Spoke to a landlord today...

cassidy0111

I was talking to a family friend whilst at my parent's house earlier. His family owned a couple of car dealerships in and around Glasgow before selling out to a certain big car company in the late 90s (approx)

He now owns 6 student HMO flats in Glasgow. He was having a right old moan at Glasgow City Council for granting planning permission "to more and more of these flashy student accomodations" including one about 5minutes walk from some of his flats.

I had always assumed that he made a huge profit from the HMOs but apparently it is not as easy a business as it once was with fewer students seeking private rentals. He thinks the council should show loyalty to people who have helped students out for years and not the bankers behind these new places! (which do look rather nice I must say)

Generali

cassidy0111 wrote: »

I was talking to a family friend whilst at my parent's house earlier. His family owned a couple of car dealerships in and around Glasgow before selling out to a certain big car company in the late 90s (approx)

He now owns 6 student HMO flats in Glasgow. He was having a right old moan at Glasgow City Council for granting planning permission "to more and more of these flashy student accomodations" including one about 5minutes walk from some of his flats.

I had always assumed that he made a huge profit from the HMOs but apparently it is not as easy a business as it once was with fewer students seeking private rentals. He thinks the council should show loyalty to people who have helped students out for years and not the bankers behind these new places! (which do look rather nice I must say)

Interesting anecdote.

It's the problem with BTL as an investment rather than a business: there's rarely much diversification there so if something messes with the model (nightclub set up next door/uni builds nice digs for students) you can lose a lot. At least with a diversification of assets you might gain in another area of your portfolio.

cassidy0111

Generali wrote: »

Interesting anecdote.

It's the problem with BTL as an investment rather than a business: there's rarely much diversification there so if something messes with the model (nightclub set up next door/uni builds nice digs for students) you can lose a lot. At least with a diversification of assets you might gain in another area of your portfolio.

Hmm, I honestly do not know if he has other investments or if he relies on the HMOs as his only source of income. I know that the money for the sale of the car dealerships was shared with his dad and his uncle who both retired. I was just a little surprised to hear him moaning as had always thought he was coining it in!

gazter

cassidy0111 wrote: »

Hmm, I honestly do not know if he has other investments or if he relies on the HMOs as his only source of income. I know that the money for the sale of the car dealerships was shared with his dad and his uncle who both retired. I was just a little surprised to hear him moaning as had always thought he was coining it in!

People who coin in the most often moan the most.

cassidy0111

gazter wrote: »

People who coin in the most often moan the most.

Very possibly, yes. However, it is the first time I have heard him moan about this or anything to do with money for that matter.

ladeeda

Interesting that he thinks the council should show him loyalty for helping out students over the years.
There seems to be more empty student lets each year, where I am anyway.

cassidy0111

ladeeda wrote: »

Interesting that he thinks the council should show him loyalty for helping out students over the years.
There seems to be more empty student lets each year, where I am anyway.

I think his point is as much about big banker backed property companies putting pressure on the little guys who have provided a service for years.

ladeeda

cassidy0111 wrote: »

I think his point is as much about big banker backed property companies putting pressure on the little guys who have provided a service for years.

I get where he's coming from, bit like Tesco's taking over a local store.

cassidy0111

ladeeda wrote: »

I get where he's coming from, bit like Tesco's taking over a local store.

Yeah true, the big student accomodation companys are like the Tesco of their industry.

GwylimT

Being a landlord is running a business and with any business when demand/the market changes you often have to as well to remain successful.

Where our rental property is there are a lot of students, we have personally stayed away from HMO as we would prefer to attract long term tenants, as this is both beneficial for us and the tenant. If however there wasn't a demand for rental family homes we couldn't sit and complain, we would have to use one of our two choices, go for HMO or sell up, you cannot okay the victim.

princeofpounds

I think his point is as much about big banker backed property companies putting pressure on the little guys who have provided a service for years.

It's called competition.

They aren't 'putting pressure', they are providing a better service.

If there is any group who do NOT need the subsidy of protectionist planning policies it would be student landlords. Is a 20 year property boom of unprecedented proportions not enough for them?!

PS His business could be profitable but still not 'worthwhile'. What matters is the return you are getting on the capital 'trapped' in the business.