Gallus Property - Tips for Investment

Gallus Property Tips for a Profitable Investment

 

Researching investment properties on behalf of our client and our own portfolio is a key part of Gallus Property.  Here’s our top tips for a profitable investment:

 

Research the Area

 

This one is quite obvious but essential – Prior to beginning your investment search you should carefully consider which areas to focus on.  Try and consider the market that the property will appeal to, if it’s a house does it have a nearby school?  Near a University or College for students?  If you plan to rent it out or sell it your priorities may change so think carefully about who would live in that area and why your investment property would appeal to them

Research the nearby sales and rental prices and consider how your investment property will fare in that market, needless to say you should use conservative figures in calculations

 

Talk to Local Agents

 

Before committing to an investment it’s very important to speak to local agents to find out what the rental or sales valuation will be, especially if you plan on doing a programme of refurbishment when purchased.  Consider using a specialist company like Gallus Property for a hands-off investment strategy - A Local and experienced investor could save you time and money and help you avoid the pitfalls of a bad purchase

 

Have a back-up Plan and Exit Strategy

 

As ever the market can change and if you plan on flipping a property by refurbishing you may want to make sure that you have a good plan if it doesn’t sell.  If you have purchased in a strong sales and rental area then your investment will be safe.  Just make sure you have an exit plan so that you can always re-sell or rent the property.  Calculate the worst-case scenario of what could happen – Doesn’t sell, low rental figure, market becomes sluggish.

 

Consider Financing and Budgeting Options

 

Prior to purchase you will need to think carefully about finance.  Consider talking to a financial advisor who can arrange mortgages and if buying a run-down property then bridging finance.  Depending on the circumstances you may wish to re-finance the property after refurbishments are complete to move on to the next project, just make sure that your valuations and calculations will match up.

Prior to purchasing a budget should be prepared for any works that are required prior to renting or selling, this is important to calculate what your total spend is.  If you are not familiar with refurbishments then try and get local and trusted tradesmen to provide quotes prior to purchase

 

Appraise the Property

 

When looking for the investment property study the Home Reports closely and ensure there is a ‘Mortgage Valuation Certificate’, if there is not one then proceed with extreme caution – Often the Home Reports without one are not worth the paper they are written on.  Most commonly this happens with auction properties (which should be avoided unless a savvy and experienced investor)

Be very cautious of some issues which may become expensive and render the property unprofitable – Problems with communal roofs, expensive factors fees due to building issues, damp and structural problems.  If they have a ‘2’ or ‘3’ on the Home Report then you will need to factor this into the purchase price to repair.  Just beware that some of these problems can be long standing and expensive to repair

 

Be Cautious

 

As with any investment if you make critical mistakes your investment can become costly and unprofitable.  Use caution and think logically – The numbers and the risk must all stack up.  A cautious investment is better than a risky one.  Do not get overly excited and make an offer that you will regret

 

 


Buchanan Street Corporate Apartment Glasgow

Maintaining a Profitable Short-Term Let

Maintaining a Profitable Short-Term Let

In the previous blog we talked about preparing your property for a short-term let, now that it’s prepared this guide will show how to maintain a profitable listing

 

Understand the Algorithms

 

One of the common questions we get when a new property has been listed is ‘Why is the price so low?’

Simply put when a new listing is put on you are at the bottom of the search results after your ‘New Listing’ status disappears, this means you need to get people through the door and get some good reviews before you move up the list.  The easiest way of doing this is to crash the price for a month or so, get some good reviews and maintain your response rate and you will start climbing.  It’s imperative to understand that the Algorithms of each site work on occupancy, page views/booking rate and price.

Some of the best looking properties I have seen on Airbnb are £150 a night and at the bottom of the search results - increase your occupancy and lower the price until you find that sweet spot that puts you in front of competitors

Currently our best performing listing achieves 90% occupancy which is almost unheard of, for the reason that we reduce the price and focus on occupancy

 

Use Pricing Software

 

Not 100% sure which conference is in town this week?  Don’t worry about it – Use pricing software and you will never again have to worry what concert or conference is on, it works with algorithms and data in your City to automatically adjust the price dependent on demand, it can be quite cheap and will help maximise your revenue in the busy periods and reduce the price to increase occupancy in the quiet months.

A top tip is always check the prices manually, I don’t like gaps in the calendar and prefer to sell a night below the minimum than have an empty listing.  Adjust the price if there’s only a few weeks to sell out a day and increase your chance of last-minute bookings.  If you want to get really geeky you can set up customised rules

 

Automate The Process

 Consider using a channel manager which allows you to send automated messages.  This is specialist software which syncs to your account and allows a listing and calendar to be shared across various channels, it is especially important if you manage multiple listings.  With the best will in the world the chances of forgetting to send check-in instructions on occasion is quite high.

If you have cleaners you can give them access to the calendar so you don’t have to call or email them every week to schedule the cleans

 

 

Ensure Good Reviews

 The main two factors that guests use when selecting a property are the pictures and the reviews.  As shown earlier the algorithms are important to ensure you have a highly visible listing on Airbnb, booking.com and Expedia.  An essential part of this is the reviews you received from guests, so what can you do to ensure good reviews?

 

Automated messages with check-in instructions help keep the communication smooth but regular (and quick) communication in response to special requests and information are great for guests.  Gallus Property always create a handy guidebook with not just check-in information but directions, parking information, and a comprehensive guide on how to work everything in the property.

 

Other important tips for good reviews are to honestly solve all problems as quickly and effectively as you can, small touches like a welcome pack, coffee machine and toiletries are great to keep guests happy.

 

If you need more hints and tips then get in touch and see how we can help manage your property


Renovating on a Budget

When renovating a property it is important to maximise your return for the amount spent, especially if you are doing a lower end project with tight margins.

It's actually quite incredible what you can achieve on a small budget though.  Simply replacing lightbulbs, adding fresh paint and re-arranging furniture can make the world of difference.

Here is a recent example of a clients property in Glasgow which was renovated on an extremely tight budget.

We used some leftover white mould resistant paint which has an eggshell finish, some mould resistant silicone sealant around the back of the sink and a new lino floor which was £80 supplied and fitted.

Tired and dated kitchen. Magnolia on the walls and a dim lightbulb made the space feel very dark.
Flooring was dated and peeling so needed replaced

 

Fresh paint, new floor and a new silicone sealant. Cheap fix, not perfect by any means but it looks a lot fresher and only cost around £100

 

A kitchen which now looks useable!  New Lino floor was only £80 supplied and fitted

 

This property had been seriously lacking investment for years on end, so much so that the hallway only had one (yes one!) working lightbulb.  As the ceilings were quite low and I wanted to save money on shades I bought some large Ikea lightbulbs which work as a stylish alternative.  They look a bit whacky but I think they're ok, at £6 they are great value:

 

One dim and lonely bulb working. Careful not to bash into the walls in this dark hallway!

 

Ikea is your friend. Remember that

These two jobs were fairly straight forward and the price was very reasonable.  As much as there is great satisfaction in a high-end job with a large budget, its sometimes as satisfying spending less and transforming the look and feel of a property on a small budget.  It really is incredible what a touch-up of paint and new lightbulbs can do for a room.

If in doubt paint it white and put in some good lighting!

Get in touch today if you would like more tips or help with your property in Glasgow 


Gallus Property Guide to Becoming A Hands-Off Landlord

Gallus Property Guide to Becoming a Hands-Off Landlord

 

If investing in Property is only a side to your main career then you will want to make sure that you invest wisely and create an investment this is as hands-off as possible. 

 

There may always be some level of commitment required but planning ahead and preparing can save you time and money in the long run.  Here is the Gallus Guide to becoming a Hands-Off Landlord 2019:

 

Property Sourcing

If you have not yet bought a property then the first stage is deciding which area will make the best investment.  Cheaper areas can provide better yields, you may have more problems with tenants and repairs.  Beware especially of unfactored blocks of properties or flats which are not well managed communally as these could end up being costly and time consuming. 

 

Consider the Gallus Property Investment solution to assist with the search if you are not familiar with rental properties or areas

 

 

Tenant Screening

 

The right Tenant for the right property should be carefully referenced and screened prior to accepting their Tenancy.  A good Tenant which pays rent on time and respects the Property is invaluable and will allow the Landlord the ability to be hands-off during their Tenancy

 

It would be wise to use a referencing agency or Letting Agency for this. 

 

 

 

Empower Tenants

 

How often do the same issues come up – radiators need to be bled, boiler pressure is low, condensation on the windows or even mice.  If you give your Tenants the knowledge to deal with these issues they may even be resolved before you get the phone call which allows you to be as hands-off as possible.

 

The only issues you should receive will be unresolvable by the Tenants

 

 

Use Technology

 

It’s 2019.  Why are documents still printed and signed?  Use Technology to streamline your operation as much as possible – Video walkthrough inventories, software which gives reminders when certificates expire and even Tenants signing documents can all be done online, save yourself the stress of firing up your printer.

 

You could even Facetime your Tenant to look at a reported issue, just make sure your tenant is happy to do everything online or by email

 

 

Professional Property Manager

 

Using an experienced Property Manager could save you endless heartache in the long-run.  With a myriad of legal requirements and paperwork it pays to have your property professionally management.  This is the simplest and quickest way of putting your feet up with a hands-off investment, no more emails and phone calls.

 

An experienced Property Manager like Gallus Property will also know the quickest and cheapest solution to the problem, potentially even saving money should anything go wrong

 

 


Building a Property Portfolio at 30 Part 2

By Matthew Gunn

Moving out of the property in Mount Florida I bought another refurbishment property on Forth Street, Pollokshields.  We managed to get this one £5k under the home report having missed out on a few others, it was a bizarre property with a standard two-bedroom layout out upstairs and then a staircase led to a downstairs storage area that was really wasted.

To make use of this space we removed a wall and supported it with a goalpost frame as well as created an internal en-suite and walk-in wardrobe area by moving a doorway and creating ventilation and pipework for the en-suite.
Architects drawings, Structural Engineer assessment and a Building Warrant were required for these adjustments

 

Basement / Master Bedroom at Forth St after renovation works
En-suite bedroom created from what was previously a storage cupboard

It needed a lot of work throughout but this was done over time whilst I was living there, almost everything that could possibly go wrong in a flat did at this property.

I learned a lot of valuable lessons including how to deal with mice, internal condensation, damp, cracked and damaged walls and so forth.  As of today it is currently under offer and has received an offer well in excess of the Home Report, though it was a lot of work it was ultimately a good buy, the experience of renovating this property myself was invaluable

Another two bedroom property on Victoria Road made a good profit, we bought and sold this within two years without doing any work.  It was rented for £700 pcm and made around £25k profit, the housing market helped here.

Using the profits from these sales and with some extra investment we decided to buy more buy-to-let properties.  We focused on properties that needed a bit of work but could be bought at a reasonable value.

We purchased a two bedroom on Maxwell Street which was rented for £1,000 pcm.  Having been recently valued and with minimal work this has gone up around £20k in value.

A two bedroom on Howard Street, a two bedroom on Buchanan Street and a one bedroom in Merchant City now complete our portfolio.  Every property has been renovated to some degree and all of them have appreciated significantly in value.

Click Here to see how Gallus Property can help with short-term letting properties

Wilson St prior and post refurb

 

Having been made redundant at the end of 2018 and having some of the properties in the portfolio managed by letting agents and short-term rental companies I decided to pursue a career full-time in property management.  Using the experience of purchasing, renovations, selling and letting I decided I had the required experience and knowledge to do a superior job to many of the agencies which I believe lacked the knowledge and skill in property to manage.

So Gallus Property was born, and brings the knowledge of being a property owners to Landlords.  Starting with short-term rental management we have now expanded into traditional lettings even property investments.

We believe there is a gap between Landlords and their Letting Agents which Gallus can fill.  We operate a 'No Hidden Fees' policy and clear pricing structures so that Landlords are safe in the knowledge that their Property and investments are safe in our hands.

Click Here to see what Gallus Property can offer to Landlords as a Letting Agent or for Investments


Building a Property Portfolio at 30 Part 1

By Matthew Gunn

As with anything else in life, building a property portfolio with limited experience was a very steep learning curve.  After several years and a lot of hard work that has been achieved, albeit with many mistakes (as well as successes) along the way.

The housing market has both helped and hindered at various times but regardless there were valuable lessons learned and all things considered now in a better position with experience and assets to show.

So how was this achieved?  It all started with a family member wanting to buy a property with savings and pensions as a retirement fund.  We searched together and there was one flat in Mount Florida that stood out like a sore thumb – The proportions to this four-bedroom were quite incredible (including a fireplace in one of the bedrooms!)

When you are house hunting for yourself you always get that feeling when you go into a property and it just appeals to you, it’s advisable to trust your gut when house hunting yourself but not so much when it’s an investment or buy-to-let.

This property needed a bit of work but it really was a gem, the housing market was stagnant at that time and it was purchased below the Home Report value – always a bonus.  After living there for several years and house sharing it was  renovated with a new kitchen, bathrooms and flooring throughout.  Eventually it sold for a tidy profit as the housing market was now buoyant in Glasgow, the rental income generated during the years living there was around £900 per month so this was all round a great investment as most of the refurbishment money came from the rental income.

Prior to this sale I myself bought another two-bedroom tenement at Kingspark Road, Mount Florida with some savings from working offshore, again at the time of purchase the housing market hadn’t quite picked up yet so again a price was agreed under the Home Report.  This was rented out for two years at £600 pcm prior to selling off the market, despite having to deal with a wet rot issue prior to sale again a good profit was achieved on this property which allowed us to move onto other purchases.

The next purchase was the most dubious purchase to date, having made some profit from the previous properties we had money to burn but didn’t see enough of interest coming on the market.  We decided to gamble on an auction property purchased through a well-known Glasgow Auction House (you know the one), this was a complete refurbishment of a decent sized three-bedroom on Daisy Street, Govanhill.

This investment was purchased without viewing,  which I would thoroughly not recommend, the solicitors jaw nearly hit the floor when I called to explain the situation!

It was a calculated guess that the property would be in a run-down condition and a complete refurb on the cards again, the condition was somewhat a surprise even to us.  Without going into graphic details we required pest control as well as completely stripping out everything within the property - the stench was unbearable.

A separate blog post may be more appropriate but I would advise any purchasers to treat Auction Properties with extreme caution, the Home Reports are generally not worth the paper they are written on – Beware!

Anyway after another solid refurbishment with budget in mind we did manage to sell it within a couple of weeks and still turned a decent profit.  Considering that Govanhill at the time was not the best area it was a good result to turn a profit on this investment – lessons learned all round and onto the next project...