Hello Friends,
This is going to be the first of many blogs, newsletters and simple communication from the company, updating you on topics that we think you will be interested.
You will have received information with regard to changes in the market, compliance, regulations and changes with respect local guidance.
The treatment of landlords continues unabated by the government and local authorities in Stoke and Crewe, so with the latest announcements one should take heed and swallow the medicine so to speak!
Much of this communication centres around the last few Council and Fire Service joint inspections that we've ‘endured’. We alluded to this topic in our last management e-mail communication.
If you are based in the UK, you would have been very familiar with the horrible Grenfell incident in London almost 5 years ago and ever since that tragic event took place Building Regulations around safety has changed the property landscape for ever. Regardless of whether it's a 4-6 bedroom, 7-10 bedroom or 20 bedroom HMO; Local Authorities in partnership with the Fire Service are scrutinising everything!
Now, that's not necessarily a bad thing. I don't think any landlord wishes to go to bed at night worrying about the fire safety of the building which bears their name. Safe tenants and Happy tenants come at a cost and that’s why we have steadily increased rental rates to reflect in part the additional time involved and responsibility for this.
Last week we spent just about four hours walking around four properties with a member of the Local Authority and the Fire Service talking through what they consider as issues and for the first time watching them micro-test fire doors in line with the latest guidance.
In one of the HMOs, there was indeed a breach on a fire door. The officer used a very simple but effective contraption to test in order to see whether in the event of a fire, smoke would be able to penetrate the door into the lounge area from the kitchen and it was found that it was approximately two millimetres out ☹
That ‘unexciting’ walk-through has subsequently generated an official letter outlining the breach giving and providing a timescale to rectify. That means contacting a joiner to visit the property, measuring up and slightly altering the hinges or incorporating slightly thicker strips. The long and short of it is that we have to report back to the Local Authority confirming that the breach has been rectified in order to prevent it escalating to an HHSRS (Housing Health & Safety Rating System) issue and all the penalties associated with that.
Going forward it is imperative that we protect your properties and tenants to prevent serious breaches or escalation and to ensure the pricing reflects those same safe properties for the people that are living in them.
My favourite mantra is that property is a long term investment. Fortunately for you this is not fiction this is hard fact when studying the economics of owning property and returns possible over the longer term. I normally use at least 10 years for assessing the viability of a project. Over those ten years the climate will change, interest rates will change, legislation are sure to change, and as such our actions to protect your property and to protect your income also changes. At Essential Property Options we continue to endeavour to achieve all the above and now plan to keep you updated and all the latest relevant information available to us.
Some of you may be familiar with the Essential Property Podcast, which broadly delivers new material on a monthly basis focusing on Stoke, Newcastle and Crewe. The objective is to keep landlords, investors and general interested parties updated on what is happening locally, how national events affect your property and from time to time how you can profit from such events.
If you are not familiar with the Essential Property Podcast, please type the title into Google or wherever you normally obtain your podcast material and listen to the various subjects we've covered over what is now probably a couple of years.
Moving on to another subject. Some landlords have been selling for various reasons. Some of these properties are available to us where we act on behalf of the landlord. Some properties are in need of a refurb and some are fully tenanted and ready to earn additional income for you immediately after purchase completion.
If you are on our Special Deals List, then from time to time we will e-mail you details of potential off-market deals that are available, please feel free to let us know if more information is needed. Similarly if you are interested in talking about either restructuring or selling off one or more properties please feel free to contact us.
We now also operate an Advisory Service covering portfolio restructuring building on over 10 years of investing, managing, coaching and mentoring in the property investment space.
I thought it would be useful for some of you to have an idea of some of the activities that we do within our own portfolio. One such investment is a 19 bed Period looking HMO. Of course at that sort of size comes a different level of problem and one has to dig deep in this trading environment to find a different level of solution.
We decided after much consideration to project manage this development ourselves instead of using our usual Building Contractor, purely based on a cost. We reintroduced the old team that we had worked with previously on other HMO developments, giving them a full brief and splitting the project into two phases. As Amanda said at the time this was like a Marvel movie ‘The Return of The Avengers’
We are currently going through Build Control visits and communication which again have been upgraded to reflect a new environment, not only safer, but environmentally friendlier. This means there are now far more safety and material considerations to take account of. This is par for the course and reminds us that as professional property investors we take on projects that less qualified or amateur investors walk away from. This is where professionals make additional returns on their investment.
Below are a couple of images of what we walk into from time to time in this development and are forced to remind ourselves of the vision for the end product in 3 months times.
Figure 1 Removal of lath and plaster roof for new insulation in hard to reach roof
Figure 2 Build Control said the slopes of roof have to be specially insulated
If you are interested in keeping abreast of this project please listen to The Essential Property Podcasts where we talk about some of the challenges, any issues that were encountered along the way and naturally some of the wins and strategies that have been employed to move the project forward.
On a final note, Essential Property Options are expanding during the second quarter of the year. We will manage your HMO’s and SA in Bristol and Birmingham after launch. More details to appear soon!
That ends it for this blog.
I will be sending communication at least on a monthly basis probably more frequently if the need arises.
As I always say to new investors and property landlords continue to Keep The Faith, in property and your abilities to deliver positive long term returns.
Thank you and kind regards,
Paul Samuda
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