson for any investor, really. It applies to so many areas of life. It does.
Okay, ready for our final case study for this part of the deep dive? Sure. Bring it on. This one involves something many people might not be familiar with. Social housing contracts. Okay. I'm intrigued. The client had two HMOs nearing the end of their long term social housing contracts. So agreements with local authorities or housing associations. Exactly. And with rising interest rates. Yeah. Everyone's feeling that they needed to increase rent to maintain profitability makes sense. However, their current tenants who relied on social housing support couldn't afford the higher rent. That's a tough situation, a real dilemma it was the landlord needs to make a return on their investment, but the tenants need affordable housing. It's about finding that balance. So how did essential management help find a solution that worked for everyone? It required some delicate maneuvering. They analyzed rental rates, and they explored options for finding a new tenant who could meet the higher rent requirement. So they weren't just looking for any tenant? No, they were looking for the right tenant for this specific situation and their deep understanding of the market, their network. Those were key. What happened through their network. They connected the client with social housing providers who were willing to pay the increased rent. Exactly. And the outcome? A new ten year social housing contract worth £1 million in rent. Wow. That's incredible. Not only did the landlord secure a long term contract, but they also ensured the property continued to serve its purpose as social housing. It's a win win, and it really highlights the value of expertise in these complex situations. Knowing the ins and outs of social housing contracts and having those connections. Yeah that's crucial. These case studies have been fascinating. They've really showcased the diverse challenges facing landlords in the UK market. It's a dynamic landscape for sure, and the creative strategies being used to navigate them. There's always a way forward. That's right. We'll be back after a short break to delve deeper into the takeaways from these stories. Okay, and what they mean for you, our listener. Sounds good. You know, these case studies really show just how dynamic the property market is. These days. Yeah. For sure. Things are changing so fast. Definitely. And it's not just about keeping up. It's about staying ahead of the curve. Exactly. Anticipating those shifts and adapting your strategies.
What stands out to you the most from these examples? Well, what I find really interesting is that while these cases are specific to certain regions, you know, Birmingham Derby, right. The underlying principles and the strategies they're using, those can actually be applied much more broadly. So even if our listeners aren't in those exact locations exactly, they can still learn from these experiences definitely. And apply those lessons to their own local markets. Absolutely. It's about understanding the core concepts, yet the fundamentals and then adapting them to your specific situation. I like that, so let's break it down a bit okay. Take that first case study for example with the shop conversion. Yeah that was a unique one. It was. But the emphasis on design and tenant experience that's relevant no matter where you are. Oh absolutely. Renters are becoming so much more discerning these days. It's not just about finding the cheapest option anymore, is it? No, not at all. It's about getting the most value for your money. And that value can come in different forms, right? Absolutely. Modern amenities, good internet connectivity, maybe even communal spaces for socializing, creating that sense of community. Yeah, exactly. And that's something landlords everywhere need to be thinking about regardless of location. I agree, if you want to attract and retain good tenants, you need to create a living space that truly meets their needs and expectations. And those expectations are rising. Just like rents they are for sure. Yeah.
Okay, let's move on to the second case study. All right. The one with a large portfolio up north. Right. That one really highlighted the importance of diversification and adaptability, wouldn't you say? Absolutely. Sticking to just one strategy, especially in a market that's constantly fluctuating. That could be pretty risky. It's like putting all your eggs in one basket. Exactly. And if that basket falls, you're in trouble. So. What Essential management suggested was exploring different rental models, targeting a wider range of guests like they suggested with the corporate events and team building activities. Exactly, and even considering property subdivision splitting those larger properties into smaller units. That's right. It's all about spreading your risk right and creating new opportunities. So it's not just about avoiding risk. No, it's about being proactive, taking control and finding those new avenues for growth. And that adaptability is key in any market really. Especially one is dynamic is property.
Now the third case study with the social housing contracts. Hmm. That was a really interesting one. It was. And I think it might be a topic that some of our listeners aren't too familiar with. Yeah, it's a bit more a niche, but equally important for sure. Could you break down what a social housing contract actually entails? Sure. Essentially, it's an agreement between a landlord and a local authority or housing association. Right. The landlord agrees to rent their property to tenants who qualify for social housing support, meaning the rent is subsidized by the government. Exactly. And these contracts typically have longer terms, which offers stability for both the landlord and the tenant. It does. It's a different kind of investment strategy, for sure. And in this case, essential management was able to navigate a potentially tricky situation and secure a positive outcome for everyone involved. They did their understanding of those social housing regulations and their connections with the relevant organizations, absolutely. Plus their negotiation skills. That's crucial. Yeah. It shows how valuable expertise can be in these more complex areas of property. It's not just about knowing the market, it's about knowing the rules of the game and having those relationships. Exactly. So for our listeners, if they're thinking about investing in HMOs or SA or they're already in the game and looking to up their strategy, step things up a bit. Reaching out to experts like essential management. That's a great first step. It is because having access to that kind of specialized knowledge and support, it can make all the difference. It can. It's about having that extra layer of confidence and guidance as you navigate this market, which can be pretty overwhelming at times. It can for sure. Now, before we wrap up this part of our deep dive,
okay, I want to leave our listeners with a thought provoking question I like it. What is it? We've explored these fascinating case studies from various regions in the UK. Right. But what about your local market? Good question. What unique challenges and opportunities do you see? Yeah. What makes your area different? How might these trends and strategies apply to your specific area? That's something for our listeners to really ponder. It is because at the end of the day, it's about taking these insights. Yeah. And applying them to your own unique context. That's where the real learning happens. It is. It really is. It's about taking those broad ideas and making them work for you in your own specific market. That's the key. It is. And we've seen throughout these case studies how valuable expert guidance can be, you know, navigating all the ins and outs of HMO and S.A. property management. It can be a lot to handle. It can, you know, from understanding those market trends to diversifying strategies and don't forget those tricky social housing contracts. Right? Having the right support can make a huge difference. It's like having a partner in your corner. Yeah, someone to guide you through the challenges and celebrate the wins. Exactly. And it's not just about seeking guidance when things get tough, right? It's about being proactive, staying ahead of the game. Exactly. Connecting with experts like essential management that can help you anticipate those challenges and seize opportunities before they even arise. That's the goal. It is. It's like having a secret weapon, that extra layer of knowledge and support and confidence to definitely.
So it's not just about maximizing profits? No. It's about creating sustainable and responsible investment strategy to benefit both you and your community. It's about finding that balance between financial success and positive social impact. Exactly. And I think these case studies have shown that it's definitely achievable. It is. It's inspiring to see those success stories. It gives you hope for sure. So for our listener, if you're ready to take your HMO or SA property game to the next level, don't hesitate to reach out to the experts. They can provide that tailored advice, connect you with valuable resources to help you navigate this ever changing property landscape. It's worth it. We've covered a lot of ground in this deep dive. We have explored some real world examples of how landlords are adapting in the UK's dynamic property market. Exactly, and we've seen the importance of market awareness, strategic diversification and that power of expert guidance. It's all connected. But most importantly, we've seen that success in property investment. It's not just about profits, it's about creating positive outcomes for everyone involved. That's what makes it truly rewarding. Couldn't have said it better myself.
Well, on that note, we've reached the end of our deep dive. It's been a great conversation. Thank you. Thanks for having me. And thanks to our listeners for joining us on this exploration of the UK property market. We appreciate you tuning in. We hope you've gained some valuable insights today and feel inspired to take your property journey to the next level. Until next time, keep learning, keep exploring. Keep those property ambitions burning bright. We'll see you on our next deep dive.
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