As our clients and readers of our newsletters will have seen, we have regularly commented on the plight of the homeless in our newsletters.
As a result of this we may have created the impression that our activities are associated with, or we develop properties for, the homeless sector.
This is not the case. We focus on providing shared accommodation in the co-living sector.
Some of the properties we develop for this sector are licensed HMOs (Houses in Multiple Occupation), and some are not.
All of them are developed to a high standard with quality fixtures and fittings so that we have quality tenants who can pay their rent.
Importantly, they are trouble-free investments that provide attractive and secure rental incomes and capital growth in line with the market.
Unfortunately, properties in the homeless/government-dependent sector are rarely trouble-free and may be far less profitable. It’s why landlords are reluctant to take such tenants.
We never forget that our focus is on maximising the rental income for our clients.
As you might expect, government-dependent tenants pay less rent than private sector tenants so our focus has to be on developing properties that secure higher quality tenants who can pay more rent.
Our tenants are typically semi-professionals, tradesmen, administrative and manufacturing staff; i.e. people who are gainfully employed. They pay their rent on time and look after the properties.
In our early days in this sector we did try, with local councils’ support and based on their promises of support (which proved to be non-existent), to have a mix of working and government dependent/ex-homeless tenants in our properties.
We quickly came to realize that whilst in theory such tenants should have been able to pay their rent and not engage in anti-social behavior, the reality was very different.
We have an obligation to our clients/landlords to protect their position and we had no alternative but to step in and secure alternative tenants.
The good news is that there is a no shortage of quality tenants for the right shared accommodation.
Rental demand is strong and is going to remain so for the foreseeable future. There is no need to target government dependent tenants.
The bad news is that there are now around 275,000 homeless people in the UK, many of whom find themselves in this position through no fault of their own.
Whilst we can’t develop homes for them, we can highlight their plight in our newsletter.
If you would like to help us support homeless people in the UK, you can find details on how you can you do this on the last page.
It is fair to say that in the not too distant past the HMO sector was plagued by rogue landlords offering sub-standard accommodation.
The good news is that it has moved considerably up market in recent years.
This is partly due to government regulations, but also by more professional investors/landlords entering the market.
There are also more professional property management operations which can let and manage such properties.
It all adds up to a great sector to develop and invest in.
