Property Stories: Amy Varle
and Social Property Investment
Homeless at the age of 16, Amy is now an entrepreneur, researcher, activist and fellow of the Winston Churchill Memorial Trust. Her mission is to improve the situation for homeless people and their access to housing, primarily through looking at ways to forge new partnerships between the private rental sector, local government and third sector organisations.
You can find out more about her on her Wikipedia page but to read about the genesis of her Social Property Investment project, see below.
Please Note: This article is an amalgamation of 6 articles, first released in 2017. It is not up-to-date in terms of Amy's work and some dates, which are referenced as being in the future, are now in the past. The issues and solutions raised here are, however, still relevant in 2020.
Social Property Investment by Amy Varle, Entrepreneur and Homelessness Activist.
My early working life wasn’t quite so interesting - I was employed in a council role for the largest part of my career!
there I was supporting the management of tenancies for vulnerable individuals ranging from those with severe mental health issues to asylum seekers and children leaving care.
It was a varied and challenging role.
In 2013, feeling frustrated with local government limitations and their typically outdated responses to homelessness, I became independent with the aim of making privately-rented accommodation more accessible to welfare claimants while simultaneously increasing investor confidence within this section of the marketplace.
Homelessness in Manchester
Spending the next couple of years researching homelessness response across the city of Manchester and its surrounding regions, I engaged with the public, private, third and voluntary sectors to explore existing - and potentially new - accommodation and support solutions for those in housing need.
I worked practically to find alternative options, assisting in the provision of homes for rough sleepers, sofa-surfers and those in temporary accommodation, as well as mediating between landlords and their tenants in an attempt to prevent inevitable evictions.
We had some great successes – and as you would imagine, some major catastrophes...
The Winston Churchill Memorial Trust
In 2016, I was awarded a Fellowship from the Winston Churchill Memorial Trust, enabling me to enhance my learning experiences for the benefit of others and explore the international approach to homelessness which had inspired much of my work for the previous few years.
My educational road-trip across the USA was an incredible life-changing experience which has allowed me to connect with - and learn from – pioneers and industry leaders across the globe.
Social Property Investment: Pioneering Strategies for 21st Century Homelessness Prevention and Response
Correlating all of my research to date, ‘Social Property Investment: Pioneering Strategies for 21st Century Homelessness Prevention and Response’ is due for public release in the Autumn of 2017.
From here, I plan to launch concepts for testing in simultaneous UK/USA pilot schemes, aligning excellent practice via a global network of knowledge exchange. Our shared goal is to collectively set the benchmark for the efficient, effective and compassionate address of homelessness across developed nations.
Going Back Out There, Into the Marketplace
I have had some wonderful moments and experiences since I was chosen to take this path.
I was welcomed with open arms into the private rented sector back in 2013 and have gained many friends and supporters along the way.
My experiences have taught me that solutions to challenges can almost always be found by seeking the answers in others and working effectively together - and I feel strongly that our private investment market has much to offer in terms of reshaping the way that affordable home delivery in the UK operates.
And now, I’ll be going out into the marketplace to immerse myself in property investment, just like I did when I was starting out back in 2013.
The Local Housing Allowance Strategy
Having left my council role in the hope of identifying solutions to homelessness within the private rental sector, in 2013 I began attending property networking events in my home city of Manchester.
For a while, I did feel a little terrified as I sat amongst the experienced property investors – and people who it seemed to me at the time were sheer geniuses within their respective fields! It was, however, a great introduction to the private property marketplace and the networking ‘scene’ remains a great way to get started for those with limited experience.
Looking back, I learned masses during this period and for a while, hopped from meeting to meeting, enjoying the energy and soaking everything up.
I met lots of people who were new to the property business and there was always a buzz in the air – after seven or eight years feeling stifled and frustrated within a local government environment, I had found a place where the entrepreneurial spirit was actively welcomed and encouraged!
What I Discovered by Talking Openly
My willingness to talk openly about the Local Housing Allowance (LHA) marketplace and of its challenges – from a Local Authority perspective – meant that I was never short of friendly faces to talk to at a property networking event.
I remember one evening being stunned to find a queue of people lined up, each eager to ask a question – I was later told a rumour had circulated, there was a council renegade in the room!
At each gathering I attended, I listened intently as many of the landlords I encountered recalled their horror stories of letting to tenants in receipt of ‘LHA’. Having spent my entire career to this point supporting ‘social’ tenants of all backgrounds and circumstance to successfully manage and maintain their homes, most of the problems which were relayed to me were more than familiar – breakdowns in communication, sanctions of benefits, damage to property, non-payments of rent.
I was happy to provide support and guidance on the spot and a lot of the time, this ten-minute chat was all that was needed to resolve a major obstacle or problem: a new approach, a fresh pair of eyes and a contrast in knowledge and skill.
I was quickly learning that there was – and still is – a widening need for professional support in this section of housing delivery: where ‘public meets private sector’. I discovered that there was actually very little in terms of resources or guidance for stakeholders operating within the ‘LHA’ marketplace – and many of the people I encountered were (understandably) way out of their depth.
Tracking Down the Illusive LHA Strategy
Having spent most of my working life following council-written instruction manuals to complete even the most mundane of tasks, I found it baffling that (at this stage) the UK was spending £5 billion a year on a benefit paid to assist people with housing costs – and yet, was making little to no information on good working practice available to those who were providing the homes.
I genuinely spent a few months searching online for a copy of the elusive ‘LHA Strategy’ instruction manual; surely there couldn’t be an entire investment industry worth billions of pounds which was quite literally navigated by guesswork?!
The more I investigated, the more I didn’t understand.
What were the recommended methods for sourcing and screening applicants, best practices for collecting payments of rent?
Where were the official pointers for in times of crisis – and how did you get advice on safeguarding tenants who could be deemed vulnerable?
As well as all of this, who was making sure that the interests of both investor and occupant were fulfilled and that risk for all participants was fully assessed and adequately mitigated?
It seemed there was nobody official to advise, mediate or manage across this whole of this sector; there were still very few specialised ‘social’ lettings agencies in the area and local councils appeared to be making little to no attempt at bridging the gap.
Landlords and their property managers were finding their way in the dark, with more and more expected of them in terms of responsibility and their service delivery.
The Affordable Housing Industry
Working in the affordable housing industry requires a delicate balance of skill, tact, assertiveness, and compassion.
People who are in receipt of welfare benefits are inevitably facing issues connected to poverty and the repercussions of sustained poverty can be far-reaching. ‘Social’ issues – which can affect a person’s physical and mental health, their ability to obtain and maintain suitable employment, as well as their well-being and overall approach to life – will inevitably impact on a person’s ability to consistently manage the responsibilities associated with a tenancy in the private rented sector.
Very few landlords I’ve encountered are qualified social workers or psychologists – and I haven‘t yet met any who are paid to undertake this role in association with the housing services they provide.
Despite this, many providers of affordable housing within the private rented sector are having no other option but to step-up and assist their tenants with crisis related to family breakdowns, domestic violence, debt, unemployment, and ill health.
It was perplexing to me that the charitable organisations were working all over Manchester to feed and clothe a growing number of people living on the streets – yet housing provision was available and could be sustained if only both the owners and their occupants were afforded an appropriate level of steering, education and/or support.
Homelessness Is A Problem That Can Be Solved
The more I learned, the more I believed that homelessness was a problem that could be solved, if only we approached it in a slightly different manner.
The limitations of available solutions in the UK meant that I was continually being led to explore American techniques and I began to wonder if adaptations could be utilised here in Britain. Could we utilise the strengths, talents, and resources of each of the sectors and blend them to create a model which would work for everyone?
The opportunity to find out was presented to me sooner than I had anticipated and shortly afterwards, I was out on the streets of Manchester, offering to house those who were homeless – and creating solutions for real.
Housing the Homeless (Manchester Pilot Scheme)
I've talked about property networking events and the fun I had in the early days immersing myself in my new role. It was at one such event that I met a young, entrepreneurial landlord in 2013 with whom I struck up an immediate rapport.
For the next couple of years, this person would become a key figure in my life as we worked together on various property projects.
After weeks of meeting and discussing every aspect of the LHA (Local Housing Allowance) strategy you could possibly think of, we combined our assets, knowledge, and skills to make a plan to house the homeless in Manchester.
Accommodation In Fallowfield
The accommodation available was in the heart of Fallowfield, South Manchester – ‘Student Land’ to anyone out of the area. Over the previous few years, the surge in HMO landlords had seen this part of the city become saturated with shared housing for university attendees, much of it sitting empty as supply now far exceeded demand.
I was stunned as I drove around the area for the first time back in 2013, every property seemed to be advertised as ‘To Let’. I learned that student lettings are all about timing – if a property isn’t occupied by the time the academic courses commence in September, the chances are, it will sit vacant for the remainder of the year.
An Overview of the LHA Marketplace
I began to have this utopian vision of housing every homeless person in Manchester in all of these empty homes (maybe a little naïve, I know). I thought the best route to achieving the goal was via the local authority – and so I made contact with the council’s homeless and housing department.
Keen to assist in supporting available services, I felt there was an alternative solution to over-subscribed, costly, bed and breakfast or hostel-type temporary accommodation. I was eager to test out and improve the model I was creating, in a practical way which could be monitored and evaluated.
A pilot scheme would help to obtain a broader overview of the ‘LHA’ marketplace and sharing results would allow housing providers to gain a deeper understanding of the processes encountered by an ‘LHA’ claimant or tenant.
The challenges and obstacles that would inevitably arise during this period would enable us to design and improve systems for efficiently and effectively dealing with homelessness – and allow us to confidently guide potential investors to mitigate risks from the offset.
The Manchester Pilot Scheme (In A Nutshell)
- Identified and accessed a diverse range of void rental accommodation.
Tenant participants included a mix of low, medium and high-risk individuals with a broad range of social issues and circumstance; from individual rough sleepers to families living in temporary accommodation.
- Where possible, participants were housed strategically according to gender, age, character, needs and personal circumstance.
- Applicants assessed on support requirements and motivation to engage.
- Assistance was given with move-in transition; ie benefit applications and administrative tasks, credit union introduction, obtaining evidence and references.
- Where possible we tried to engage with the provision of aftercare services and provided signposting to relevant supporting agencies.
- Strategies and procedures were designed for good working practice.
- Continuing tenancy support provided to participants as required.
Shortly after pitching my ideas to the council, I began to take tenant enquiries directly from their homelessness drop-in service, as well as from associated organisations such as domestic violence shelters and day centres.
Both a blessing and curse, my phone rang off the hook as it seemed anyone in housing need within a 20-mile radius of Manchester now had my mobile phone number.
I worked night and day to screen applicants, help them find evidence for their benefits claims, obtain identification, liaise with external agencies and I also helped them to complete welfare assistance questionnaires, housing forms, and credit union applications.
Looking back, it does seem a little crazy and being honest, I really don’t know how I survived that period of intensity.
I was trying to juggle the problems of everyone involved: I became a personal guarantor for the applicants I housed and was reliant on their engagement and cooperation in order to make things work.
And yet ultimately, I was working on behalf of the landlords.
I had a number of houses on the go at any one time and a lot of the people who contacted me were obviously troubled; it was impossible to adequately help everybody and provide them with everything they required.
I connected with charitable organisations and worked hard to form positive relationships in order to explore the wrap-around support service which was so desperately needed.
The Next 2 Years
Over the next couple of years, I continued to network, contribute online and integrate across the private sector, giving balance to the research project as I worked in differing situations; encountering variations in the geographical area, buildings, tenant type and circumstance.
I tried to work with a solution-focused attitude and address problems as a way to improve future output. Though there was a very long way to go, I knew I was onto something and picked myself up after each setback or hurdle.
The pilot scheme period was two years of extreme highs and devastating lows; there were tears of happiness when lives were changed – and tears of frustration when solutions broke down.
I felt the torment of the landlords, as they waited for housing benefit sanctions to be lifted so that they could make their mortgage payment on time – and I felt the pain of the tenants, as they struggled to afford to buy food and basic essentials for their new homes.
I supported women fleeing domestic violence, a young care-leaver who had turned to prostitution in order to support himself, and a rough sleeper who had been continually beaten and urinated on whilst sleeping in Manchester’s streets.
As news travelled of the project I was undertaking, my network naturally widened and I began receiving offers of void property on a regular basis.
I had difficult decisions to make; I just couldn’t facilitate all of the support which was needed for so many complex applicants on my own. I wasn’t qualified to deal with much of what I was encountering – many of the people who were contacting me needed specialised, professional, intervention and long-term support services.
I would see solutions break down when individuals transitioning from chaotic lifestyles were left to fend for themselves, or their aftercare failed to materialise; at times, it was a torturous situation to be in.
I didn’t want to set people up to fail.
In 2015, I made the decision to pause the project and began to re-examine the model in its entirety; drawing on all of our positive and negative experiences in order to create a skeleton of procedural guidance templates for good practice.
The perfect close to this chapter would be a ‘model’ property, where all of these strategies and systems could be showcased: a housing project which would be for the homeless, by the homeless.
Creating A ‘Model’ Property
We had been supporting a number of ladies who had formed a close bond during the period they had lived together and they had each become valuable assets in the household – and each-others recovery.
This was a win-win: we could upgrade their living environment, whilst they played a role in the overall design of future projects and services.
This would be a housing project for the homeless, by the homeless.
Some of the ladies had been rough-sleeping and were very troubled when we met: now they were thriving and the sound of laughter filled their communal home – the women were socialising, working, undertaking training – and generally enjoying life again.
I hoped this cycle of support and recovery would continue as the project now evolved. If we introduced new ladies to the household, would they be inspired to turn their own lives around with the backing and encouragement of their fellow housemates, who had recovered successfully from similar periods of instability and crisis?
The tenants were understandably delighted when the vision for their brand-new home became a reality and the refurbishment of the accommodation was complete.
During works that were undertaken by the investor and his team, a traditional four-bedroom home which had stood empty for over ten years was totally transformed; into a one-of-a-kind HMO/Studio hybrid, containing six self-contained studios and additional communal areas.
The building was completely remodelled with requirements of occupants taking paramount importance; space was created which would promote both privacy and socialisation – each unit containing a living area, shower room and breakfast making facilities, as well a large communal kitchen area for residents to enjoy mealtimes together.
The gas supply was removed from the property and each unit was fitted with its own electricity meter; a move made to assist tenants with budgeting, economical living, and long-term financial management.
Putting Systems In Place
Barriers to access such as traditional credit checks and the requirement for rent in advance were removed by the owner, who applied a strategic and procedural way of working in order to largely mitigate risk.
Systems were implemented surrounding tenant selection and blending, administrative support and social integration, as well as strategies for rental payments, potential problems, collaborative management, and systematisation.
In order to link residents with the specialised support they may need, I connected with local public and third sector organisations who could share resources and assist tenants day-to-day. I hoped this move would encourage occupants in sustaining their homes and meeting all of their responsibilities, whilst positively moving on in life.
The biggest challenge ahead was making sure all participants of a created consortium (landlord, tenant and supporting agencies) felt they were obtaining something of value from the agreement created and so fulfilled their ongoing obligations.
|Rent In Advance||£0|
|Weekly Rent: LHA Rates||£83.00|
|Weekly Top-Up (Wifi & Water)||£3.75|
|Quarterly Saving (Housing)||£28,019*|
|Quarterly Saving (Non-Housing)||£10,925*|
*Making It Count Cost Indicators by Crisis
As a ‘showcase’ project, I tried here to create solutions which would be rewarding in some way to each involved party or beneficiary.
My aim was to demonstrate a model which was removed from the traditional ‘LHA’ strategy – I was tired of seeing the hardworking and thoroughly decent landlords I was supporting continually berated in the press.
‘Slumlord’ is not a term I think should be associated with the people I work with, who go out of their way to create good-quality, affordable housing solutions; taking-time and spending money to become educated, whilst striving to continually improve their tenant experience.
It was at this stage I began referring to the work we were doing as ‘Social Property Investment’, in order to demonstrate the contrast in our approach.
Early development of ‘Social Property Investment’ strategies revealed a way to maximise profit and cost-effectiveness, minimise and mitigate risk – and ultimately, make a difference to the lives of people housed, as well as wider society.
‘Social Property Investment’ is not just randomly warehousing benefit claimants, with a sole focus on a financial return.
‘Social Property Investors’ actively provide comfortable, secure homes and take measures to safeguard the people they house.
Refining the Approach
Of course, this ‘model’ project was far from perfect and there were many headaches along the way. It was difficult to rehabilitate new tenants as the ‘supporting services’ which were promised at the point of initial contact often failed to materialise long-term – a frequent problem encountered over a previous couple of years of practical research.
There were integration issues when one new housemate brought drugs and unsavoury characters into the home; one evening I learned via Facebook there had been a fire, another, there was a litter of kittens…
My experience with this project inspired me to go back to the drawing board with the aim of finding sustainable access to tenant support; rather than as before, laying focus on the bricks and mortar aspect, which is actually easy to find.
The financial rewards which are associated with property investment are wholly extendable to the provision of affordable housing – the crucial piece of the jigsaw to be found is a free-flowing and flexible resident support supply, which would consistently encourage complex tenancies to be maintained.
This time, my quest to find solutions would lead me 5,000 miles across the ocean to the American state of California, where innovation, enterprise and radical solutions to homelessness would be revealed to me in abundance.
Housing 2.0 (Lessons From The USA)
In January 2016, I was thrilled to be awarded a Travelling Fellowship from the Winston Churchill Memorial Trust, enabling me to venture all the way to America in my quest to find alternative solutions for homelessness issues in Britain. This once-in-a-lifetime venture was an incredible learning experience, enabling me to connect with the professionals and services I had respected and admired for so long, from afar.
Housing 2.0, Silicon Valley
During my first day travelling in California, I attended an interactive governmental-hosted housing conference – Housing 2.0: Re-Imagining the Housing System in Silicon Valley.
This pop-up event brought a network of professionals, academics, volunteers, founders, religious leaders and government figures to showcase and debate topics such as the tiny-home movement, land ownership inequality, gentrification and the incredible number of street homeless residing in Silicon Valley.
‘Housing 2.0’ asked the question: ‘How can we leverage such an incredible culture of enterprise and apply it to solving the housing crisis?’
Housing First is a strategy which provides people experiencing homelessness with permanent accommodation, along with the supporting services they may need to successfully maintain their tenancy.
This approach has developed great traction in the United States of America over the last decade.
Boasting an average 80% success rate amongst pilot schemes undertaken internationally the Housing First methodology is now widely cited as the most effective route to ending chronic homelessness, across developed nations.
With the UK hastily working to trial and test its own adaptations of the Housing First strategy, it is only a matter of time before housing as a solution to homelessness becomes the preferential method of address across Britain.
Indeed, the recent passing of the Homelessness Reduction Bill will see increasing pressures placed on local authorities to provide accommodation options for those who seek assistance.
There is only one (glaringly obvious) problem.
We simply don’t have an adequate supply of suitable property to meet such elevated demand: there are over 1.8 million households registered on social housing waiting lists. And so, presently, housing as a rapid solution to homelessness is an option which is largely unavailable to those who need it most.
One creative solution offered towards the affordable home shortage in California is the evolution of the ‘tiny homes’ and ‘micro-living’ movement: the growing popularity in creating compact and unique structural alternatives to standard or traditional housing.
Simply put, micro-living is a social movement where people are choosing to downsize their possessions and the living space which they occupy.
Ted Hayes, Justiceville USA and Dome Village
Whilst in Los Angeles, I met with Theodore ‘Ted’ Hayes, who created one of the earliest tiny-home communities in LA back in 1993.
Ted Hayes is the founder of Justiceville USA, a non-profit organisation which explores structural alternatives for people who are unable – or even unwilling – to return to a ‘mainstream’ lifestyle.
A project of Ted’s was the Dome Village which operated for thirteen years as a utopian vision to end homelessness in the city of Los Angeles, welcoming the needy into a small urban community of 18 dome structures on a vacant piece of land.
The polyester fibreglass dome units cost around $10,000 each to build and were relatively easy to assemble, repair and maintain.
During the village’s existence – which ceased in 2006, owing to a steep increase in the land’s ground rent – hundreds of homeless people, including singles, couples and families – were given a safe environment where they could rejoin with society and begin to thrive.
Modern Tiny Homes
‘Tiny homes’ generally contain all the essential facilities expected of a one-bedroom residence, ingeniously allowing an admirable use of a compact, dimensional area.
Innovation in such design and build is allowing exploration of community housing methods which are inclusive for all, with the modern trend seeing ‘tiny home’ villages sweep across the USA. There are many stunning visual examples to take inspiration from.
The typical American home is around 2,600 square feet and the average one-bedroom home in the UK is 495 square feet; by comparison, a small or tiny house is generally between 120 and 320 square feet.
According to RIBA, standard specification new-build homes in the UK can be constructed for approximately £626.48 m2.
Generally, costs for tiny home build in the USA range between $10,000 – $80,000 for a fully completed unit.
What Can We Learn?
Using ‘tiny home’ methods to maximise the potential output of residential building projects at home in Britain, we can diversify available space with adaptations such as;
- Replacing doors with sliding walls;
- Adding multipurpose furniture;
- Making use of sleeping decks;
- Installing retractable drawers for appliances.
Likewise, we can build upwards to incorporate storage and reveal a larger area of floor area to work with.
If each new development in the UK were able to further increase project efficiency by better utilisation of available space, could additional units of accommodation be added to the design of future building projects?
Would mass-adoption of these actions make a great enough impact to significantly increase housing supply?
Could abandoned or derelict buildings be converted economically in order to safely house communities of people who are estranged from mainstream society?
With the number of people living in Britain projected to rise by ten million to 74.3 million by 2039, 50,000 new houses would have to be built each year in London alone to keep up with demand and this is clearly problematic.
The idea of micro-living in Britain is becoming more and more attractive and exploration of tiny, temporary or prefabricated units could provide a viable solution to alleviating the demand for accommodation.
Investing in Buy-to-Let
Buy-to-let landlords are facing a lot of challenges.
Tax changes, new stamp duty rules and a tightening of mortgage availability may see the profits of investors and landlords diminish as these changes come into force.
For many property investors in London and the south-east, the numbers simply do not add up for ‘vanilla’ or conventional buy-to-let anymore.
Many are looking at alternative strategies, such as the shared-living, for the answer.
My practical research work has previously explored the creation of harmonious co-living spaces for those who needed rapid, affordable housing that some in the UK saw as radical at the time.
Now, however, shared-living is very much front-and-centre in the conversation that is going on between investors in the UK housing market.
But first, an example from New York.
Castle Braid Co, New York
Castle Braid co. is a unique community living space hosted within a 125-apartment complex in Brooklyn, New York.
Described by its owners as a ‘vision of interplay between the individual and the vibrant community they’ve helped to create’, Castle Braid is a free-space which is continually and creatively evolving.
The New York Post chose the building – home to artists, intellectuals, entrepreneurs and inventors – as one of the five most interesting residential sites in New York.
The developer, Mayer Schwartz, says his aim was to establish an “organically-growing group of young professionals in the creative areas“— by having them live together, sharing their skills and pooling their talents.
This ethos allows people of a similar nature to not just co-share; but to socialise, work and ultimately, create a community together.
This one-of-kind building project is a stunning visual example of innovation in design for the formation of a creative community living complex; one which is executed with a unique sense of haphazard precision and flare.
The Amenities at Castle Braid
The amenities at Castle Braid include a gym, library, screening room, games room and 6,000-square-foot courtyard, barbeque area and attached dog park. This helps connect the residence – an aim of Castle Braid which has remarkable success.
Residents decorate the space and Mr Schwartz has been known to reward residents with periods of free rent in exchange for their artistic services.
During my stay, I learnt that a sculptor received six months of no-payment, living in return for his creation of Castle Braid’s custom-made iron gate.
One example of this is Lancaster Co-Housing, a multi-award winning eco co-housing community consisting of private homes, shared facilities, workshops, offices, studios and outdoor space.
There are around 65 adults and 15 children live at the site; they eat some meals together, make decisions by consensus and enjoy socialising together in specially created common areas.
The cosy and comfortable home benefit from renewable technologies and residents live a lower impact lifestyle in many ways: through a travel plan and car club, cooperative food store and by sharing and swapping resources.
Being Part Of A Community
The benefits of belonging to a community with a positive focus and spending leisure time productively are too important to ignore.
Those who reside in semi-shared space can save money, divide chores, enjoy group activities, form lasting friendships – and ultimately provide a unique and invaluable source of support to each other through day-to-day life.
Investing In Shared-Living
For investors who are looking at long-term strategies, the co-living model is a way to maximise space and ultimately, financial return.
If you are thinking of investing in a shared-living model, whether that’s creating a city-centre HMO aimed at tech start-up entrepreneurs, or an affordable complex of units which will be leased to a local authority, here are some things to consider:
- Finances, Rules and Regulations
- Operations and Management
Finances, Rules and Regulations
Letting any type of shared housing is a big step away from ‘vanilla’ buy-to-let and there are many different options and strategies to consider.
Mistakes can be very costly – and ultimately lives are at stake.
Whilst you may have a great idea for a project in your chosen area, is the need there?
You can run test adverts to gauge response and speak to local agents to find out what the demand is like.
Contact local housing associations too – many are looking at new ways of working and are keen to form sustainable relationships with the private sector which demonstrate value and benefit on each side.
There are lots of different co-housing communities to consider, the most common (and now, most saturated) market in which to operate, are student lets.
Over the last few years, high-end and ‘boutique’ HMOs have become more and more popular, with investors targeting young professionals and graduates with gimmicks and gadgets such as USB plug sockets and Netflix subscriptions.
The social marketplace has an ever-increasing demand, though this is a notoriously tricky and specialised environment in which to operate.
Operations and Management
The management of properties which are habited by multiple occupants is always going to be more time-intensive than that of a traditional family house.
Running costs will be higher and there could be increased instances of breakages or damage and more wear and tear.
If you aim to provide extra facilities, think about the upkeep and maintenance of those too. Who will manage the property day-to-day? Is there a specialist managing agent in your chosen area?
Putting It All Together
The cohousing or house of multiple occupation model is a great way to maximise both available space and rental return and it’s almost certain to be a way of living that will increase in popularity over time.
Over the next few months I’ll be looking at each in more detail I’ll also be interviewing those that are developing and operating shared housing for all kinds of occupants – please let me know any questions you have on the subject for me to put to the experts.