Believe it or not; SOURCING INVESTMENT PROPERTY is a skill. It requires in-depth knowledge of an area & a dedication to finding the right properties within your perceived HOTSPOT (Stoke-On-Trent was voted top 5 HOTSPOT area in the UK)
Five years ago, the Founder Of Quality Lets (himself a person with a large property portfolio) predicted a certain area would become a Hotspot for HMOs (Houses of Multiple Occupation). Here is his own account of the scenario that unfolded:
“The Doctor we call him as he is a Doctor but now it’s more of an affectionate term than a title now as we have become to love the Doctor! A few years ago I first met the Doctor when I sold him a portfolio of 4 student houses. Whilst the sale was going through we had to sign students up for the following year – risky or what?! We knew that the sales wouldn’t fall through so we were happy to take a risk for the client. Anyway after a successful year of renting to Students, I eventually persuaded The Doctor to invest in my hotspot area.
We viewed five properties all with a view to converting them to HMOs. I immediately told him to buy all five to which he smiled and said ‘let’s just do one for now as I want to see how things go’ (Cautious Investor is the Doc). So we settled on one which was listed at £75,000 and which I negotiated down to £72,000 on his behalf.
On the day of completion we collected the keys. The next day our joiner was in constructing a partition wall for a downstairs bedroom & hanging the fire doors. When he had finished, our electrician put in the smoke alarms & did the relevant checks & certification, at the same time the plasterer was there finishing the partition wall. Then was the turn of the Gas Safety Engineer to do some work & safety checks alongside the decorator.
After a busy week it was furniture time. We took care and attention to choose the right furniture for the property maximising space & incorporating a great contemporary mono style. In the meantime we had already been scouting for tenants. All this time the Dr is on my case asking how things are and visiting the property. Within 3 weeks of its being ready, all three housemates were moved in.
“The property fully rented out benefits The Doctor to the tune of £13,520 gross per annum. The property has never been void in a period of 2 years. Two tenants have left but the rooms filled immediately”
So now you have purchased your first property what now? Every house has different challenges and requirements but here are the basics on a standard HMO upon to 4 sharing this can vary from council to council and inspector to inspector but in my experience these are the things ive always been asked to comply with. Smoke alarms wired, fire door to the kitchen, thumb locks on all external doors for fast exit incase of fire, fire blanket in the kitchen, extractor fans to the kitchen & bathrooms, bedrooms doors fitted with locks that have thumb locks on the inside, on any 3 storey houses we have to comply with emergency lighting, compliant electrics you may need light updating to more involved updating ie, earth cabling, earth rod, consumer unit etc.
Your property may also require further updates, ie decor, partition wall, new kitchen, new bathroom the list goes on and I can tell you now letting property out today is whole new ball game than it was years back. We are in a very competitive market today with many investors willing to spend thousands doing their properties up to a very high standard, we at Quality Lets have upped our game in recent years and have matched the market trends of refurbing Buy to Let properties to a very high standard. here are a few examples of some of the refurbs that we have completed.
A Quality Skillset
So you maybe asking why Stoke-on-Trent/Newcastle Under Lyme? Without going into too much details heres a snippet, we are in the middle of the UK so HGV drivers can reach most of the UK in a journey before they have to take a break, only Stoke-on-Trent/ Newcastle Under Lyme offers this strategic position thats why the likes of Amazon, Screwfix, Sainsburys, Dunelm, M&S, pets At Home, DHL, New Look, XPO Logistics etc are all coming to Stoke-on-Trent/Newcastle Under Lyme. We also boast 2 universities, Keele University and Staffs University collectively there are around 25,000 students, we also boast one of the largest hospital in the UK (The Royal Stoke University Hospital) this in its self employs over 6,000 staff. So as you can see there is a lot to go at probably more than other cities. If you were to drive around the City of Stoke-on-Trent/Newcastle under Lyme you will see development after development the transformation is fast, the main town centre of Hanley is fast becoming a major shopping destination boasting a 20 million Hilton Hotel and 3, 500 arena it really is happening. Now lets go south of the City where the train station is thats having a 5.6 million pound revamp that connects us to the hub of HS2. Then there is the Spode site which is having a major transformation having millions spent on it with a pop up hotel and tea rooms with workshops etc. Stoke-on-Trent also has a very proud heritage of pottery & coal mines, we also boast the Severn Trent and beautiful canal ways and not forgetting the Peak District is only half an hour away. The City is certainly on the up & has lots to boast about, so buying property in the right locations will certainly benefit you in the future. I always say to my investors that Stoke-on-Trent/Newcastle under Lyme is a 10 year plan though im making great equity gains at the moment whilst achieving high rents on HMOs.