I am always looking for ways to improve our offering to our clients, and as such I am fascinated by other businesses and their approach. When Jason West became one of our tenants, his whole business model intrigued me, and got me thinking about the future of buy-to-let.
Buy-to-let, cursed by negative press, challenged by changing legislation, is nevertheless still considered one of the most preferred investment routes. Many landlords continue to purchase property for long-term rentals, yet if the truth be told, we live in an expensive area, making yields unattractive. So why is Jason’s tenancy so different? I sat down with him to tell you his story.
Can you tell me how the idea for homeapartment.co.uk came about?
I’ve always been interested in property, and have a portfolio of buy-to-lets myself that I’ve built up casually over the last 10 years. I came across a webinar talking about serviced accommodation and using regular flats and houses to offer people an alternative to staying in small hotel rooms. For example, perhaps a contractor has been given a 2-month contract to work in the local area. They don’t want to stay in a hotel for 2 months, or take on a property on a standard minimum 6-month AST. We can give them a true home from home experience with numerous benefits, such as more space, parking, full washing and cooking facilities, with everything provided such as towels, linen and even a weekly cleaning service.
I saw the benefits of your tenancy for our landlords, but do all estate agents feel the same?
Most agents are willing to listen and once they understand why we would be a great tenant, they then try and convey those benefits to the landlord. Sometimes this works well, other times the message is lost in translation, and the landlord refuses. With the agents we do work with, and who we now rent a number of properties through, they are all happy to provide us with more once they see how well we look after the property.
Can you describe the benefits for a landlord?
Being a landlord myself, I understand that we usually just want a decent tenant who will look after the property and pay the rent on time. However, as we all know, that is certainly not always the case. I have seen so many properties abused by tenants, and everyone knows a landlord who has had to evict a non-paying tenant. Only the other day I went to view a property to rent where the previous tenant was eventually evicted, having owed £10,000. They also ruined the property and even cut a hole in the decking to put their cigarette butts!
Having us as a tenant is a whole different story. For a start, we keep the property in immaculate condition right from the outset and have professional cleaners in every week, who not only clean, but also serve as our eyes and ears to ensure the property is being looked after by our guests. Payment of all bills is set up via direct debit as soon as we take over the tenancy, so everything is paid on time. Our guests who stay at the property are respectful of what they see as our home, and we have strict rules about who can stay. We don’t allow students, stag or hens, events or parties, or even groups of under 21s. Primarily, they are corporate guests who are working in the area for a few weeks or months at a time. They are mostly out working during the day, and the property is only booked for 70% of the time, on average, so there is certainly no increase in wear and tear, which is often one of landlords’ worries.
We welcome agents’ usual inspections and offer landlords the chance to come and stay in their own property, something you certainly would not be able to do with regular tenants.
Why do you think your business works?
We wanted to offer people a home from home experience but with all the usual benefits of a hotel, like fresh white linen, fluffy towels, and luxury toiletries. I always try and find properties with parking too, which makes life simpler for the guests. People have responded really well to our model of providing them with high quality, spacious accommodation in great locations, and they love our virtual concierge service.
I have been questioning whether this could be the future of buy-to-let, what are your thoughts?
With the rapid expansion of AirBnB and Home Away, people are absolutely starting to see the benefits of staying in a home and not in a soulless hotel room. They want more space and comforts for the same money they would usually be paying per night. Both AirBnB and Booking.com have dedicated business traveller sections providing apartments suitable for the corporate world too, as companies realise that they can save money by putting their employees into apartments rather than hotels.
For buy-to-let investors who want to offer their properties in this way there is more income to be made monthly; however, there is a lot more work if they are doing everything themselves. Our company offers landlords either the option of us renting the property as normal, either directly or through an agent, or alternatively we can set up a joint venture with the landlord to increase their monthly income.
Thank you, Jason
This model only caters for corporate and holiday lets, therefore it’s not suitable for those renters seeking a home. Private rentals continue to increase in demand, and figures are predicted to rise further, with some suggesting that the number of people in private rentals may soon exceed homeowners.
Although this rental model is not for all landlords, it could provide a solution for those looking for a longer-term, hassle-free tenancy.
For more information on attracting a corporate tenant for your property, contact LeaderFox on 01202 721999.