… Is HMO Dead, Are Serviced Lets Doomed – and Is the World Going To End?
We were delighted to have Vicki Wusche as our headline speaker at November’s PIM.
Vicki Wusche has been named as one of The Telegraph’s Top 25 Most Influential People in Property. As the author of four books and contributor to another 3 she is keen to help others avoid her mistakes, expand on her successes and share her experience in property over the last 7 years.
Vicki only started full time in property 2008 and since then she has spent over £4.5 million on property investments for herself and clients. When not on holiday scuba diving, she also runs two successful businesses.
During her first few years in property, Vicki spent over £70,000 and thousands of hours listening to other peoples training events. While she freely admits that she would not be exactly where she is right now if she had not identified and filled her knowledge gaps, with hindsight, like many others, she realises that all is not as it seems in the classroom. Learning about it is not the same as doing it!
Her background as a University Lecturer, Education Strategist, Master NLP practitioner and Business Mentor has really helped Vicki to understand both how people learn and what they need to know in order to be successful.
She treats property investment as a business and and alongside her property sourcing business for bespoke clients, Vicki runs a strategic mentoring business.
“How to Choose the Right Landlord / Investor Strategies for Success in the Current Property Market and its Challenges”
With 2017 looming, the aftermath of the American elections and the complexities of Brexit on the horizon, what does the future hold for property investors like us?
As Vicki highlighted in her presentation, the outlook has changed over the last year. The UK government is still cutting benefits, Universal Credit is still rolling, stamp duty is still hiked and the offensive against Clause 24 is legally stumped. So, many people are asking: is property still worth it?
The key is to be smart about opportunities and spot changing trends.
HMOs may work for you in one area and not in another – it doesn’t mean they don’t work at all. The market can be distorted temporarily. Vicki highlighted Lincoln as an example. Not so long ago, property could be bought there for under £100k, converted to HMOs and give an 18% return. Then a couple of brothers inherited a lot of money and targeted the area, paying higher prices. So returns fell.
Still, the UK trends for supply and demand remain – there is still a shortfall.
It’s always important to provide a quality product which will be in demand – and to consider what is now important to your market, when renovating. As a simple example most tenants now want more plug sockets and also expect broadband.
Treating property investment as a business, you need to look at the implications for your time too – HMOs are much more time consuming to manage. Also the financial models may only work when you have good occupancy rates – and churn is higher in HMOs; it can be hard to keep that final room occupied. So overall you may be better with a single let.
Vicki uses her Six Steps Business framework, covering
- Business models – Renting , Sourcing, Developing
- High value products
- ROI and leverage
- Clients and credibility
- Time and the best use of it
As Vicki highlighted, the key for a successful, profitable, business is to find the sweet spot where these 3 elements overlap
- Clear Offer
- Client Desire
- Value and Quality
Vicki went into some of these areas in considerable detail – and we also played her “credibility game”, swapping business cards to see what they said about each other. Both fun and revealing …!
Post Brexit Opportunities
There are always new opportunities and 2017 will be no different. Vicki herself is definitely still investing – she’s bought 13 properties in the last 5 months and is getting involved in developments – she is clear there are excellent opportunities, but her advice includes:
- Don’t just follow the crowd and do the same as everyone else
- Check out opportunities carefully
- Don’t just chop and change – find the best model for you and follow it through
- We are currently seeing growth in serviced accommodation – this is a different model, so make sure it works for you if it appeals
- Sourcing is really all about marketing – make sure you have these key skills
- Buy through a limited company, unless you have basic rate tax income only
- You need specialist expertise to get planning, so be careful if this is needed
- Be prepared to pay for good professional advice, it is much cheaper in the long run
- Flips are quite risky at the moment in many areas
- Commercial to residential conversions offer good opportunities but higher risk
This was an excellent presentation, with extremely useful advice, much appreciated by everyone there.
If you missed this one, then do make sure you join us for our next PIM on Thursday 26 January 2017 at Holiday Inn, Bristol City Centre, 6-9 pm
For more info and to reserve your place CLICK BELOW!
We look forward to seeing you in the New Year.
Del Brown and the team at Property Options