ARE YOU A WORK MARTYR? Do you feel like you can’t afford to take time away from your property business otherwise you’ll fall behind and have loads to catch up on?

Or maybe it’s the opposite – are you taking loads of time off and have lost momentum with your property activity?

The summer is a wonderful yet challenging time for many in property, and in any business for that matter. It’s a challenge because we don’t want to lose all the great momentum built up over the first half of the year, nor do we want to miss out on the fun to be had when the sun comes out.

SInce we are right in the middle of the school summer holidays, for many, I thought it would be helpful to share some psychology and tactics that can help beat these challenges I mentioned. These are things that I’ve learned through mentors and have been consciously practising for several years. I don’t always get it spot on but these things have certainly helped provide me with a healthy reframe for holiday time and helped me keep momentum going over the summer period. 

To start with here are a couple of psychological reframes for summer:

#1: GO ON HOLIDAY 

Yes it sounds obvious, it’s summer time after all, but you’d be amazed at how many people don’t actually take holiday ie statistics for unused holiday days in the employed world are shocking. Not wanting to take time off or thinking we can’t afford to take time off is unhealthy. Just like top athletes incorporate rest and recovery as part of their elite training regime, we need rest and recovery in our property businesses to perform at our best.

Lets say you are project managing a conversion project, or running a busy SA business – if you keep pushing everyday in the business you are at risk of burning out or at the very least resenting what you are doing because you’re missing out. We need to learn to let our inner child out to play by taking time off, then when we get back to work that inner child stays quiet for another chunk of time so you can focus and be your most productive self.

#2: HOLIDAY PERSPECTIVE

Don’t associate holidays with ‘lost time’. This is crucial, and it’s a mental battle I wrestled with for some time. You don’t want to have self talk when you return from holiday of ‘I need to get caught up, I’m so far behind’. That kind of thinking will only train the brain to think that, ‘any time I go away I have the pain of having to catch up’. Instead we have to tell ourselves that time out is part of our high performance and on return it just needs to be a standard week, and unread emails will be worked through gradually. 

SOME SIMPLE SUMMER TACTICS

#1: PLAN YOUR PLAY – get your holidays as well as the local trips and meals out planned and in the diary.

Every summer Darren Hardy shares some great video messages on this same topic and he often shares this anecdote from the late Jim Rohn who used to feel that when he was in the office and it was sunny he felt guilty that he wasn’t at the beach with his family. And when he was at the beach he felt guilty that he wasn’t in the office. He therefore felt he wasn’t being any good at the beach or at the office. Here’s the lesson from Jim,  

“When you are at the office, be at the office and don’t be thinking about the beach. Then when you are at the beach, be fully at the beach.” – Jim Rohn

And we can’t do that unless we have already scheduled the time off. With the fun activities scheduled it releases us from thinking about them at work and we can be fully focused.

#2: STAY CONNECTED WITH YOUR WHY AND YOUR TOP 1-3 GOALS FOR THE QUARTER

I’ve found this really helps keep me focused ie on the books I choose to read and to stop me going down rabbit holes in terms of exploring property ideas that aren’t related to those top 1-3 goals.

#3: WRITE OUT YOUR PICK UP POINTS

What I’m referring to here is to write out exactly where you want to pick up a piece of work when you get back from a holiday. So for example if you’ve had your head deep in some due diligence and deal analysis then write yourself a little note that will make it quick and easy to pick up where you left off.

#4: DISCONNECT AND BE PRESENT

I said this in point #1 with Jim Rohn’s quote but saying it again now because your kids will thank you for it. As part of being disconnected fully present whilst you are away, set things up before you go by managing people’s expectations, ie let people know you will not be responding to things, set your out of office on, voicemail on etc.

#5: WRITE DOWN IDEAS THAT POP INTO YOUR HEAD

Write down big picture ideas so you can get back to being on holiday. Holiday ideas are often like ‘shower ideas’, in other words ideas can pop into your head when you are relaxed that could be a new or more creative angles to approach things in your business. Be sure to write those down so you know what to do about it when you’re back at your desk. You want to get those ideas out of your head so you can get back to being present with your family and the holiday. 

#6: DON’T FORGET THE POST HOLIDAY REFRAME

When you get back to work remind yourself that its not about making up for lost time, focus on having a standard week and that gradually working through emails etc will be part of that. 

Here’s to your summer. Which of these summer tactics and reframes resonates most with you?

[Image credit: Dreamstime.com]

The journey that is property investing has been assigned many analogies over the years to bring colourful similarities and comparisons with things we can relate to. 

Since Chris and I have been on the road over the last couple of weeks – literally pedaling every day for 10 days, I thought it fitting to make this week’s post a video from part way through our Lands End to John O’Groats cycle trip. 

I had plenty of time to think on the bike, just no time to write. So, here are 10 logical links I thought of between a property business and cycling that I hope serves to remind us (myself included) of what is important to optimise your journey… whether in cycling or in property. 

Sometimes there will be long tough climbs where you have to work extremely hard and just get your head down and push, sometimes it’ll be flat but still need some pedalling to keep moving, other times you can cruise down hill and catch your breath! Either way, it’s a journey and we have to keep on moving forwards- on the road and in property.

So, 10 points coming up…No. 1 is to Start with why…..for this journey our big why that was driving us forward was to raise money for Cancer Research, because cancer has impacted our families, as it does for so many. If you’d like to support our cause please donate what you can here:

https://www.justgiving.com/fundraising/tsen-tsim-tsumi-rich-chris

I had attempted to post this video blog midway through our journey but the wifi strength at the places we stayed never quite made it happen. Now with the journey completed on Wednesday, Chris and I can honestly tell you that as we pedalled onwards day by day each and every donation and message of support helped spur us on, so an eternal thanks🙏🙏🙏 for all those, please do help us keep raising our donation amount to help fight cancer 😊❤️. 

P.S. Hope you like the backdrop, it was stunning in the Lake District. 

Which of these 10 points resonate most for you in your property business?

Often, it’s not new information we need but rather being reminded of what we already know, so that we then go on to use it.

I first shared the post below exactly a year ago following a week of masterminding. Chris and I would normally be facilitating mastermind tables this week but on this occasion we’ll be cycling the length of the country from Lands End to John O’Groats to raise money for Cancer Research. [If the cause strikes a chord and you’d like to sponsor us please visit our page https://www.justgiving.com/fundraising/tsen-tsim-tsumi-rich-chris ]

So, back to this post, I chose this one to share this week as I’ve invested a higher proportion of time this week in the preparation for the trip, plus I feel the message is just as relevant as when I first shared it. In fact I might argue that it’s timeless. Here it is….

I have huge respect for, and affinity with, those who are committed to using property investing to create more of the life they want. If that’s you, then we are kindred spirits. This is the journey I’ve been on since 2007 – it’s what I strive for and what I find great joy in helping others with too. 

Every month I am fortunate enough to be in the position to mentor people on their property journeys, by facilitating powerful mastermind groups. I absolutely love holding mastermind days, the magic that comes from tapping into the group intelligence to help overcome obstacles or add fuel to the fire of opportunities….there’s nothing like it. 

I recently worked with two such groups and there was a very clear and obvious theme underlying both days that needed to be addressed. It was one of uncertainty – uncertainty about which property strategy to focus on, about where to start, about how to start…and a range of other secondary questions that flowed down from these. 

This is where knowing about and implementing a simple but powerful change of perspective can melt away that uncertainty. I wanted to share with you a snapshot into what we were talking about because I’m confident that either you’ll learn something new, or you’ll be reminded of what you already know that you can now go out and use.

THE CRUCIAL INGREDIENT

To help explain this I’m going to quote from MJ Demarco’s Millionaire Fastlane – “The winning premise of business is simple yet often forgotten by most business owners: Businesses that solve needs win. Businesses that solve problems win profits. Selfish, narcissistic motives do not make good long term business models.”

The most important message in the Fastlane book is this – “Stop chasing money and start chasing needs”.

Those seven words you just read really can change everything, especially when applied to property. [I know this from personal experience because it was the key change that allowed us to pivot out of a failing serviced accommodation business and start a new profitable version of it.]

So how does this all relate to property and the mentoring conversations I was having this week? 

Well let’s put into context the quandary many find themselves in at the beginning of their property journeys – ‘How do I make money from property when I don’t have any to invest?’ Or ‘How do I know where to start?’

This is where the perspective change outlined above comes into play – to answer questions like these we have to switch the focus away from chasing money and instead focus on chasing needs. 

This powerful pivot in focus led us into productive conversations during the mastermind session that shone light on the path to making that first bit of income through property deals – for example we discussed:

• Finding niche audiences that require short stay accommodation, matching them up with existing serviced accommodation operators and charging a fee.
• Finding time poor investors in your area and offering your time to source, analyse and deliver shortlisted property opportunities for a contingent fee if they invest.
• When it came to questions about finding and working with JV investors we discussed how the same principle still applies ie by asking questions to figure what needs/problems the investor has in relation to their cash in the bank that you could help solve with certain property deals. 

I hope this subtle yet powerful distinction can serve those reading this as it has for me – this change in approach really is like moving out of the dark where you were trying to make decisions with no information and feeling fearful; and into a well lit path with the information you need to make optimal decisions and feel confident.

What I am touching on here is the core philosophy that guides everything we do in our property businesses. It guides how I mentor others and its what I wrote about in my book Predictable Property Profits.

In closing, ask yourself, how can you ensure this crucial ingredient of serving a real NEED is present in your property deals?

Have a great week ahead.

Are you more interested in the struggles or the successes of people in property? 

Whilst out cycle training with Chris for our Lands End to John O’Groats ride our chats cover a lot of ground – from strategic thinking, goals, funny films, health, life, property business…all over the place. One of the conversation topics that came up this week was discussing mistakes we’ve made, and how those mistakes while painful in the moment have helped us grow into the people we are today. 

I think it’s quite common for people to hide away their mistakes and keep quiet, perhaps because we pick up through school and society that mistakes are bad. However, looked at through a different lens, deep down we know that mistakes that don’t threaten our life and health are actually good for us. We know we have to experience them to grow.

So, in acknowledgment of that I thought instead of talking about a hotel viewing we did this week, why not talk about some mistakes that have helped me become who I am in property today. I hope it can help others reading this reflect positively on past mistakes too.

In no particular order, here’s a quick reflection on 5 mistakes that, on reflection, have really  helped me grow.

**I bought my first BTL investment because it ‘looked cheap’ compared to London property, where I was living at the time. I had no understanding of the property itself, the local market, no understanding of leasehold property (something that would lead into a load of hassle with this property). I was just desperate to get started. A little bit of basic property education and taking the time to really understand what I was buying would have helped me select a different property…but now I know that 😊

**Trying to multitask at weekends by attempting to do some property work related things whilst simultaneously trying to look after/play with my young kids. Total failure! I later realised that you have to be fully present and focus on one thing at a time, otherwise both you and your child end up being frustrated and the worst version of yourself. Learning to schedule and my week effectively and factor in appropriate time for business, family and health has been huge. It took me a while but I learned that when my kids asked me to play/do something with them that I can say yes to them first, explain that I’ll play with them for X amount of time and then return to the property stuff. That way I can focus fully on the kids, even if only for 20 mins, and then get back to the property task.

**In 2014 I tried my hand at creating a software product for executive recruiters. That was a 3 year struggle to finally arrive at the conclusion that the business was totally out of alignment with what I wanted to be doing. I chose that path for the wrong reason – wanting to make money as quickly as possible. I learned there’s no point doing something just for the money, the entrepreneurial roller coaster is tough enough as it is so it will serve you so much better to allocate your time and energy to something in alignment with your highest values. For me, this is where I found serving people through property is where aligned in starting and growing businesses. 

**When Chris and I first formed a business partnership and started to invest in our property education we got ourselves well and truly overwhelmed with shiny penny syndrome. All of the property strategies were appealing to us and we were trying to execute about 4 different strategies all at the same time. We were busy idiots scraping the surface on multiple property strategies rather than immersing ourselves and focusing on one thing. After a few months of this we finally realised the importance of FOCUS and committed to doing one thing for at least 6 months – that being rent-to-rent serviced accommodation. It seemed so difficult to say no to all these other exciting property strategies in the early years but now I know it wasn’t a case of saying no never, it was simply no for now because we had to give ourselves the bandwidth to focus on one thing for long enough to get some meaningful learning and progress with it before adding anything else. Chris and I have since been able to layer in those exciting other strategies in a more measured and strategic way. 

**This one is probably my favourite mistake because the lessons that came from it have been so powerful and lasting – it was getting started in rent-to-rent SA based on nothing more than guesswork and hope. Well, that first outing with 4 SA properties didn’t make us any money. It did however teach us some incredibly valuable (although painful at the time) lessons that led us to start again with a new approach built on finding the demand first. That new approach was born out of a painful experience and the necessity to find a better way. It was the sharp realisation we needed and I’m so grateful for it because we have used those lessons to start and grow a profitable wee SA business [if you’re interested I’ve written about that journey of failure to success in my book Predictable Property Profits https://www.amazon.co.uk/gp/product/1527253732]

So, those are 5 mistakes, amongst many that I’ve made but I feel these have contributed most to my growth along the property business journey. 

What about you – what’s been your favourite mistake in property? 😊

In the week ahead we will hit the end of quarter 2 and the half year mark. Will you use this marker for strategic reflection? 

In this post I’ll share 6 POWERFUL STEPS TO REVIEW THE MID YEAR POINT IN 30 MINS OR LESS.

 At the beginning of the year Chris  and I always set some Big Hairy Audacious Goals (BHAGs), both to grow ourselves and our property businesses. Our goals tie together our ambitions across our SA business, our resi and commercial assets, development projects and our training and mentoring. Reflecting on where we are, there has been a great deal of progress in our businesses and growth in ourselves. Whilst it can sometimes feel like taking a 6 month snapshot right now doesn’t equate to half of what we want to achieve in 2021, we recognise the importance of measuring the progress and gains. Measuring progress is such an important part of the property journey, and any endeavour for that matter. Just the other day I heard Tony Robbins say that “Progress equals happiness”, and I can see the psychology behind that. 

That’s why every quarter end I invest 30-60 minutes to review the past 3 months, predominantly focusing on our property business but also reflecting across other key areas of life. 

Whether you set big hairy audacious annual goals, half year goals or 90 day goals, this mid-way point in the year prompts a great opportunity to check in on where we stand with things.

This kind of exercise holds multiple rewards for you and is a goldmine of learning and ideas if you’ll just take the time to do it. Benefits include, taking time to acknowledge your incremental progress, course correcting, checking in on alignment to your highest values, identifying patterns or insights you can learn from….you get the idea.

If you’re up for investing some ‘holiday time’ on yourself, here’s the full 6 phase process I got from entrepreneur Peter Voogd a few years ago and I complete this every quarter.

Section #1 – OVERVIEW

What went well, what didn’t?

When was I in my zone, when wasn’t I?

When was I at my emotional energy peak?

What caused me peace of mind?

What frustrated me? Did I do what I said I was going to do?

What systems have I put in place?

Section #2 – PSYCHOLOGICAL

What have been my biggest breakthroughs?

What have been my biggest frustrations?

What have been my mind-shifts?

What have been my biggest disappointments?

Section #3 – TACTICS

This section looks at what were my top 5 wins from last month/quarter; financial, family, adventure…?

Getting down to business metrics ask yourself:

Did I hit my property business income goal last month/quarter?

What were the top three marketing campaigns or sources of income last month/quarter?

What were my top income producing activities?

What are the biggest ways I’ll be producing income this next month/quarter?

How did I add value to the marketplace, could I have added more?

The above will likely be related to your highest values but only you will know.

Did I leverage technology?

Did I maximise my reach?

What will exponentially grow my reach this next month/quarter? [you need to define this for the context of your property business ie for your SA market, or rent to buy market for example]

What did I do to stay adventurous and feel fully alive?

To help keep you from the nitty gritty march of each day it’s important to mix it with the things that energise you. It might be something small ie for me it’s getting in a game of tennis once a week, or maybe you had planned a mini break with your loved one. For those with freedom in their highest values this will be particularly important. Can you mix your passion and profession and link up travel to fun destinations with your work?

If you aren’t consciously making a decision to put things in your diary that will keep you alive and vibrant, you will become complacent and procrastinate on the big work needed for your goal.

 

Section #4 – RELATIONSHIPS

I love this one:

Who did I connect with and reach out to last month/quarter?

Did I take care of my current relationships and did I reach out to people who can cut my learning curve in half- i.e. people who I can partner with in some way that’s relevant to your business?

Did I leverage partnerships?

Section #5 – TEAM

Think about questions that will help with your team review:

How was my team engagement?

How was my speed of communication?

What feedback can I give them?

What do they need in terms of skill development?

Section #6 – LEGACY

What did I work on that was legacy focused? In other words something that you work on now but won’t get paid until long into the future, or something that you don’t reap the benefits for until way later, ie it can be creating things that you value but that you get paid 6 months or more down the road for. Note that if you just do this kind of work for the rewards/benefits you will lose steam, it’s important to engage in legacy work for other reasons, for something bigger than you.

Voogd recommends spending 80% of your time on profit making activity, creating systems etc that makes sure you have the money coming in for you and your family now. Then 20% of your time on legacy focused things. Eventually when you have built the business you want you can switch focus to investing 80% of your time on the legacy side of things. Isn’t that an exciting prospect? To spend 80% of your time on something that helps a cause you believe in or adds value to the world in some way, and not worry whether it pays you or not.

And there you have it. If you don’t have a review process, I urge you to copy this into a word doc and start now.

Who already has a review process like this, and who will start now having read this post?

Can you relate to the feeling of, ‘There aren’t enough hours in the day”? 

It’s common for property investor entrepreneurs to feel overwhelmed with To-Do’s. You know how it is- it feels like your day is never done, your workload continues to grow and there aren’t enough hours in the day. 

Don’t worry this happens to all of us at some point, and probably several times a year. This is often a discussion topic in the monthly mastermind sessions that we run, and since it’s been brought up recently I thought it would be helpful to share a practical exercise I discovered last summer, and since then I gone through this simple exercise several times a quarter. I find it incredibly helpful for finding focus and prioritising the main thing. Or as we were discussing in a mastermind group the other week, finding the ‘One Thing’ for your property business and prioritising effort on that thing (ref to the book of the same name).

What I’m referring to is a simple technique for helping you find flow and deep focus, and it’s something I’ve been working on for some time now to bake it into my weekly routine. 

Every week going forwards there is an approach you can take to make sure you are finding the time and getting in the right state to really progress the biggest needle moving opportunities and tasks for your context and property business.

TIME TO FIND YOUR LEVERAGE 

This is a visual exercise for helping you get crystal clear about your projects and opportunities.

The aim of this exercise is to draw out clarity on where to allocate priority time for your property business by filling out this 2×2 grid. 

In a word doc or spreadsheet you can make a 2×2 square grid, and label it as follows:

High Impact
Low Impact
	Low Effort	High Effort

Here’s what to do – document every project, opportunity, task and typical weekly things you have to do in relation to your property investing business. Put it on a big white board if you have one, even an A4 piece of paper, but bullet point everything you have going on and allocate it into one of the squares according to filter of impact and effort for each item. 

So as an example, the HIGH IMPACT & relatively LOW EFFORT grid would include things like:

-adding a property under management for our council client

-30 mins daily learning for my personal development

-refinancing properties to release cash

Here are some other examples I have in the other categories:

LOW IMPACT & LOW EFFORT

-email management

-managing paper mail

LOW IMPACT & HIGH EFFORT

-Month end process

-leaving the house/office to deal with operational issues

HIGH IMPACT & HIGH EFFORT

-Sourcing and analysing new mixed use investment opportunities

-Training for Lands End to John O’Groats 😊 (super high effort physically and time wise but massive impact in raising money and awareness for Cancer Research).

THE SECRET to really rebooting your productivity when you’re feeling overwhelmed is to focus on the top left [ie HIGH IMPACT & relatively LOW EFFORT], (and often at the expense of everything else for a bit of time). 

You’re all busy people, many of you have kids, you’re not going to win because you worked the hardest, you’re going to win because you worked on the highest leverage stuff.

This is the mental advantage that successful property entrepreneurs have (and all entrepreneurs for that matter).

Your goal, if you choose to accept it 😁, is to commit to one major piece of work in the top 2 high impacting categories every single week.

When you know your low effort high impact things, you’ve got your key to waking up each day with crystal clarity to get started and be productive. 

By plotting all your projects and tasks on this grid you eliminate the brain fuzz and second guessing that plagues most people. Instead of wondering what to do, you can get straight into it by starting with the low effort high impact and then move clockwise round the grid to finish you day on the low effort low impact. [FYI I will often start my day with the high impact and high effort things as I prefer to ‘eat that frog’ first.]

This is your key to having more productive days, weeks and months. 

Now to lock in laser focus

IF YOU WANT TO LEVERAGE THIS TECHNIQUE, MAP OUT THE TIME IN YOUR DIARY TO REALLY MOVE THE NEEDLE  BY PRIORITISING THE HIGH EFFORT HIGH IMPACT AND LOW EFFORT HIGH IMPACT THINGS.

Will you complete your 2×2 grid this week?

I’ve been asked this question on several occasions, and in several slightly different ways – the question essentially being this, ‘how does someone starting out in property become good at it?’

My answer is always the same- it’s committing yourself to a degree of immersion and taking regular action to ‘practice’ your chosen property strategy. 

The follow up question is often then, ‘well how do I get really good?’ I am a firm believer that to accelerate your speed of learning and skill development, you need to get around others who are practising too, people who are both at the similar level and several steps in front. 

To the point of this post – how do you become unstoppable with your momentum in property? IMHO, that answer is COMMUNITY, COMMUNITY, COMMUNITY. 

And not just any community, but a community of people with shared values, ambition, drive and direction all learning, taking action, holding each other accountable and growing together. 

This last week was Mastermind week – 2 days in person (for the first time in over 15 months), and 2 days online. 

On each of these days I had the privilege and joy of facilitating group discussions that covered everyone’s key property objectives for the month. 

With each of these days, people from all over the UK (and some from overseas) worked together, supporting and challenging each other’s thinking and drawing on the collective intelligence that comes from good mastermind tables. I absolutely love these small group working sessions. From having not met each other prior to the day, delegates finished each day on a high with not only a clear action plan for the coming month but also new property friends and contact details for follow up exchanged. 

When you’re first stepping out into property investing, it can be a very lonely and uncertain time journey. I know from personal experience that the first 9-10 years of my property journey were incredibly isolated and lonely. Pushing through with grit to figure things out on my own, and not really having anyone to talk to about the rollercoaster that is property investing. 

Now having been part of a community of property investors and mentors for the last 5 years I only wish I could have been part of it from the beginning. 

I have heard a great analogy about being around the right network and community – I may butcher it a little but it was along the following lines. If we imagine that we have an inner thermostat that represents our current level in terms of how we show up, our results, our performance, our confidence etc. Well, if we want to raise that internal thermostat so that our results are better, the key way to do that is to level up our associations and spend more time with those people who’s thermostat is set higher than yours.

What are you doing to raise your internal thermostat this week?

Most property investors are familiar with HMO’s, I have a few myself. And many of us are operating serviced accommodation (SA), but we don’t see so many investors combining the essence of these two models in the commercial space – in other words commercial multiple occupancy (CMO) buildings offering serviced space. 

I remember reading a fascinating feature in the YPN magazine back in 2019 about this CMO strategy – the interview was with Scottish commercial investor, and podcast host, Jerry Alexander. With covid restrictions finally allowing a bit more movement, this week Chris and I drove over the bridge for a tour of Jerry’s CMO investments followed by an evening of amazing pizza and a game of Cash Flow. 

Better understanding the CMO model will absolutely help you see buildings differently. Whether that be looking at how to increase annual rent from a currently tenanted building, or considering different ways to optimise a vacant ‘problem’ building. Had the local baker not tenanted our commercial property, we certainly would have wanted to go down the CMO route to split up our 2500 sqft shop into smaller parts to multi-let the different sections. That will always be a fall back option for us though 😊. 

I’m a keen learner and note taker so scribbled copious notes over the day. Here is a selection of some key learns, distinctions and observations.

# I was fascinated to see how the demand for business centres has evolved from being predominantly professionals like Accountants, IFAs, Mortgage Brokers etc to businesses in the therapies space, beauticians, physios, tattoo artists, chiropractors and the like. These businesses change the thinking in terms of what you’d need to provide for access to the building ie not the standard 9am-6pm times. 

# The key thing to understand before jumping into this is to figure out if there is a place for a serviced office offering – in other words understanding what is currently available, what isn’t and what is there significant demand for. Eg, are there lots of large office spaces for let but no 2-4 person rooms with desks?

# One of the Business Centres we toured was previously managed by a national agent and when he took it on the running costs were incredibly high. However as Jerry pointed out, national agents aren’t great at managing serviced offices, but that’s where opportunities can be found. Jerry was able to reduce the cost base by over £30K under his own company’s management. 

# Larger spaces, although they may seem more daunting, offers significant economies of scale 

ie having 1 member of staff to manage the building, their salary is shared across many more rental spaces. 

# The concept of net lettable space ie if the building is 10,000 SQFT and 7500 SQFT is available for office space then 75% is the net space that can be monetised. So it raises the question how efficient can you make a building in terms of what is lettable vs the circulation space ie 75% 80%?

# Most of Jerry’s business centres had substantial parking areas and part of those were used for shipping containers to provide storage space to rent out. What a great idea! Especially as there are more and more small businesses with physical product offerings who need a bit of storage plus a bit of desk space – voila, there’s the ideal solution. [Note shipping containers are liable for business rates]. Shipping containers can be a great way to attract new small clients who start by needing some storage and later need to upgrade to take office space too. 

# As most reading this will know, the opportunity to add value to a commercial building comes from the key inputs of rent, length of lease and quality of tenant. While a CMO building may not have tenants on a long lease, as most would typically be on a 12 month license to occupy, the higher rent/SQFT will mean that net cash flow can be far higher than with having one tenant on a long term lease. With a significantly higher rent income, the CMO has the opportunity to value up higher, even taking into account the shorter license terms. The valuation of a CMO building is calculated as a multiple of the net licensed income.

# When it comes to business rates, a CMO building can have each office space rated separately and with the license holders being responsible for the rates, they can each benefit from small business rates relief.

# If a staff member can be afforded to run the serviced offices rather than using a national agent, it will generally create more ‘glue’ (as Jerry calls it 😁) with the clients and in turn higher rental rates and occupancy. 

# In buying well at the beginning, the back up plan/worst case (but acceptable scenario) for a CMO is that it’s let out as standard office space at the most competitive end of the market rate – and that still makes money because you bought it well. 

I love business and I love property, so the CMO strategy really strikes a chord. We already have a serviced accommodation business and I can see so many commonalities between CMO and SA – in short, they are both about understanding the client base you are serving and selling a serviced space solution- one is for working while the other is for living. Both will have similar types of cost base ie utilities, maintenance, staff, both can be operationally involved (unless you have staff or outsource management) but both have the potential to generate significantly higher net income from the same space from which a traditional long term lease would generate far less. 

What did your property business lead you to learn this week?

This week Chris and I took the day to do a site visit with key members of our power team to help us work through the latter stages of our diligence. 

With encouragement from the Government to ‘build, build, build’ we reckon there will be many investors already actively building new houses or interested in doing so. With that in mind we thought it might be helpful to share some thoughts on an opportunity we are looking at. 

A picture paints a thousand words, and a video even more, so here’s one we prepared earlier……😁

In this brief video we run through what we are considering in terms of development on the large garden plot of a detached bungalow. 

We met at the site with our Architect and Building Contractor which ensured we got the most out of our visit there, and what a valuable meeting it was. For example, in discussing our options with the site ie improving the existing property under permitted development (PD) and building 4-5 new houses on the grounds, we learned a number of key things. 

Here’s one of those things – the alterations to the existing bungalow would fall under PD, however, if we were to apply for planning permission, gain consent and then implement that planning (ie start) it would invalidate the PD on the existing building. So in short, strategic timing and having a good architect to guide you are essential. In a situation like this, our architect suggested, one approach could be to use PD and do a pre-app for the rest concurrently.

Here are just a few of the many learns/takeaways/avenues to explore further that came out of the site visit and meeting:

• You can have (develop) 5 houses max when accessing the plot from a private drive so no point going for anymore
• With shared ownership of a private driveway we’ll need to find and understand deed for rights of access (ie how many houses does it allow)
• We’ll need to enquire about possibility of moving a telegraph pole and power line – how, how much, who?
• Utilities wise we can enquire about air source heat pump grants and providers, can also look into solar and what available in terms of a feed in tariff
• Need to open a conversation with a neighbouring property owner about possibility of acquiring a small bit off their garden to improve access

• We’ll be exploring 3 options to compare cost, ROI and optimal all round outcome
• 1) buy the back bit of garden and reconfigure the 2 bed to 4 bed, then add 4 new houses
• 2) keep entrance the same, shave off the front bedroom and reconfigure bungalow, then add 4 new houses
• 3) keep entrance the same and demolish the house to then reorganise the whole site – factor in how much potential loss in cash flow from downtime vs the overall value uplift
• Key action to submit a pre-app through our architect

We’ve got a busy week ahead of us.

What have you learned from your property power team that you are actioning this week?

Has the events of this last year changed the shape or direction of your property portfolio?

The week just gone was monthly mastermind week so I had the privilege of observing and working with a broad spectrum of property investors over four super productive days. Hearing about and helping advise on so many different property business plans in a relatively compact period of time always leads me to reflect on my own portfolio and business plan I have with Chris. 

Whilst it would be too soon to claim we are fully ‘post pandemic’, the success of the vaccination programme is certainly turning the nation’s attention back towards optimism and growth. The last 14 or so months have thrown up unexpected challenges and opportunities for property investors. Being in this reflective mood after mastermind week, I hope that this post might encourage some healthy conversation and knowledge sharing in relation to property pivots, doubling down on what works or new ideas altogether. 

What I’ll do is lightly touch on some of the most common property strategies, reference a bit about what we’ve done and encourage thoughts from others around the country in relation to said strategy. 

#1 BTLs and HMOs

The first property investment portfolio that I created was all single lets and HMOs. Those properties were the vehicle that provided enough financial independence to leave employment in early 2014. I was incredibly grateful for them back then and even though I had fallen out of love with single lets for some time, the covid lockdown reminded me once more how grateful I am for those properties. Yes there were some notices given but on the whole those properties continued to provide great homes for people throughout the lockdowns, and in return continued to provide me with a decent cash flow. 

Whatever an investor might choose as their primary focus, I’m a firm believer that a portfolio of residential let properties should feature as part of their overall portfolio. 

On the HMO front my multi-let professional properties fared surprisingly well however a couple of my student lets in Edinburgh did take a hit with a period voids and the need to lower rents for the first few months of a tenancy to incentivise the re-lets. Fast forward to now however and that student let market is thriving again, with even the summer months being taken on (I’m guessing that is in part to do with students wanting to have a summer of fun after so many months locked down with their parents). 

GOING FORWARDS

I was already starting to feel the love again for single lets in 2019 and we (Chris & I) have continued to invest in this space by developing flats in the upper parts of a shop (mid build as we speak) and adding family homes to our portfolio that are serving the Rent to Buy market and the long term vanilla BTL market. If anything, I think the pandemic has only further validated the value of having good residential assets in the portfolio. We will continue to allocate a portion of our focus and funds into adding alternate RTB and BTL assets. 

What about you, have your views shifted in any way when it comes to BTLs and HMOs?

#2 SERVICED ACCOMMODATION

When we first went into lockdown, approx 35% of our SA portfolio served the public sector (for Emergency Accommodation) whilst the remaining 65% was all private sector, and split between predominantly contractors and a good amount of tourism bookings. So when lockdown kicked in that 65% of the portfolio naturally dropped off a cliff as the Easter bookings had to cancel and some of the contractors couldn’t continue on site. Thankfully we had built solid foundations with our local authority over the previous year (that choice was made to introduce healthy diversification of bookings) so we were able to quickly pivot towards the Emergency Accommodation sector at the end of March with the first lockdown. We have served the councils needs effectively and as a result now have 70% of our portfolio serving the council, and their demand has remained steadfast throughout the various lockdowns. 

GOING FORWARDS

We are working hard to secure a place on the key supplier list with the council, alongside working the contractor bookings and a summer of healthy summer holiday bookings with a select few properties. 

What about you? How has the pandemic altered your approach to SA? Or if you’re just getting started with SA, what is your primary guest audience?

#3 COMMERCIAL

Aside from our SA commercial property, our first ‘true’ commercial property had just come into our ownership a few months prior to lockdown. We initiated conversations with a local independent baker pre-lockdown and following our refurb (somewhat delayed over lockdown) the formal lease commenced in October and both sides are very happy with the outcome. 

GOING FORWARDS

In terms of commercial going forward we are a little less attracted to the big high streets having seen how they were affected and how they have played severe hardball with landlords in terms of paying any rent. Pre lockdown we were starting to look into light industrial for trade counter providers – a space we’d still love to get into but now finding the price for vacant industrial has risen sharply while the rents haven’t. Still great contenders for pension investments however. 

If commercial property is your main focus, how has your strategy changed in terms of the types of property and end tenants you may be targeting?

#4 FLIPS

Flips have never really been part of my plan, perhaps because I still feel I’m building the asset base. I did flip a property back in 2012 in Edinburgh and in hindsight wish I’d kept it (I would have done far better taking the capital gain out of a refinance tax free and keeping the cash flow). 

GOING FORWARDS

The occasional flip is now however on the horizon. I didn’t think I would but with the appetite from buyers as it is for certain types of property along with the rising price of the properties I’d like to buy and hold, I figured replenishing the capital pot needed to ‘leave some money in’ the properties I want to hold, would be a big help. 

What about you – curious to know if flips are already working well for you now or if you plan for a flip to feature this year?

#5: DEVELOPMENT

In it’s broadest terms, I’ll use ‘Development’ to refer to adding value to existing resi, commercial conversions and new build. 

So this is a seriously interesting area. It;s where many of us want to expand after progressing through a few more simple deals and it’s certainly where Chris can leverage his building experience. For us, this is all about developing to serve an end user audience we have validated in some way so it helps mitigate development risk.

GOING FORWARDS

Anything we develop would need to feed our existing property business avenues of serviced accommodation, BTL or possibly rent to buy. We are just in the latter stages of diligence on a site that presents an opportunity to reconfigure an existing house for SA, whilst also adding a few new build units to serve the same contractor SA audience. We are very excited about the potential of that. 

With our Government promoting ‘Build, build, build’ and reforms in planning policy, does development of some sort feature for you?

To close, I really hope this post sparks some interesting discussion and knowledge sharing – so, how has the events of this last year changed the shape or direction of your property portfolio?