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Grow Your Property Business By Outsourcing

 

When I first started in property I would do everything myself. For example, I would source the property, prepare the property for letting, look for tenants, reference them, arrange viewings and do a lot of the property maintenance myself.

This was a real drag on my time and I found myself working harder and for longer hours than I would have preferred to. However, due to a lack of focus, the business wasn’t growing.

I later learnt that this was not the best way to run a successful business. By doing everything myself, I was actually hurting the business. I was focusing on menial jobs and not the most important job of all – that of growing the business.

I then began to outsource and the business benefited significantly as I was spending my time as a business owner and not as an employee.

Some of the things a property investor can outsource are:

 Property maintenance – anything including painting the walls, changing washers and the gardening can be outsourced.

The cheapest way to handle property maintenance is by finding a good ‘odd job’ man. This is basically someone who has skills to complete most of the general maintenance tasks around the house.

For specialist jobs such as roofing and electrics, you can outsource to professional tradesmen.

 Finding tenants – this can be outsourced to a letting agent.

By outsourcing the tenant finding you will save yourself a lot of time as you will no longer need to organise property viewings, interview tenants, apply for references etc

 Handling calls and general administration

If you are not able to afford a full time assistant, you can hire someone part time to handle any business enquiries.
An alternative to using a traditional assistant is to hire a virtual assistant. This is a great cheap alternative as you only pay for the virtual assistant’s time on your jobs, rather than a fixed income per week.

A virtual assistant can not only handle your phone calls, but can also be used for general secretarial tasks including answering your emails.

You can find a Virtual Assistant by for example, doing a Google search and choosing a firm that you can work with.

The only job I would recommend you don’t fully outsource is that of property sourcing.

Finding your investment property at the right price is the primary role of a property investor. If you were to outsource this, you could be in danger of losing your business.

However, you can still use property finders to source properties – but this would be to supplement your activities in this area, not to replace them.

Your business will only grow if you focus on it on a daily basis. Leave the subsidiary tasks to the specialists as your time is certainly worth more than the £10 an hour you would pay a painter and decorator.

You should aim to develop your property business into a fully automated system. This way, you can remove yourself from the business and the business would still continue to run without you, on autopilot.

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Your Goals Make You Who You Are!

 

If you want to get anywhere in life or business, it’s vital to have self belief, i.e. you need to sincerely believe that you will achieve your goals and aspirations.

Without belief in yourself, there’s a high possibility of failure. The following article speaks for itself:

“An old Amerindian legend tells of a brave who found an eagle’s egg one day and put it in a prairie chicken’s nest. The eaglet hatched at the same time as a nest full of prairie chickens saw the light of day, and grew up alongside them.

All his life the young eagle did exactly what prairie chickens do. He pecked for insects and grubs in the earth. He clucked and cackled exactly like a prairie chicken. And when he flew, it was always in a cloud of feathers and only for a few yards at most.

After all, that’s how prairie chickens fly. The years passed and the eagle grew old.

One day he saw a magnificent bird gliding high in the cloudless sky. Gracefully the huge bird rode the air currents, hardly moving his great golden wings.

"What a beautiful bird!", exclaimed our eagle to his prairie chicken friends. "What is it?"

"That’s an eagle, the king of birds," clucked his neighbour. "But you better forget about it. You’ll never be an eagle."

And so the eagle forgot all about the magnificent bird and died, thinking he was a prairie chicken.

Most people live life as a prairie chicken because they believe they are something less than they actually are, or could be.

They slave hard at work, for little money, in a job that they think is secure, only to retire old on a pittance of a pension. They look at successful businessmen and entrepreneurs who’ve made if for themselves, but are constantly told:

“You better forget about it. You’ll never be a millionaire!”

This is not the way to live your life. If you want to be an eagle, you need to start thinking and acting like one NOW.

With the above in mind, you need to sit down and set yourself some clear goals. When setting your goals:

*Decide exactly what it is that you want. For example, if you are an aspiring property investor, one of your goals could be:

“Buy a £100,000 property with no money down, before 1st August 2007”.

*Write your goals down. Merely thinking up a goal and leaving it in your head is never a surefire way to success. To guarantee certain success, you MUST write it down.

*Create a deadline for your goal

Having a deadline will help your goal become more realistic.

For example,

“Buy a £100,000 property with no money down” has no sense of urgency and hence has a high chance of failure.

*Create an action plan to achieving that goal.

For example,

1. research my local areas for properties up to £100,000
2. visit local estate agents to arrange viewings
3. develop my marketing plan to bring in possible deals
4. set up my finances
5. organise my legal team to handle the purchase
etc.

An action plan will greatly enhance your chances of success as it helps break a larger goal into easily digestible chunks.

Once you get into the habit of actively setting your goals and truly believing that you can achieve them, you will find to your amazement that you consistently meet your targets and reach the dizzy heights you previously thought you were incapable of.

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Utilise Your Tenants

 

Every property investor will agree that without tenants you do not really have a property business.

Your tenants will pay the rent set by you. This rent will be used to pay for:

 Your mortgage repayments
 Recurring property maintenance
 Fixtures and furnishings in a furnished property

Any money left over will be used by the property investor for

 Advertising
 Finders fees for further property acquisitions
 Further acquisition financing costs
 Legal fees
 etc.

As you can see, there are numerous expenses here. To be successful, you need to treat property investing as a business and not just a hobby.

I know of a lot of people who have tried property investment only to find that their costs far exceed any income – this is certainly NOT the right way to run a successful business.

As with any business you need to look for ways to reduce costs or increase the income. Now the only way for you to increase the money coming in would be to increase the rent. This is not as easy as it may at first look.

If you were to increase the rent over and above the rent dictated by the market you may never be able to rent out your property. A tenant will only ever pay market rent unless your property is one of the best properties on the market and in an exclusive area where it is very difficult to find rented accommodation.

Unless your property meets the above two criteria, I would forget about increasing the rent. You must therefore focus on reducing costs.

One way to reduce costs is by making the best use of your tenants.

For example, you could ask your tenants to do a lot of the simple upgrading tasks on your property for you. I’ve often asked tenants to paint my properties for me! If I supply the paint in a colour that is agreeable to both myself and the tenant I find that they are only too happy to paint the house for me.

By painting the house, the tenants feel more involved in their property and also house proud; hence they often stay longer resulting in fewer voids.

I also make it clear to tenants that I am looking for other properties in their area. If they know of any vendors that may be looking to sell, please let me know. This is another way to find that elusive deal. I am happy to pay the tenant a finder’s fee for this service.

Finally, when a tenant decides to move on, I ask him/her if they know of anyone that might want to rent the same property. I normally ask them to put a notice up at their place of work or local pub.

Again, I will offer the tenant a small financial incentive if they are successful in finding me someone.

This financial incentive is far less than it would cost me to advertise the property, hence I’m saving money straightaway.

I’m sure you can probably think of a few more ways your tenants can help you run your business. The bottom line is that you must treat your tenants as an asset and help them help you grow your business.

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Where To Buy Your First Investment Property!

 

“Location Location Location”

The location of your buy to let property is one of the most important variables you need to consider when looking for your first investment property.

Getting the location right will mean a steady flow of good rent paying tenants.

However, if you make a mistake with the location you could be faced with long voids, damaged properties, and disruptive and possibly even dangerous tenants.

One of the first things you need to do before buying your property is to gauge whether there is a market for your choice of property in your location. NEVER buy in an area where there is little or no perceived demand.

Whether you are investing in HMOs (Houses in Multiple Occupation) or single family properties, I find that if your location is good, you will always exceed your expectations when it comes to finding good reliable tenants.

In the past 10 years, I have found that the market for sharers has increased significantly especially in sought-after cities with good work opportunities and transport links.

I find the following types of people wishing to share with others:

• Students
• Nurses
• Doctors
• IT contractors
• Shop workers
• Airport workers
• Newly qualified graduates
• Asylum Seekers
• Housing Benefit tenants
• Recently divorced tenants
• Foreign (non-uk) citizens
• Etc.

I get several calls a day from the above types of potential tenant looking for individual rooms to let in a property. The same is true for young families who cannot yet afford to buy their first home and are looking to rent smaller 2 to 3 bedroom houses.

So how can you guarantee that you will easily let your property once you have completed on the purchase?

Advertise

If I am unfamiliar with the location of my anticipated purchase, I will normally place an advert in the local paper advertising for my particular tenant type. For example, if I am looking for professional sharers, I will state so. Conversely, if I am looking for a family, I will indicate this in my advert.

I normally place adverts for a minimum of 4 weeks. If I receive just a couple of calls in the 4 weeks, I will most likely not invest in that area. However, if I receive 10s of calls for my proposed property, there is a greater chance of me buying in that location.

When answering calls from tenants, I will always ask them questions to help me complete my market research. For example, I will ask them specifically what they are looking for. Which particular areas and streets are they interested in and why? What size of house would they prefer to live in? In the case of sharers, how many people are they happy to share with etc?

Getting these types of questions answered by my potential tenants is valuable in my search for the ideal property in the ideal location.

If I am looking specifically for a student tenant, I will visit the local university and not rely purely on advertising.

I will:

• Visit the University Accommodation Office and ask them what the best locations for student properties are. Always buy in these locations even if they are more expensive than others further down the road.

The university is very knowledgeable on their local areas and if they don’t like any particular location, be sure that every single student on campus will know about it!

• Try not to buy my student property in a location greater than a 20 minute walk from campus.

Students have become lazier and more demanding over the years. They prefer to hop out of bed at 8.55am for a 9am lecture.

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How To Successfully Buy Your First Investment Property

 

Once you have decided that you want to invest in property, you need to decide how to source your property at a good price. There are several methods that you can use to source property below market value. Three such methods are listed here.

The Internet

One of my favourite Property Mentor’s Dolf de Roos talks about the 100 – 1 rule (he calls it the 100:10:3:1 rule) in his book:

"Real Estate Riches" If you don’t have this book, I would highly recommend that you buy it. It’s one of my favourite ‘right-to-the-point’ books on real estate.

The 100-1 rule stipulates that if you were to look at 100 properties, you may end up buying one good deal! Property is very much a numbers game. The more you look at, the more chances you have of knowing exactly what it is you’re looking for, and henceforth finding your deal.

Not a day goes by when I’m not looking at property – if not physically, I will be analysing deals in the local property paper or on-line. I prefer on-line as I can literally analyze hundreds of deals in one sitting. If you’re not already familiar with the following websites, I would highly recommend you spend some time familiarizing with them:

If you are a beginner and are not sure of the type of property that would best meet your needs, it is definitely worth spending time doing research on the internet. You can also search for properties to let. This will allow you to understand rental values and help you to decide how much funding you will need in you purchase, as buy to let financing tends to be based on rental valuations.

Estate Agent

Regardless of what people say, I find estate agents to be a valuable resource when it comes to buying property. I have bought several below market value properties through estate agents.

By being persistent, and proving to an estate agent that you are a serious investor, you will have them ringing your phone of the hook with potential deals. However as with anything, you need to be careful that you are not receiving ‘dogs’ – and that the deals are indeed deals. Once you understand your market, this should be simple.

Get to know your local estate agents and get them to know you. Be persistent in your approach. Go around in person and speak to them. Use them to give you their opinions on any particular area. If you are serious about investing in property, you need to maintain regular contact with at least three good estate agents in your preferred area. Over time, as I have found, these agents will be worth their weight in gold!

Do Your Own Marketing. This is my preferred method of acquiring property. You could start off by advertising in your local newspaper.

Typical adverts might read:

"Properties wanted. Cash buyer waiting, any area considered"

"Repossessions stopped. Don’t wait for your house to be repossessed.
Ring now for an instant decision" TEST your adverts. What works in one location may not work in another area for any number of reasons ranging from social demographics to the type of newspaper you’re advertising in.

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