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Rent-To-Rent Service Accommodation Basics · The Property Unleashed Podcast

• 0:10
  SPEAKER_00: Hello and welcome to our Wednesday session, our fortnightly session on all things rent to rent, service accommodation, HMOs, supported living.
• 0:22
  SPEAKER_00: You name it, we can talk about it here.
• 0:24
  SPEAKER_00: It's great to have you on.
• 0:25
  SPEAKER_00: If you have any questions, any deals that you're looking at, then please feel free to ask in the chat.
• 0:32
  SPEAKER_00: And if we need to have a chat, we can as well.
• 0:34
  SPEAKER_00: This is a fortnightly session where I help the community here on service accommodation, as I say, HMOs, rent-to-rent, purchase lease options, supported living social housing as well.
• 0:45
  SPEAKER_00: Today I'm going to talk a little bit about rent-to-rent strategy with service accommodation.
• 0:50
  SPEAKER_00: You might already know these bits and bops, but I'm just going to put my own spin on those as well and help everybody here.
• 0:56
  SPEAKER_00: If you're looking at the strategy, which is, of course, rent to rent, and you're looking at doing service accommodation, it's a great way to build up cash flow.
• 1:04
  SPEAKER_00: It's a great way to build up a portfolio.
• 1:05
  SPEAKER_00: It's also a great way to sell opportunities onto other investors, but you need to understand the strategy yourself as well.
• 1:13
  SPEAKER_00: So, what is rent to rent?
• 1:15
  SPEAKER_00: Well, probably you guys and girls know this by now, but it's where you lease a property from a landlord, you agree a rental property price, you're going to pay that guaranteed rent each and every month.
• 1:25
  SPEAKER_00: And you can do these deals with landlords and of course with letting agents as well.
• 1:30
  SPEAKER_00: You normally fix the terms three to five years, and you will use a management agreement or a corporate let lease agreement on these.
• 1:38
  SPEAKER_00: But mainly you can use a management agreement when you're doing a rent-to-rent deal.
• 1:43
  SPEAKER_00: Then obviously, once you've got the properties, normally it's a buy-to-let property that would be on the market.
• 1:49
  SPEAKER_00: So it's probably, if anything, it might be part furnished, but I doubt it'll have everything in there.
• 1:54
  SPEAKER_00: So then you would be looking at furnishing the property, dressing it up, getting it ready for photography, and of course, making sure that the property is to a really high standard.
• 2:04
  SPEAKER_00: What you've got to remember with service accommodation is the serviced bit in the title, because we are offering a service, and that needs to be a VIP service.
• 2:15
  SPEAKER_00: So we take a normal property, we make it into a premium service accommodation short-term rental unit.
• 2:21
  SPEAKER_00: Then it's all about making sure that it operates correctly and that you are getting bookings because at the end of the day, without any bookings, you're not going to make any money, are you?
• 2:31
  SPEAKER_00: So the operating could be done by your good self, it could be done by a service accommodation management company, or you could hire a virtual assistant, a VA, to do it for you as well.
• 2:41
  SPEAKER_00: And there's some great companies out there.
• 2:44
  SPEAKER_00: The market, they will then put the property on the market.
• 2:48
  SPEAKER_00: Uh, and of course, platforms like Booking.com, Airbnb, AirD, yeah, Airbnb, and things like that.
• 2:55
  SPEAKER_00: And of course, you'll be looking to either get holiday makers or contractors in your area on a nightly or weekly basis.
• 3:03
  SPEAKER_00: Then, of course, the profits, profits that you make is great ways that you can pay your guaranteed income.
• 3:09
  SPEAKER_00: You need to be covering the running costs as well, which is your utility bills, any other cancel taxes that you might have, although you want to be trying to get the property on small business rates after you can as soon as you can, sorry, after 140 days, and the revenue is there.
• 3:24
  SPEAKER_00: So corporate lets versus APTs.
• 3:26
  SPEAKER_00: Now, APTs used to be ASTs, that is assured a periodic tenancies agreements that you would use now if you had a buy to let, but you would never use those on a serviced accommodation.
• 3:37
  SPEAKER_00: You would use a licensed agreement.
• 3:39
  SPEAKER_00: So a standard EPT, easy for me to say, getting used to that still, is for individual tenants.
• 3:46
  SPEAKER_00: You wouldn't use these, as I'm saying.
• 3:48
  SPEAKER_00: This is why there's little red crosses there.
• 3:50
  SPEAKER_00: But these agreements is between the landlord and the individual person that's living in the property.
• 3:55
  SPEAKER_00: Subletting is prohibited with an APT, so that's why you do not use those sorts of contracts when you're doing any rent-to-rent deals, because it forbids the tenant from subletting the property or running.
• 4:06
  SPEAKER_00: Now you can use, or you used to be able to use an AST and have the right to sublet built into it.
• 4:15
  SPEAKER_00: And the APTs, you can do the same, but I wouldn't do it on an APT agreement because obviously they aren't as secure as a management agreement or a commercial lease agreement.
• 4:26
  SPEAKER_00: There is obviously heavy regulations around residential properties, residential house laws, and making eviction slower and more difficult, which is why you wouldn't use one of these.
• 4:35
  SPEAKER_00: And when somebody stays in your serviced accommodation property, you will use a licensed agreement with them rather than an APT or anything like that.
• 4:45
  SPEAKER_00: So you and the landlord would use a management agreement or a commercial lease agreement or corporate let agreement with your people that are staying in the properties.
• 4:55
  SPEAKER_00: You'll use a license agreement, which is on a basically a night-by-night basis.
• 5:00
  SPEAKER_00: Very much the same as when you go to a hotel, you sign basically a licensed agreement when you stay there and they want a signature off of you.
• 5:07
  SPEAKER_00: That is what you would do the same on service accommodation.
• 5:10
  SPEAKER_00: A lot of people get this wrong, in which case, then people can become tenants in situ.
• 5:15
  SPEAKER_00: So you need to be very careful with that.
• 5:17
  SPEAKER_00: Equally, you want to make sure that your licensed agreements don't go longer than 28 days.
• 5:24
  SPEAKER_00: So if you had a six-month booking, I would do, and we do do, a new licensed agreement every 28 days.
• 5:31
  SPEAKER_00: Somebody has to re-sign the agreement and everything.
• 5:34
  SPEAKER_00: Otherwise, after 30 odd days, they can become a tenant and situation.
• 5:38
  SPEAKER_00: It's harder to get them out if anything happens or goes wrong.
• 5:42
  SPEAKER_00: An APT is also short-term, typically renting for six to 12 months.
• 5:47
  SPEAKER_00: Corporate let agreements is a business-to-business agreement.
• 5:50
  SPEAKER_00: It's a commercial agreement between the landlord and you or your limited company.
• 5:56
  SPEAKER_00: You have the explicit rights to sublet.
• 5:59
  SPEAKER_00: And if you think about a lot of people say, oh, you can't sublet, sublet's illegal, it's not illegal.
• 6:04
  SPEAKER_00: If you ever worked or have a property that you've given to a letting agent and they have let the property for you, if you read their management agreement, it says we are given permission and the right to sublet this property on the landlord's behalf.
• 6:20
  SPEAKER_00: That is what we are doing.
• 6:21
  SPEAKER_00: Okay.
• 6:22
  SPEAKER_00: That's why it's so, so important.
• 6:23
  SPEAKER_00: And that's why I wanted to talk about it today that we get the right agreements in place.
• 6:28
  SPEAKER_00: You'll have commercial terms in there, like I say, because this is a business-to-business agreement.
• 6:32
  SPEAKER_00: So it's governed by standards of residential tenancy laws and terms of negotiation freely between both businesses, i.e., it means that you can obviously negotiate the rents, you can negotiate the terms in the lease as well, in your agreements and things.
• 6:49
  SPEAKER_00: So it's open for you to be able to talk about things.
• 6:52
  SPEAKER_00: But if you break any of the terms in your management agreement or your commercial lease agreement, that does actually breach the contract.
• 7:00
  SPEAKER_00: And actually, the landlord is within their rights to take that property back.
• 7:05
  SPEAKER_00: Obviously, these contracts, if you're doing a three to five year deal, are the ones you want to be using because they will be for three to five years with potential break clauses in there as well.
• 7:18
  SPEAKER_00: Now, I help a lot of my students in my community and in our trainings and things that I work with, making sure that we use the right agreements in the right time at the right place, because you've got to set yourself up, as I always like to say, for success in the right manners to begin with.
• 7:34
  SPEAKER_00: So you're gonna get out there, you're gonna start pitching to landlords, you know, you want to be a professional property management solution to their property problems.
• 7:42
  SPEAKER_00: And that's what we always say is we're looking for a problem.
• 7:45
  SPEAKER_00: If a landlord has a property and they can let it out as a buy-to-let and they're happy to do so, we can obviously ask them if they would like to use our services, they'd like to let us let it as a service accommodation, but they're not always going to do so.
• 7:58
  SPEAKER_00: We're looking for people whose properties may be a little bit sticky, maybe they're fed up with it, maybe they want a total hands-free, total hands-free, hassle-free solution to their problems.
• 8:10
  SPEAKER_00: That's the sort of people that we're looking for.
• 8:13
  SPEAKER_00: So a great thing to be able to talk about with people is the guaranteed income.
• 8:17
  SPEAKER_00: So whether the property has anybody in it or not, we are going to pay you a monthly fee.
• 8:22
  SPEAKER_00: You're going to have zero voids.
• 8:24
  SPEAKER_00: So, as I say, that is a great selling point.
• 8:27
  SPEAKER_00: Now, sometimes people say, well, the rent they want is too much and the numbers don't stack.
• 8:32
  SPEAKER_00: Well, run the numbers so that they do stack.
• 8:35
  SPEAKER_00: And if the rent that you're going to offer is slightly less than what they're expecting, these are some of the points that you want to put to them to sell what you're going to do and how you're going to help them.
• 8:46
  SPEAKER_00: So offering a guaranteed rent should come at a bit of a price to them.
• 8:50
  SPEAKER_00: So you shouldn't be paying over the odds on rents.
• 8:53
  SPEAKER_00: If you are, then the landlord's basically winning.
• 8:56
  SPEAKER_00: You should be paying slightly less because yours is guaranteed.
• 8:59
  SPEAKER_00: There are no voids.
• 9:00
  SPEAKER_00: And with that, should come a bit of a price.
• 9:02
  SPEAKER_00: There's no arrears to sort out because you're going to be paying that rent on a month-on-month basis.
• 9:08
  SPEAKER_00: So they're not going to have to worry about that.
• 9:10
  SPEAKER_00: And they get the long-term security over three to five years of that contract.
• 9:15
  SPEAKER_00: So, what you want to do is if your rent you're going to offer the landlord is going to be slightly less than what they're expecting is when you put your offer to the landlord, you want to put your offer over the lease term.
• 9:29
  SPEAKER_00: So, yes, you will tell them what it is monthly, but let's say, for argument's sake, this property, they want 1500 quid a month on it.
• 9:36
  SPEAKER_00: It only works at 1200 quid for us.
• 9:39
  SPEAKER_00: Then I would put, we will offer you a monthly rent of 1200 pounds, but then tell them, and that will be a total of whatever it is over five years.
• 9:49
  SPEAKER_00: While I'm doing this, I can't think of the maps and everything like that, but it could be like 50,000, 60,000, 70,000 pounds that they're going to make over the five-year term, in which case, then that looks a lot better than it does just telling them that you're going to pay them less than these expected.
• 10:03
  SPEAKER_00: Also, tell them we're going to keep your property to the highest standard.
• 10:07
  SPEAKER_00: We're going to look after it, we're going to keep it in a pristine condition.
• 10:10
  SPEAKER_00: Your property will become a bit of a show home because that's what our clients expect on a night-by-night basis.
• 10:16
  SPEAKER_00: So the value of your property is that over five years, if you were to let it to a tenant, you would probably have to put new carpets in there, decorate the place, you probably have to put some money back into the property.
• 10:27
  SPEAKER_00: After five years of with us, we'll hand it back to you in the condition that you give it to us.
• 10:32
  SPEAKER_00: So if you give it to us in a high standard condition, you will get it back.
• 10:36
  SPEAKER_00: So it's not going to cost you any money there.
• 10:39
  SPEAKER_00: Plus, we take care of all minor maintenances each and every month, which of course can soon build up.
• 10:45
  SPEAKER_00: Now I like to say that we'll take care of anything,£100 or less in a month.
• 10:50
  SPEAKER_00: Anything over that might still be the landlord's responsibility.
• 10:53
  SPEAKER_00: But we will also look after the property.
• 10:55
  SPEAKER_00: We will take care of any wear and tear as the property goes.
• 10:58
  SPEAKER_00: So if the hallway, the carpets, or the flooring gets a bit grubby, we'll replace that after a certain time, making sure that we're replacing it in a manner that the landlord would like so that we don't have to potentially replace it again when we give the property back.
• 11:13
  SPEAKER_00: And it's a hands-off experience.
• 11:15
  SPEAKER_00: It's one of the most hands-free strategies that as a landlord you can do.
• 11:20
  SPEAKER_00: You need to be doing this with a trusted party.
• 11:22
  SPEAKER_00: Of course, if they're using us, then they are using a trusted party.
• 11:25
  SPEAKER_00: But it can it can work great because there's no late-night calls, there's no problems or anything like that.
• 11:31
  SPEAKER_00: Now, there will be certain times where there could be a problem, but you will basically, as a rent-to-renter, get out there, deal with the problems, sort them all out, and then tell the landlord about it later on.
• 11:42
  SPEAKER_00: You can obviously make sure that the property is up to the compliances that it needs to be as well, or help the landlord to maintain those compliances.
• 11:51
  SPEAKER_00: And of course, they're not getting charged any fees, they're not getting charged a management fee, they're not getting charged the minor maintenance fees, they've got no voids.
• 11:59
  SPEAKER_00: So there's a lot for them to be able to save money on.
• 12:03
  SPEAKER_00: And that all needs to be taken into account when you're putting these offers across.
• 12:07
  SPEAKER_00: So even if you're looking at finding these opportunities to sell, because you're a deal sourcer or something like that, or you're going to find these opportunities and keep them for yourself.
• 12:17
  SPEAKER_00: You need to be making sure that when you're pitching to landlords and things, that you are talking about these highlights.
• 12:23
  SPEAKER_00: Really give them these highlights.
• 12:24
  SPEAKER_00: Don't expect them to just know this.
• 12:27
  SPEAKER_00: Put the highlights out there and really help them.
• 12:29
  SPEAKER_00: So the specific compliances, obviously, the landlord needs to make sure that they've got a mortgage that you're allowed to do this on.
• 12:37
  SPEAKER_00: Okay.
• 12:38
  SPEAKER_00: Because when you do a corporate let agreement or you do a commercial let agreement, it might not be in the terms of their mortgage.
• 12:46
  SPEAKER_00: Now, most of the times in a landlord's mortgage is because it is a landlord's property, it's not a residential property that they're living in and they're going to move out of and give to you.
• 12:55
  SPEAKER_00: If it's on a residential mortgage, you won't be able to do this without consent to let.
• 12:59
  SPEAKER_00: But if it's on a buy-to-let mortgage and you want to do service to accommodation, again, you might not be able to do short-term rentals on a buy-to-let mortgage.
• 13:07
  SPEAKER_00: They now have specific mortgages for service to accommodation.
• 13:11
  SPEAKER_00: But what the landlord can do is ask their mortgage company if they can have consent to let it as a short-term rental.
• 13:19
  SPEAKER_00: Now, they might come back and say yes, in which case, happy days, we can do a deal.
• 13:23
  SPEAKER_00: They might come back and say no, in which case we haven't cost us any money.
• 13:26
  SPEAKER_00: We haven't set a property up, only to be told that we can't do it.
• 13:29
  SPEAKER_00: But we need to make sure that it's got the right mortgage or the right mortgage terms on it.
• 13:33
  SPEAKER_00: Now, if it doesn't have a mortgage, happy days, don't worry about it at all.
• 13:37
  SPEAKER_00: The other thing that you need to look watch out for is any leasehold caveats on the property as well.
• 13:43
  SPEAKER_00: Now, if you're looking at flats or you're looking at a leasehold property, is there anything in the lease that says no short-term rentals?
• 13:50
  SPEAKER_00: More and more leasehold properties or flats and things are having drawn up and written into their leases that are not allowed short-term rentals because it might upset the people living in the uh other flats and things with everybody coming and going.
• 14:05
  SPEAKER_00: What you will also find is though, there are a lot of savvy developers out there now that are building blocks of flats specifically for service accommodation.
• 14:14
  SPEAKER_00: So if you happen to take a rent-to-rent on in one of those, you've got no problems.
• 14:18
  SPEAKER_00: They will say that nope, it's all right, you can do service accommodation in this area.
• 14:22
  SPEAKER_00: But we need to make sure again that we're checking any head leases before we sign any agreements.
• 14:28
  SPEAKER_00: Now, you need to make sure that the insurance is right as well.
• 14:31
  SPEAKER_00: The landlord might just have buy-to-let insurance.
• 14:34
  SPEAKER_00: Building basically, they don't always need content.
• 14:37
  SPEAKER_00: If we're filling it, we'll get content insurance.
• 14:39
  SPEAKER_00: But their building insurance wants to cover short-term lets, service accommodation if we're using it as that.
• 14:44
  SPEAKER_00: So the landlord does need to know what we're doing, and we should always tell the landlord what we're going to do with their property.
• 14:51
  SPEAKER_00: But they need to make sure it's the right insurance because if they're if they've got simple buy-to-let insurance, something goes wrong, and the insurance company come out and say, that isn't a buy-to-let, that's a short-term rental.
• 15:00
  SPEAKER_00: Your insurance is now none and void.
• 15:03
  SPEAKER_00: We do not want to be doing that sort of thing.
• 15:05
  SPEAKER_00: And of course, make sure if there's any local planning in the area.
• 15:09
  SPEAKER_00: When it comes to HMOs and things, you've probably heard of Article 4 directives, and that restricts you taking a C3 residential property and making it a C4 or a Sue Gemris without planning permission.
• 15:20
  SPEAKER_00: At the moment, there is nothing in place for service accommodation, although there is selective sort of licensing and compliances in certain areas as well.
• 15:30
  SPEAKER_00: So go to your local council website and see what they've got there.
• 15:33
  SPEAKER_00: Some councils are bringing in the 90-day rule, basically, or 90 nights, should I say, where you can only let a property for 90 nights in in one time.
• 15:46
  SPEAKER_00: Just see whether or not that's the areas that you're working in.
• 15:49
  SPEAKER_00: Because if it is, you need to look at other areas, okay?
• 15:51
  SPEAKER_00: You can get around these things, but let's not set ourselves up for failure.
• 15:55
  SPEAKER_00: Let's make sure we're doing this in the right areas and setting ourselves up for success.
• 16:00
  SPEAKER_00: So the cash flow and ROI that you'll be looking at, when you're literally doing service to accommodation, there's certain things that you need to take into account.
• 16:08
  SPEAKER_00: Now, I started when I was doing rent to rent, I did it with HMOs because I was going for pre-existing HMOs, and I was basically looking for good, high-quality ones as well.
• 16:18
  SPEAKER_00: So I didn't have to put any money into them.
• 16:20
  SPEAKER_00: The most I've ever spent on an HMO deal was 900 pounds, and that was for a couple of carpets and some paint.
• 16:25
  SPEAKER_00: And I managed to get nine HMO deals in well, less than 12 months, and that more than replaced my corporate wage.
• 16:33
  SPEAKER_00: Subsequently, from that, I actually had a few landlords that had some single let properties, and they were like, What can we do with these?
• 16:39
  SPEAKER_00: Initially, I was like, Well, I don't really need single lets.
• 16:43
  SPEAKER_00: But they said, Well, if you're managing our HMOs, we wouldn't mind just having it all managed under one company, so to speak.
• 16:49
  SPEAKER_00: So we took them on and actually started doing service to accommodation.
• 16:52
  SPEAKER_00: That's how I got into service accommodation.
• 16:54
  SPEAKER_00: So we did start taking on single lets for service to accommodation, but I started with the HMOs.
• 16:59
  SPEAKER_00: And I always think it's good to have a bit of both just in case anything stops at any time.
• 17:03
  SPEAKER_00: But when you do a rent to SA deal, there are going to be some specific setup costs.
• 17:07
  SPEAKER_00: Now, some of these can be a bit more, some of these can be a bit less, depending on the property, depending on what you're doing.
• 17:13
  SPEAKER_00: But obviously, you want to make sure you've got the first month's rents in place.
• 17:16
  SPEAKER_00: Now, it could be 1200 pounds, it could be 800 pounds, it could be 500 pounds, it could be 1800 pounds, but it's something that we need to find out about, and that's what I'm trying to get across here.
• 17:25
  SPEAKER_00: You might have to pay a deposit.
• 17:27
  SPEAKER_00: I don't pay deposits personally, but I have seen other people that will pay deposits.
• 17:32
  SPEAKER_00: If the deal was a really good deal, it's going to make me a lot of money.
• 17:35
  SPEAKER_00: Would I would I walk away over paying a deposit?
• 17:38
  SPEAKER_00: Well, I'd still try my best not to pay it because it's a business-to-business agreement.
• 17:42
  SPEAKER_00: I'm not a tenant.
• 17:43
  SPEAKER_00: I always try and say to people, I'm going to pay your guaranteed rent at the end of the month like a letting agent, but because you want deposit and we don't pay deposits, I'll pay it on the first, so I'll pay the rent in advance on the first of the month rather than paying it at the end.
• 17:57
  SPEAKER_00: So there's certain tactics and skills and tools that you can use that uh we help people with as well.
• 18:03
  SPEAKER_00: Obviously, you can have furniture, you're gonna have dressing depending on the size of the property.
• 18:07
  SPEAKER_00: That could be from you know 3,000 pounds, it could be up to 8,000 pounds depending on the size of the property.
• 18:12
  SPEAKER_00: Just don't panic and big gulp to say, Well, I haven't got that sort of money, so how am I gonna do this sort of deal?
• 18:18
  SPEAKER_00: You can lease furniture, you can go on Facebook Marketplace, you can find some great little deals.
• 18:23
  SPEAKER_00: It depends, you can shop around.
• 18:25
  SPEAKER_00: It doesn't always have to cost you the ends of the earth to do these.
• 18:28
  SPEAKER_00: You're gonna have to put some locks in there, some some keyboxes, any any sort of a tech.
• 18:33
  SPEAKER_00: I would put device on the heat in, use up, use a hive device or something that you can control the heating remotely as well, just in case anybody leaves it on.
• 18:41
  SPEAKER_00: You are gonna have to get a professional photographer in there.
• 18:44
  SPEAKER_00: Don't just rely on your smartphone or as good as they are, get it, get professional photography done.
• 18:50
  SPEAKER_00: And of course, any uh legal compliances, any any setups there.
• 18:53
  SPEAKER_00: So contracts and things like that.
• 18:55
  SPEAKER_00: If you don't have any of those, you're gonna need to go out there and get some contracts and things.
• 18:58
  SPEAKER_00: So, all in all, you know, this uh little deal here, if it's with a two-bedroom apartment or something like that, might cost about 6,700 to set up.
• 19:07
  SPEAKER_00: Then you would be looking at at least hopefully a 70% occupancy.
• 19:11
  SPEAKER_00: Now, when you're actually stacking deals, and this is something I go through with people all the time, when you're stacking a service accommodation deal, you want to look at 50% occupancy and see whether or not with your numbers you break even.
• 19:24
  SPEAKER_00: If you don't break even, i.e.
• 19:26
  SPEAKER_00: at 50% occupancy, all of your costs are covered, then it's uh something that you need to really look at.
• 19:33
  SPEAKER_00: Because if it takes you 60% to break even, that's no good because you might only get a 70% occupancy, in which case you're only making 10% profit.
• 19:42
  SPEAKER_00: It's not worth doing.
• 19:44
  SPEAKER_00: The guaranteed rent needs to be taken into account.
• 19:46
  SPEAKER_00: Obviously, coming off of your gross SA revenue.
• 19:49
  SPEAKER_00: You can have your OTA fees, you can have cleaning and laundry because you are.
• 19:53
  SPEAKER_00: Uh it's a fact.
• 19:55
  SPEAKER_00: You're gonna have to pay the utilities and the Wi-Fi and everything, and of course, any other software and insurance.
• 20:00
  SPEAKER_00: So you might have some insurance for the furniture and everything there, and you will have some sort of software that you'll be using as well.
• 20:08
  SPEAKER_00: But your monthly profit could be around 600 pounds.
• 20:11
  SPEAKER_00: Now, it doesn't take many of these to start making a decent, decent chunk of money, but you do need to be aware of these things.
• 20:19
  SPEAKER_00: It is going to cost you some money to be able to get out there and to do.
• 20:22
  SPEAKER_00: So let's leave you here with the pros and cons.
• 20:24
  SPEAKER_00: The pros, low capital requirement.
• 20:26
  SPEAKER_00: So at the end of the day, you don't have to find stamp duty, you don't have to find massive deposits, you don't have to buy the property.
• 20:32
  SPEAKER_00: You can use rent to essay to try the areas out.
• 20:36
  SPEAKER_00: Right now, because I do a lot of rent to rent, I know exactly where HMOs work really well in my area.
• 20:42
  SPEAKER_00: I know exactly where service accommodation works really well, and I also know where it doesn't work so well as well, because not every deal I've done has been a really good deal.
• 20:50
  SPEAKER_00: But you've got low capital in there, you only need about 5, 8k or something like that to sort this out.
• 20:55
  SPEAKER_00: I have done deals where I've joint ventured with the landlord as well, and this was on three flats.
• 21:00
  SPEAKER_00: I did two then.
• 21:01
  SPEAKER_00: That's this was on three flats, and basically we went 50-50 on the furniture, they supplied the property, we supplied the management, and we split the profits 60-40 in their favor.
• 21:11
  SPEAKER_00: It is their property after all, but we're very happy with that, and that's after all costs.
• 21:17
  SPEAKER_00: You can set these up relatively quickly as well, so you don't have to worry about you know buying the property, waiting for all the conveyance in and everything.
• 21:24
  SPEAKER_00: You can actually get out there, sign a lease, get it furnished, get it live on the platforms within a few weeks.
• 21:30
  SPEAKER_00: It's extremely high ROI once it gets going.
• 21:33
  SPEAKER_00: It can take a few months to get going.
• 21:34
  SPEAKER_00: So do make sure you've got a bit of capital for that.
• 21:37
  SPEAKER_00: And because the initial investment is low, achieving a great ROI 100% plus is very, very achievable.
• 21:43
  SPEAKER_00: And of course, it's highly scalable.
• 21:45
  SPEAKER_00: Not only can you do rent to SA, so if you're really interested in doing SA as a platform and things, what I highly recommend is that you learn how to do the SA management as well and offer rent to SA or just service accommodation management at a percentage.
• 22:00
  SPEAKER_00: Again, this is something that I've shown a lot of my clients and students how to do and teach them how to do in our community all the time because I think this is a great way for you to be able to really maximize your profits.
• 22:11
  SPEAKER_00: If you're already managing your own essays, taking on a few other essays that don't cost you any setup fees, don't cost you those thousands of pounds because the landlords will give you those properties in a ready-to-go position.
• 22:24
  SPEAKER_00: All you've got to do basically is lease is advertise the properties, manage the properties, but you can make three or four hundred pounds off of these.
• 22:31
  SPEAKER_00: You won't make as much as you do with rent to essay, but then you haven't got the liabilities, you haven't got to pay utilities, you haven't got all of that.
• 22:38
  SPEAKER_00: All you've got basically is profits coming your way.
• 22:41
  SPEAKER_00: So that is something that I don't see anybody else showing or teaching anybody like that.
• 22:45
  SPEAKER_00: So that's what we do in my community, and that's what we do in our trainings and things.
• 22:49
  SPEAKER_00: And if you need any help with that, then just ask me a question or something like that.
• 22:52
  SPEAKER_00: Send me a message or ask in in the community here, and I'll help you point in the right direction with that.
• 22:58
  SPEAKER_00: But it can be a great way to do it.
• 22:59
  SPEAKER_00: But again, we've got to do it right.
• 23:01
  SPEAKER_00: We've got to do it in the right way.
• 23:02
  SPEAKER_00: Now the cons, it's always bad.
• 23:05
  SPEAKER_00: No capital growth.
• 23:06
  SPEAKER_00: Obviously, we don't own the property, so we're never going to get any raise in the capital there unless we've maybe done a purchase lease option.
• 23:14
  SPEAKER_00: We can be, of course, vulnerable to any uh regulations, you know, local planning laws, changes.
• 23:19
  SPEAKER_00: If it, if I I put article four there, but article four is basically for HMOs, but they might bring in an article five or something like that for service accommodation in the future.
• 23:29
  SPEAKER_00: Something is on the horizon, something will be coming.
• 23:32
  SPEAKER_00: But if we set ourselves up and we're compliant, we've got everything in place, we're doing things in the right manner, like a property professional should be doing, then we have nothing to worry about when it comes to that.
• 23:43
  SPEAKER_00: Obviously, the lease will end.
• 23:45
  SPEAKER_00: So, you know, at the end of those terms, the landlord might want the property back, in which case you're not making any more money from that asset.
• 23:51
  SPEAKER_00: But hey, at the end of the day, I look at myself as a property trader.
• 23:55
  SPEAKER_00: So when I'm doing these, it's a business.
• 23:56
  SPEAKER_00: I'm looking for cash flow.
• 23:58
  SPEAKER_00: If you're doing rent to rent, you're doing management or anything like that, it's a cash flow business.
• 24:02
  SPEAKER_00: So we're not worried about capital growth.
• 24:04
  SPEAKER_00: We're not worried about what happens at the end of the term.
• 24:07
  SPEAKER_00: I've had landlords continue with me.
• 24:08
  SPEAKER_00: I've had landlords want their properties back.
• 24:10
  SPEAKER_00: You just go out there and get more properties.
• 24:12
  SPEAKER_00: But you get as many as you need to give you the life that you want.
• 24:16
  SPEAKER_00: Rather than, I mean, initially I was like, I want hundreds, hundreds of properties.
• 24:19
  SPEAKER_00: And then I actually realized I only need a couple of handfuls of properties without loads and loads of hassle to really give me the time, freedom, and the life that I want.
• 24:27
  SPEAKER_00: And that's what I do now.
• 24:28
  SPEAKER_00: And of course, fixed liability, you must pay the landlord rent every month when you're doing rent to SA.
• 24:34
  SPEAKER_00: So even if the bookings drop off and you will have some quiet months, you won't make money on every single month.
• 24:40
  SPEAKER_00: That's something that you need to be mindful of when it comes to service accommodation.
• 24:44
  SPEAKER_00: Even if you own the property, you might, but predominantly like January potentially, February time might be slow in certain areas.
• 24:52
  SPEAKER_00: You might get your contractors, you might be able to tick over.
• 24:54
  SPEAKER_00: But what you want to do is not gauge a service accommodation on a month-on-month basis.
• 25:00
  SPEAKER_00: You want to actually gauge a service accommodation over 12 months.
• 25:05
  SPEAKER_00: Over 12 months, what is it gonna make me rather than what's it gonna make me one month?
• 25:09
  SPEAKER_00: Because one month will change to the next month.
• 25:12
  SPEAKER_00: So you need to be mindful of that.
• 25:14
  SPEAKER_00: That is why I quite like having HMOs because I know month on month what I'm gonna get, and I like that sort of thing.
• 25:20
  SPEAKER_00: Service accommodation is very much some months it can be high, some months it can be okay, some months it might be a bit lower.
• 25:26
  SPEAKER_00: So you need to account for that in your property business and make sure you've got the relevant pots so that you can account for that as well.
• 25:34
  SPEAKER_00: So I just wanted to cover some of those things off there.
• 25:37
  SPEAKER_00: Now you you might be saying, Well, I know all of this.
• 25:39
  SPEAKER_00: If you have, maybe it's a handy reminder.
• 25:41
  SPEAKER_00: If I've helped you with anything there, then that is great.
• 25:44
  SPEAKER_00: But I always like to try and start these sessions with a bit of a presentation to help to help people.
• 25:51
  SPEAKER_00: So if you have any questions now, then do feel free to stick them in the chat box.
• 25:56
  SPEAKER_00: That's what these calls are all about.
• 25:58
  SPEAKER_00: We thanks, great presentation.
• 26:00
  SPEAKER_00: Three questions, please love it.
• 26:02
  SPEAKER_00: Keep them coming, keep them coming.
• 26:03
  SPEAKER_00: It's what it's all about.
• 26:04
  SPEAKER_00: How do you determine occupancy?
• 26:07
  SPEAKER_00: That's great.
• 26:08
  SPEAKER_00: Well, there is a little tool that you can use at the moment, my friend, that is free called air roi.
• 26:14
  SPEAKER_00: So you've got the air dna, which you have to pay for, but it's air air a i r r o i r-o-r.
• 26:25
  SPEAKER_00: I've confused myself now.
• 26:27
  SPEAKER_00: R O I.
• 26:28
  SPEAKER_00: Air R O I.
• 26:30
  SPEAKER_00: Have a little look on that, and then what you can do is you can put in your area, you can put in your uh what you're looking for, and it'll give you the average nightly rates, the average cost.
• 26:39
  SPEAKER_00: It's not the greatest tool because it's free.
• 26:41
  SPEAKER_00: Obviously, if you go on air DNA, then that can help you.
• 26:44
  SPEAKER_00: Or property market intel for the service accommodation is what we actually use.
• 26:49
  SPEAKER_00: That will really help you see your occupancies and understand what is going on in the area as well.
• 26:55
  SPEAKER_00: But have a little look at air ROI, have a little play with it, and that will give you a broad stroke.
• 27:00
  SPEAKER_00: Now, what I would say is when you really want to do a deal, you are gonna need to pay for a bit of software, as we said in our costings, because we want to be the property professional to understand exactly what you're gonna be making because it's it's a lot of it's a lot of work and an effort if if you don't do that sort of thing, okay?
• 27:18
  SPEAKER_00: But have a little look at that, and that should be able to tell you your occupancies.
• 27:21
  SPEAKER_00: The other thing you can do is obviously go on booking.com or Airbnb, and you can look at properties in certain areas, have a look at the calendars, see how many bookings they've got.
• 27:31
  SPEAKER_00: It can be a bit time-intensive and labor-intensive to do so, but see what sort of future bookings and things that they've got in the areas as well.
• 27:39
  SPEAKER_00: But I would say get an understanding for your area, get an understanding for the sort of clientele that you're gonna have there as well.
• 27:46
  SPEAKER_00: Hope that one helps there.
• 27:47
  SPEAKER_00: How do you find landlords that are open to this and why would they not do this themselves?
• 27:53
  SPEAKER_00: That's great.
• 27:54
  SPEAKER_00: I used to think like that all of the time.
• 27:56
  SPEAKER_00: Why would a landlord give me their property and not just do this themselves?
• 28:00
  SPEAKER_00: I'll tell you why, because they don't want to.
• 28:02
  SPEAKER_00: A lot of people out there don't know what we know.
• 28:05
  SPEAKER_00: They also don't want to have the hassle of doing this themselves.
• 28:10
  SPEAKER_00: So if a if I say to a landlord who's got a property, I'm gonna give you a guaranteed rent each and every month that you're happy with because we'll negotiate it.
• 28:18
  SPEAKER_00: And as long as you're happy with that, I'm gonna take the property on, I'm gonna cover all minor maintenances and I'm gonna lease it on a short-term rental basis to clients that we have in the area.
• 28:27
  SPEAKER_00: Are you okay with that?
• 28:28
  SPEAKER_00: They'll either say yes or they'll say no.
• 28:30
  SPEAKER_00: Now they might think that's not a bad idea.
• 28:33
  SPEAKER_00: I'll do it myself.
• 28:34
  SPEAKER_00: I've never had it yet.
• 28:35
  SPEAKER_00: I've never had a landlord turn around and say, I see what you're gonna do, Mark.
• 28:39
  SPEAKER_00: And yeah, why would I give the property to you?
• 28:40
  SPEAKER_00: Now, I'm not saying that's not gonna happen, but most of the time they're like, Yeah, I'll just take the guaranteed rent.
• 28:45
  SPEAKER_00: You look after the property, I'm off.
• 28:47
  SPEAKER_00: And that's what they want to do.
• 28:49
  SPEAKER_00: And those are the people that we're looking for.
• 28:50
  SPEAKER_00: If they want to do it themselves, then let them go and do it themselves.
• 28:54
  SPEAKER_00: They don't need you.
• 28:55
  SPEAKER_00: So don't miss the point of looking for the problem.
• 28:58
  SPEAKER_00: The problem is that they've got a property that's not making them any money.
• 29:02
  SPEAKER_00: Now, if they wanted to make money on short-term rentals, they would do it and they wouldn't be talking to us.
• 29:07
  SPEAKER_00: So, how do you find these landlords?
• 29:09
  SPEAKER_00: Well, you're looking for properties that have been on the market a long time, potentially get in there with some agents if you can do.
• 29:15
  SPEAKER_00: Agents are still a great source.
• 29:16
  SPEAKER_00: You can work alongside agents, you just need to know how to talk to them and how to position yourself with those agents.
• 29:22
  SPEAKER_00: Equally to that, you're looking for properties, again, like I say, that have been on the market for a while.
• 29:27
  SPEAKER_00: So you can check places like Open Rent and see what's been on there, right?
• 29:30
  SPEAKER_00: Move your zooplas and everything on themarket.com.
• 29:33
  SPEAKER_00: Facebook Marketplace is another great place where you can look for properties and you can see if people want to work with you.
• 29:39
  SPEAKER_00: But what I will say, and I say this all the time, is please, please, please, please, please don't start doing this and take it on people's properties if you do not 100% understand exactly how to run a service accommodation or run an HMO.
• 29:55
  SPEAKER_00: You need to understand this, you need to know everything.
• 29:58
  SPEAKER_00: Because I get a lot of my clients come to me and they're like, I've done it, I've done a rent-to-rent deal.
• 30:03
  SPEAKER_00: Oh, brilliant.
• 30:03
  SPEAKER_00: Yeah, but I don't think it's a great deal.
• 30:05
  SPEAKER_00: I'll look at the numbers and maybe it's a good deal, maybe it's not.
• 30:08
  SPEAKER_00: We've we've seen some good ones, but normally they've used the wrong contracts or they've they've got no break clauses, or they just haven't looked.
• 30:14
  SPEAKER_00: So I have a little look at things, and it's like, well, we need to have a little adjustment here, change this, or sometimes they've just locked themselves into bad deals.
• 30:21
  SPEAKER_00: You can do that, it's not as easy as you think.
• 30:24
  SPEAKER_00: You've got to make sure that you're doing the right deals at the right time.
• 30:27
  SPEAKER_00: So you need to have a clear understanding of this, and that is why I put together my own community, which has all of these different trainings that talks and basically it's a roadmap taking you through all of this.
• 30:39
  SPEAKER_00: And I think if if you're the person that I know, you were in there not so long ago, actually.
• 30:44
  SPEAKER_00: So you need to be diving into this, you need to be learning this because once you've learned it, nobody can take that away from you.
• 30:50
  SPEAKER_00: Once you understand it and you can ask the questions, you can get a couple of deals over the line, speaking to me, speaking to the community, and then you're off and running.
• 30:57
  SPEAKER_00: And that is where the power is.
• 30:59
  SPEAKER_00: So make sure that you know what you're doing because once you know what you're doing and you're talking to agents and you're talking to landlords, it's an easy conversation because you know this stuff, but you don't know what you don't know.
• 31:10
  SPEAKER_00: So they might hit you with a question and you're like, Well, I haven't I don't know that because you don't know the ins and outs of it.
• 31:15
  SPEAKER_00: So, this is why I always say in 2026, no matter what we're doing, we need to be the property professional for whatever it is that we're looking at doing and we're achieving now.
• 31:24
  SPEAKER_00: You're in here, which is great.
• 31:26
  SPEAKER_00: So you're learning, you're building your knowledge and everything like that.
• 31:29
  SPEAKER_00: But if there are specific strategies that you need to be getting out there and learning, then don't hesitate to ask questions and things.
• 31:36
  SPEAKER_00: And you can ask me, point in the right direction, any which way that I can.
• 31:40
  SPEAKER_00: But obviously, you need to be making sure that you know these things.
• 31:43
  SPEAKER_00: And number three, how does this work if I want to do a company let on a nightly rate to professionals, e.g., contract workers?
• 31:49
  SPEAKER_00: How does this work if I want to do so?
• 31:53
  SPEAKER_00: If you got a property, you've got a service accommodation, well, you've got a buy to let, you're converting it into a service accommodation, you've done the agreement and everything like that with the landlord, then what you need to do is set yourself up with your OTA, okay, and then you'll take bookings through your online travel agent platform, okay?
• 32:12
  SPEAKER_00: Your OTA platform.
• 32:13
  SPEAKER_00: And then, of course, if you want to do it for company lets, then you can reach out to local companies in the area.
• 32:19
  SPEAKER_00: I always say to everybody, if nothing else, when you're starting out in service accommodation, you want to go around all of the hotels on like a Tuesday or a Wednesday night and take a picture of any of the vans that you see in there and do this over a few different weeks to see if you get the same vans all the time.
• 32:35
  SPEAKER_00: Get the numbers, start reaching out to those companies, seeing if they need accommodation in the area.
• 32:40
  SPEAKER_00: I have a virtual assistant that basically I used to go whenever we used to have a little cheeky takeaway each and every uh each and every week here.
• 32:48
  SPEAKER_00: So I used to go and drive to the takeaway, but I used to take the kids with me and we used to go around the car parks together and act like James Bond.
• 32:54
  SPEAKER_00: I had a little bit of a game with them, taking pictures of vans and things like that, not snakely or anything, but of the numbers.
• 32:59
  SPEAKER_00: And then I used to give the phone numbers to my virtual assistant, and she then on a month-on-month basis calls those numbers up and sees if anybody wants accommodation.
• 33:07
  SPEAKER_00: And we have got some nice good bookings through doing so.
• 33:10
  SPEAKER_00: You've just got to be in the right place at the right time.
• 33:12
  SPEAKER_00: Other than that, obviously, it's just about getting out there, advertising your property.
• 33:17
  SPEAKER_00: So you can advertise obviously on your booking.com, your Airbnbs and things, but you can also advertise your properties on open red for longer-term bookings.
• 33:26
  SPEAKER_00: So we get quite a few uh contractors or people working in certain areas that say, Well, I need the accommodation for three months.
• 33:33
  SPEAKER_00: Is that is that possible?
• 33:35
  SPEAKER_00: Yep, no, no worries whatsoever.
• 33:36
  SPEAKER_00: So that can be another great way of doing it.
• 33:38
  SPEAKER_00: Great questions, though.
• 33:39
  SPEAKER_00: Keep them coming if you've got any other questions there.
• 33:43
  SPEAKER_00: Marilyn, is it worth investing in London for rent to SA due to the 90-day rule?
• 33:48
  SPEAKER_00: Now, the 90-day rule is actually only really, really a hot topic in the borough of Westminster.
• 33:58
  SPEAKER_00: So I wouldn't do any service accommodation around in that borough and around that area because the 90-day rule is really, really hard there.
• 34:06
  SPEAKER_00: There's a lot of other boroughs where it's not as bad.
• 34:09
  SPEAKER_00: We've got a so we've got a three-bare flat I was on about, is in Notting Hill.
• 34:14
  SPEAKER_00: Um we haven't had any problems.
• 34:16
  SPEAKER_00: But then we do let it to corporate clients.
• 34:18
  SPEAKER_00: So what you can do is obviously the 90-day rule is on your night-by-night basis, but if you actually let the property for six months or you let the property for three months even on a corporate let, it doesn't necessarily have to count under the 90-day rule.
• 34:33
  SPEAKER_00: There is other ways of getting around it as well, which I'm not going to talk about here because this is a recorded program, but there are other ways to get around the 90-day rule, which aren't illegal or anything like that.
• 34:43
  SPEAKER_00: You're just playing the system.
• 34:45
  SPEAKER_00: But yeah, you can get around the 90-day rule.
• 34:48
  SPEAKER_00: It's just, yeah, that there are methods and ways, ways to do so.
• 34:52
  SPEAKER_00: So don't worry too much about it.
• 34:53
  SPEAKER_00: But obviously, if it's really strict in that area, you need to look at a different area, or you need to look at just outside that area and things.
• 35:00
  SPEAKER_00: But most people think it's London, it's the 90-day rule.
• 35:02
  SPEAKER_00: It's not, it's certain boroughs that we've found that um that are more with the 90-day rule than just being everywhere.
• 35:09
  SPEAKER_00: And as I say, Westminster was one of those ones that um, yes, it's it's very strong now.
• 35:15
  SPEAKER_00: But uh you'll see yourself if you go on Airbnb that people are letting their properties all year long, they're not worrying about the 90-day rule because they just do the methods that you need to do to get around those things.
• 35:28
  SPEAKER_00: So, great questions there, great questions.
• 35:31
  SPEAKER_00: You know, it's very, very important to be able to help people, to be able to make sure that we're doing things right, because that was one of the things for me.
• 35:37
  SPEAKER_00: I've made a lot of mistakes, guys and girls that are on this call.
• 35:40
  SPEAKER_00: I have made a lot of mistakes, and I've had a lot of training as well.
• 35:44
  SPEAKER_00: So there's nothing quite like boots on the ground, sort of really being able to share what's in all, what's worked, what hasn't worked, what to look out for, so that you don't make the same sort of mistakes as well.
• 35:56
  SPEAKER_00: I've I've in a sense never made a mistake that's cost me lots of money.
• 36:00
  SPEAKER_00: I have had mistakes that have cost me money, but I've never had mistakes that have really, really cost me because as long as you've got sort of a plan A and B with what you want to do with a property and you've done your right due diligence, which is very, very important, then most of the time you can either get out.
• 36:14
  SPEAKER_00: I mean, I've given deals back before.
• 36:16
  SPEAKER_00: I've done rent-to-rent deals, had them for a year or so.
• 36:18
  SPEAKER_00: They haven't quite performed the way that I was hoping.
• 36:21
  SPEAKER_00: I've issued the break clause, I've given the properties back to the landlords in probably a bit better condition than I actually had them.
• 36:27
  SPEAKER_00: I've made a bit of money, maybe broken even, maybe lost a couple of quid here or there, but I've learned what works in certain areas and what doesn't.
• 36:35
  SPEAKER_00: And of course, now I pass that on to as many people as I can to try and help them because it is very difficult when you're getting out there.
• 36:41
  SPEAKER_00: And the biggest thing for me was like doing my first deals.
• 36:44
  SPEAKER_00: And I was just like trying to ask people, you know, can you have a look at my deals and things?
• 36:48
  SPEAKER_00: And they were like, Well, do you think it's a good deal?
• 36:50
  SPEAKER_00: I was like, Well, I don't know.
• 36:51
  SPEAKER_00: I've never done a deal before.
• 36:52
  SPEAKER_00: It looks all right to me.
• 36:53
  SPEAKER_00: But what I try and do with my community and people that we we work with and stuff is say, send me over the numbers, I'll send you a spreadsheet, send me over the numbers, let me have a little look, I'll tell you whether it's a deal I do, or if you need to tweak a few bits and bobs.
• 37:05
  SPEAKER_00: And I've just had a message, I've just seen it come through on my phone at the moment from one of our students who's looking at a service accommodation deal himself.
• 37:12
  SPEAKER_00: And I'll have a look at those numbers for him in a minute and I'll let him know my thoughts on them.
• 37:15
  SPEAKER_00: Why?
• 37:16
  SPEAKER_00: Because when you're first doing this, you don't know.
• 37:18
  SPEAKER_00: You don't know what you don't know, do you?
• 37:20
  SPEAKER_00: So it's it's all about getting that understanding and making sure that we're doing good deals.
• 37:24
  SPEAKER_00: We do good deals, we can build a property business that will last a long, long time, and we can earn money safe in that knowledge.
• 37:30
  SPEAKER_00: Does rent to SA work in central Birmingham, which is article four?
• 37:34
  SPEAKER_00: Yeah, don't worry about the article four, but essay article four doesn't affect SA.
• 37:39
  SPEAKER_00: What what I was trying to put across there is at the moment there is no rules or regulations in most areas.
• 37:46
  SPEAKER_00: I think in Brighton there is actually for service to accommodation.
• 37:49
  SPEAKER_00: And there might be another area, or I don't know everybody's areas, so that's why you've got to check with your local councils.
• 37:54
  SPEAKER_00: But don't worry about there's no article four risk to service to accommodation.
• 37:57
  SPEAKER_00: Article four obviously only covers HMOs, it doesn't cover service to accommodation.
• 38:01
  SPEAKER_00: Article four won't cover service to accommodation.
• 38:04
  SPEAKER_00: They'll call it something else like Article V or something completely different.
• 38:07
  SPEAKER_00: So don't worry about that.
• 38:08
  SPEAKER_00: If I confused you with that, I do apologize.
• 38:11
  SPEAKER_00: It was there as a bit of a reference because I think in the future the councils will start bringing in some sort of directive that will mean that you've got to either go through planning to do service to accommodation or you've got to have some sort of license to do it.
• 38:26
  SPEAKER_00: And for me, that's a good thing because when they bring that in and I'm set up and I'm compliant, it means my properties will be worth more.
• 38:34
  SPEAKER_00: It means that we should hopefully get grandfather rights when those licenses and things come in.
• 38:39
  SPEAKER_00: And it's going to make it harder for the competition to join me.
• 38:41
  SPEAKER_00: So now's a bit of a golden time to get this built so that you can sort of future-proof it for the future.
• 38:47
  SPEAKER_00: But anyway, what are the risks?
• 38:49
  SPEAKER_00: How how much would you say you need to comfortably able to start?
• 38:53
  SPEAKER_00: So rent to SA, how much would you need to comfortably start?
• 38:57
  SPEAKER_00: I would say you probably need, I mean, you've got if you if you have five between five and 10k of disposable money, you're laughing.
• 39:05
  SPEAKER_00: Easy, easy straight.
• 39:07
  SPEAKER_00: If you haven't, you're going to be looking at potentially leasing furniture or buying furniture cheaper.
• 39:12
  SPEAKER_00: It doesn't necessarily have to be your money.
• 39:14
  SPEAKER_00: You might be able to get an investor to invest$5, 10k and you give them a return on their investment or pay them back through the profits that you're doing.
• 39:22
  SPEAKER_00: You could get, I'm not telling you to do this, but you could potentially get a credit card interest-free for 12 months or something, stick it on a credit card and pay yourself back over the first 12 months so that you've paid that for that credit card happy day.
• 39:33
  SPEAKER_00: There's loads of different ways you can do things.
• 39:35
  SPEAKER_00: Or you could set yourself up as a service accommodation management company, in which case, apart from starting the business, setting yourself up, 500 quid, I would say, is all you need to set yourself up to be a service accommodation management company.
• 39:50
  SPEAKER_00: Start making money in your management company by servicing and helping landlords to do this.
• 39:56
  SPEAKER_00: And then you could do some your own rent to rents, but through the profits that you've made with your management company.
• 40:02
  SPEAKER_00: And I've helped people do that as well.
• 40:04
  SPEAKER_00: But I would say have a bit of both.
• 40:06
  SPEAKER_00: If you're managing rent to SA, doing it yourself, you might as well offer your services out to other landlords in the area, taking on different properties and growing it as a business.
• 40:15
  SPEAKER_00: So get into it as a business and do it like that.
• 40:18
  SPEAKER_00: Don't get too hung up on the starting capital because you can potentially, like I've done as well, do joint ventures.
• 40:25
  SPEAKER_00: I have said to landlords, if you give me the property in this state, we'll maintain and manage the property.
• 40:30
  SPEAKER_00: After all costs, we can split the profits.
• 40:33
  SPEAKER_00: You might know somebody who's got a right to let property that they can do service to accommodation.
• 40:37
  SPEAKER_00: You can bring that service to accommodation side to it and do a joint venture.
• 40:41
  SPEAKER_00: There's loads of different ways you can do this.
• 40:43
  SPEAKER_00: Fundamentally, there's four great ways of doing service to accommodation.
• 40:46
  SPEAKER_00: One is obviously buying your own property, two is rent to essay, three is management, and then of course, four is joint ventures.
• 40:56
  SPEAKER_00: Okay, and I've done all of those actually.
• 40:58
  SPEAKER_00: So they they work very, very well.
• 41:01
  SPEAKER_00: Where can you get contracts for rent-to-rent deals?
• 41:04
  SPEAKER_00: Where can you get oh contracts for rent to rent deals?
• 41:07
  SPEAKER_00: And what break clauses do you need to put into them?
• 41:10
  SPEAKER_00: Also, answer that one first.
• 41:14
  SPEAKER_00: Rent-to-rent contracts.
• 41:16
  SPEAKER_00: Well, you can get them through us.
• 41:18
  SPEAKER_00: So I I give out copies of the contracts, the very contracts that I use.
• 41:22
  SPEAKER_00: Now, these contracts cost me between 600 and 1200 pounds to have drawn up initially by property solicitors, but we give those out with our training courses and things.
• 41:32
  SPEAKER_00: So that you've got those.
• 41:34
  SPEAKER_00: Now you can still get a uh solicitor to look over those if you want to, but it'll only cost you a couple of hundred quid.
• 41:39
  SPEAKER_00: Those contracts now to be drawn up and come for us about 1200 pounds plus VAT each.
• 41:46
  SPEAKER_00: So there's a lot of money now in the contracts, but yeah, you you you want to have the right management or commercial lease contracts.
• 41:54
  SPEAKER_00: Obviously, your licensed agreements and things you can get through the NHLA and stuff, but those proper contracts, you want property solicitors to draw those up for you.
• 42:02
  SPEAKER_00: And like I say, it's something that we we help people with.
• 42:06
  SPEAKER_00: It's part and parcel of our training and our program as well.
• 42:09
  SPEAKER_00: So you've got templates for the right contracts with the relevant break clauses in there, as everything like that as well.
• 42:14
  SPEAKER_00: Now, break clauses is really down to you.
• 42:18
  SPEAKER_00: You can have a one-month break clause if you want, you can have a three-month break clause, you can have a six-month, 12-month break clause.
• 42:24
  SPEAKER_00: First deal I did, there was no break clause in the first 12 months.
• 42:28
  SPEAKER_00: This is because it's the first deal, I didn't know any better.
• 42:30
  SPEAKER_00: But there was no break clause in the first 12 months, and then it was a six-month break clause afterwards.
• 42:35
  SPEAKER_00: So we had a five-year agreement with no rental increases or anything like that.
• 42:40
  SPEAKER_00: But I couldn't, I couldn't break it, and the landlord couldn't break the break clause in the first 12 months.
• 42:45
  SPEAKER_00: So we had to get on with it, which is fine with me.
• 42:47
  SPEAKER_00: And then to give the property back, I had to issue or they had to issue the break clause, and then it would be six months after we'd received the issue to break.
• 42:58
  SPEAKER_00: I've also done one-month break clauses on my side and none on the landlord's side.
• 43:02
  SPEAKER_00: And I've I normally have if if nothing else, a three or a six-month break clause for me, and I don't always put it in there for the landlord.
• 43:10
  SPEAKER_00: I wait for the landlord to tell me that they want it in there or not.
• 43:13
  SPEAKER_00: Now, I did have a property where the landlord wanted to sell.
• 43:16
  SPEAKER_00: He got himself into a bit of a pickle and he needed to sell his HMO.
• 43:20
  SPEAKER_00: Now, his HMO was doing okay, it wasn't in the best era, it was one of my very, very early deals.
• 43:24
  SPEAKER_00: And we all know, you know, not all deals are going to be great.
• 43:27
  SPEAKER_00: He's he did actually offer me first dips to buy it.
• 43:29
  SPEAKER_00: I didn't really want to buy it or anything like that.
• 43:31
  SPEAKER_00: But he said he needed to sell it because he really did need the money.
• 43:35
  SPEAKER_00: I think he had a big tax bill, although he didn't really tell me that.
• 43:37
  SPEAKER_00: But I we we've pretty much come to that conclusion.
• 43:40
  SPEAKER_00: So what we did in the end was I issued the break clause.
• 43:43
  SPEAKER_00: It was a three month break clause and gave him the property back so that he could sell it.
• 43:47
  SPEAKER_00: He could market it in that time.
• 43:48
  SPEAKER_00: Listen, I'll I'll work with people, I'll try and help people.
• 43:51
  SPEAKER_00: I'm not going to say to that landlord, well, you've got no break clause.
• 43:53
  SPEAKER_00: We've got a five year agreement, it's tough because I hadn't taken on that property and had to put all the furniture and everything.
• 44:00
  SPEAKER_00: Into it hadn't really cost me anything.
• 44:02
  SPEAKER_00: So I'm happy to work with people.
• 44:03
  SPEAKER_00: I just go out there and find another deal.
• 44:05
  SPEAKER_00: And that's we're always looking for a new deal anyway.
• 44:07
  SPEAKER_00: It's not like we're going to get one deal and that's it.
• 44:09
  SPEAKER_00: If you're doing anything like service accommodation, you want to have at least five properties because then with contractors, with some of the OTAs, some of the listings you can use, the more properties you've got, the easier it becomes.
• 44:23
  SPEAKER_00: And then the other question, also, is the HMO rent-to-rent contract different?
• 44:28
  SPEAKER_00: Well, there's different terms in it.
• 44:30
  SPEAKER_00: So, yes, you will have one that specifically talks about an HMO, one that specifically talks about a service accommodation, and the way the properties are going to be let.
• 44:39
  SPEAKER_00: Fundamentals of the contracts will be the same.
• 44:42
  SPEAKER_00: So, like your break clauses, the terms, who's responsible for what doesn't really differ.
• 44:48
  SPEAKER_00: It's just what the property is used for.
• 44:51
  SPEAKER_00: So I only do HMOs with pre-existing HMO properties, with properties that you know already have the licenses, already set up, already have all the furniture and everything like that in place.
• 45:02
  SPEAKER_00: So my contracts are then that we'll main manage and maintain it.
• 45:05
  SPEAKER_00: This is for a let of an HMO on a room-by-room basis, that sort of thing.
• 45:10
  SPEAKER_00: For the service accommodation, it's this is going to be let on a short-term rental basis using licensed agreements.
• 45:16
  SPEAKER_00: So there's there's there's not a massive amount of difference in there, but the differences will be on how you use the property, okay?
• 45:24
  SPEAKER_00: And what you'll find is if you have a management agreement for management and a management agreement for rent to rent, they will look very different.
• 45:34
  SPEAKER_00: The management agreement for management will be about three or four pages long, not very big at all.
• 45:41
  SPEAKER_00: Your rent-to-rent management agreement will probably be about 15 pages because it because we really need to list the roles, responsibilities, and who's responsible for what on those contracts.
• 45:53
  SPEAKER_00: And that's the detail that you need to make sure that you have in there.
• 45:57
  SPEAKER_00: And the landlord reads it, the landlord's happy with it as well.
• 46:00
  SPEAKER_00: And that's when you do really good deals.
• 46:02
  SPEAKER_00: I'm looking at doing rent essay as well as HMO, but not sure which one to do first.
• 46:07
  SPEAKER_00: What would you recommend?
• 46:08
  SPEAKER_00: And what are the main differences?
• 46:10
  SPEAKER_00: So I like HMOs because I know what I'm gonna get each and every month.
• 46:15
  SPEAKER_00: I can have rent insurance on there just in case anybody doesn't pay the rents or anything like that.
• 46:20
  SPEAKER_00: So for me, I'm I'm one of these people that needs to know what they're getting.
• 46:25
  SPEAKER_00: Once I know what I'm getting, I'm a happy bunny.
• 46:27
  SPEAKER_00: But other people can get out there and other people can be quite happy to, you know, we know we're gonna get the money and stuff.
• 46:35
  SPEAKER_00: So going for pre-existing, what I would say is if if you're quite happy with H, because some people say, Oh, I don't like HMOs, and some people say, Oh, I don't like uh service to accommodation.
• 46:47
  SPEAKER_00: Normally somebody has a preference.
• 46:49
  SPEAKER_00: What I would say is put your maximum focus on what your first preference is.
• 46:53
  SPEAKER_00: My first preference was HMOs.
• 46:55
  SPEAKER_00: The only reason was because I knew I had some friends that were doing service to accommodation, and we were out having a meal and they were looking at the phones, and I was like, What are you looking at your phone for?
• 47:03
  SPEAKER_00: You're looking at it all the time.
• 47:04
  SPEAKER_00: I said, you know, it's a bit rude, like messing about.
• 47:06
  SPEAKER_00: And they said, Oh no, no, I'm just looking at the doorbell just to see who's going into my service to accommodation, making sure there is like two people rather than 20 people turning up to have a party.
• 47:15
  SPEAKER_00: And I just thought, you know what?
• 47:16
  SPEAKER_00: I can't be asked to live like that.
• 47:18
  SPEAKER_00: Do you know what I mean?
• 47:19
  SPEAKER_00: And they were always doing it, uh just like checking things and stuff.
• 47:22
  SPEAKER_00: Whereas with the HMO, it's the HMO's the HMO at the at the end of the day.
• 47:26
  SPEAKER_00: So have a little think of what your preference is, what you prefer.
• 47:30
  SPEAKER_00: Those are really the ones you want to focus on.
• 47:32
  SPEAKER_00: Don't just do something because you think that might be easier.
• 47:37
  SPEAKER_00: Or Mark said, do that one, do this, go with what you you really want to do, but learn them both.
• 47:42
  SPEAKER_00: Learn both strategies because whilst you're out there chatting to landlords, they might have single lets, they might have HMOs.
• 47:47
  SPEAKER_00: It's always great to ask, you know, have you got any other properties and things like that?
• 47:51
  SPEAKER_00: But what I would say is I like if if oh yeah, that was what I was gonna say.
• 47:57
  SPEAKER_00: I like if you haven't got a lot of money up front, working capital, then going for existing HMOs in a nice, tidy manner rather than your run down student rubbish is a great place to start because you will have to spend a couple of hundred quid dressing it and sorting things out.
• 48:14
  SPEAKER_00: But I've taken on HMOs with pre-existing tenants in there, so I'm making money from day one.
• 48:19
  SPEAKER_00: I only go for properties that are at a decent standard.
• 48:22
  SPEAKER_00: I don't mind giving the old room a lick of paint, I don't mind changing the old carpet or something like that, but I'm not really renovating, I'm not putting loads of furniture in these HMOs.
• 48:31
  SPEAKER_00: I'm going for HMOs that are ready pretty much to rock and roll, just might need a little tidy up.
• 48:37
  SPEAKER_00: In which case, then, if you haven't got a lot of money, these are great properties to be looking at.
• 48:41
  SPEAKER_00: You just need to know how to approach these people, you need to know how to talk the linga, you need to know how to find them.
• 48:47
  SPEAKER_00: We can help you with anything like that.
• 48:49
  SPEAKER_00: Service accommodation, you are gonna need some working capital.
• 48:52
  SPEAKER_00: So you are gonna need a few thousand pounds.
• 48:54
  SPEAKER_00: Even if you do a bit of management, I would say it's good to have a bit of a pot of money there, 500 quid or something, get yourself set up, get yourself compliant doing so.
• 49:01
  SPEAKER_00: If you're doing rent to SA, you are gonna have to probably furnish the property unless it's already furnished, in which case, then you're just gonna need the funds for that and then pay yourself back.
• 49:10
  SPEAKER_00: As a rule of thumb, and this is to help everybody here, service accommodation.
• 49:14
  SPEAKER_00: If I can make my I need to make my initial money back that I've put into the property between six to eight months, if it's gonna take me longer than eight months to get my initial investment, i.e., of furniture and setting a property, then I'll I'll pull out basically, or I'll just only give them an offer that means that I get my money back within eight months.
• 49:34
  SPEAKER_00: Because in eight months, it's still a long time, but you've got to think about it.
• 49:38
  SPEAKER_00: You might have a five-year agreement.
• 49:40
  SPEAKER_00: But if it takes you eight months out of that five-year agreement to actually get back the money you've put in, then if you if you're leaving it longer, you're working for free.
• 49:48
  SPEAKER_00: That's why I like HMOs because I'm pretty much making my money back from day one.
• 49:53
  SPEAKER_00: Hope that helps.
• 49:55
  SPEAKER_00: Would you say rent to supported living is a sweet spot, guaranteed rent?
• 50:00
  SPEAKER_00: HMO without HMO stress.
• 50:03
  SPEAKER_00: So supported living again is another thing that we do, and we do it now on HMOs.
• 50:07
  SPEAKER_00: HMOs are becoming a little bit more difficult.
• 50:09
  SPEAKER_00: They're more social housing, I will say, to put a provider in there.
• 50:13
  SPEAKER_00: But if you have a single-let property that won't really work for service accommodation, but and obviously it's not an HMO, supported living can go in there.
• 50:22
  SPEAKER_00: Sometimes they'll pay market rent, sometimes they'll pay a bit of above market rent as well.
• 50:26
  SPEAKER_00: So that can be a great other strategy to do.
• 50:28
  SPEAKER_00: That's something my community members at the moment are going through my back-to-back leasing training because we do a bit of back-to-back leasing, but also we work with a lot of providers and charities across the whole of the UK, and we do help landlords and people, investors like yourselves to find the right providers for those properties.
• 50:46
  SPEAKER_00: So that's it, it could be a plan B.
• 50:48
  SPEAKER_00: You know, maybe you've done something, you've set it up as an essay, it's performed okay, it falls off a cliff.
• 50:53
  SPEAKER_00: It's like, oh my god, I've still got this guaranteed rent.
• 50:55
  SPEAKER_00: What do I do?
• 50:56
  SPEAKER_00: Could speak to us potentially if we've got a provider in the area.
• 50:58
  SPEAKER_00: We might be able to put a supported living provider in there.
• 51:01
  SPEAKER_00: You might not make as much as service accommodation would, but you'll cover any of your costs and you can make a couple of hundred quid hassle-free.
• 51:08
  SPEAKER_00: Why?
• 51:09
  SPEAKER_00: Because they're normally on FRI, fully repairing and insuring leases.
• 51:13
  SPEAKER_00: So this is why I say in 2020, I'm hitting you all with a lot here, but in 2026, it's about being that professional it's about knowing what you're doing.
• 51:20
  SPEAKER_00: And this is why I come on, you know, and do these talks and things like that is to really open your minds up that there's so many plan A, B's, and C's that you can do with property investing, as well as purchase lease options, as well as you know, assisted sales and all of those great things, that it really is about learning and really understanding all of this so that you can go out there and make those right decisions.
• 51:43
  SPEAKER_00: And you might just have to invest a little bit in yourself to be able to do so.
• 51:46
  SPEAKER_00: But once you do, it pays dividends.
• 51:48
  SPEAKER_00: I've spent hundred, well, probably have now, hundreds of thousands of pounds on my own education.
• 51:53
  SPEAKER_00: But the fact of the matter is nobody can take that away from me now.
• 51:55
  SPEAKER_00: And when I go and look at a property deal, it might not be right for me.
• 51:58
  SPEAKER_00: I'll probably know that whether it is or not within the first you know few minutes of being there.
• 52:03
  SPEAKER_00: But I'm looking at loads of different ways of doing things.
• 52:05
  SPEAKER_00: I've done purchase lease options on HMOs, I've done them on portfolios, I've bought properties, we've done assisted sales, we've done rent to rent, you name it, we've got out there and done it.
• 52:15
  SPEAKER_00: We've done a bit of deal sourcing as well, and we've done a couple of flips.
• 52:18
  SPEAKER_00: I've done some flips with some uh joint venture partners as well.
• 52:21
  SPEAKER_00: And I've done that over, well, I would say about eight, nine years.
• 52:24
  SPEAKER_00: I've been doing this now.
• 52:26
  SPEAKER_00: So I've been doing it a while.
• 52:28
  SPEAKER_00: I've been getting stuck in, I've been taking action.
• 52:30
  SPEAKER_00: As I say, made mistakes, but also done well, done all right for myself.
• 52:34
  SPEAKER_00: The house that I'm in at this very moment with my home office and everything is a purchase lease option.
• 52:38
  SPEAKER_00: So you can actually upgrade where you're living as well just by using these very strategies that you're learning.
• 52:44
  SPEAKER_00: But yeah, it's another great way of doing things.
• 52:46
  SPEAKER_00: If the property won't suit service accommodation, it's not going to be an HMO or it's not an HMO.
• 52:51
  SPEAKER_00: I wouldn't say never get hold of a property and convert it to an HMO on a rent-to-rent.
• 52:55
  SPEAKER_00: It's not worth your time, it's not worth the money.
• 52:57
  SPEAKER_00: That's the old way of doing things, and it's don't do it.
• 53:00
  SPEAKER_00: Don't do it, it's not worth it.
• 53:01
  SPEAKER_00: But supported living, social housing might work very, very well.
• 53:05
  SPEAKER_00: Uh, how would you find for providers for rent to SA supported living in order to find well, that's a whole training in itself, my friend.
• 53:12
  SPEAKER_00: But realistically, it's about getting out there.
• 53:15
  SPEAKER_00: What I will say is go on a CQC website for supported living providers and look for providers that are either good to great and start reaching out to them.
• 53:24
  SPEAKER_00: And the sooner you can start reaching out to these providers and seeing what they need, the quicker.
• 53:30
  SPEAKER_00: Well, the sooner you'll actually get some responses, but it will be a long, long road.
• 53:35
  SPEAKER_00: We work with a lot of providers, it's been a long, long road over a good few years.
• 53:38
  SPEAKER_00: We've got some great relationships.
• 53:39
  SPEAKER_00: We should have a company now that can bring providers to the table and things like that.
• 53:44
  SPEAKER_00: But yeah, it's it's about getting out there, it's about getting stuck in.
• 53:48
  SPEAKER_00: So that's it.
• 53:49
  SPEAKER_00: Time.
• 53:50
  SPEAKER_00: Uh, brilliant session.
• 53:51
  SPEAKER_00: Absolutely brilliant.
• 53:52
  SPEAKER_00: I love the questions, guys and girls.
• 53:54
  SPEAKER_00: Thank you ever so much for joining me here.
• 53:56
  SPEAKER_00: I'll be back again in two weeks' time.
• 53:59
  SPEAKER_00: If you do need any help, then do feel free to reach out to me.
• 54:02
  SPEAKER_00: Send me an email at mark at markfitzgerald.com.
• 54:05
  SPEAKER_00: Nice and easy.
• 54:06
  SPEAKER_00: We have free tools and resources that you can help yourself out if you go and visit the propertyunleashed.com.
• 54:11
  SPEAKER_00: Property unleashed is my podcast.
• 54:13
  SPEAKER_00: We have a weekly episode on there as well.
• 54:15
  SPEAKER_00: Have a little listen to that, see what you think.
• 54:17
  SPEAKER_00: And like I say, do feel free to friend request or like or share or whatever on social media.
• 54:22
  SPEAKER_00: I'm on Facebook, uh, TikTok, I believe, Instagram, LinkedIn, and all of those.
• 54:27
  SPEAKER_00: Let's connect.
• 54:28
  SPEAKER_00: Always feel free to drop me a message, let me know where you've heard me, and uh let's connect and let's continue to build these property businesses.
• 54:35
  SPEAKER_00: But I hope you've enjoyed that session.
• 54:37
  SPEAKER_00: I've certainly enjoyed answering your questions.
• 54:39
  SPEAKER_00: And I look forward to seeing you all if I don't see you before in a couple of weeks' time.
• 54:42
  SPEAKER_00: Take care, guys and girls.
• 54:44
  SPEAKER_00: Thank you very much, and bye for now.