Diary of a Property Investor UK – Managing large portfolios

Diary of a Property Investor UK – www.hbfinvestor.co.uk

Managing large portfolios!

The biggest issue facing property investors with large portfolios is management of their profits and cash flow – primarily driven by managing voids, arrears and refurbs.

The most basic mistake of these property investors is that they do not have a grasp on this.  Often this is due to them being busy on other businesses and projects and they have not delegated the responsibility for management and control of their portfolio to the best person they can find! 

Many investors are relying on their letting agents [which there could be many located over the UK] to do this job for them and this is a very risky strategy that in my experience doesn’t work.  He who shouts loudest works with many estate agents and unfortunately some do not really care if your properties are vacant for a few months and the majority are not proactive in getting them ‘sorted out’ quickly without direct intervention from the landlords.

I have been getting my properties that come empty turned around in a week.  My builders get me tenants lined up as soon as the work is done by knocking on the neighbours doors to ask them if they know someone who will rent it.  We have almost a 100% success rate with this approach as often these neighbours have friends or family who are looking for a place and how perfect it is that they have found a place so close.

If a portfolio is managed correctly there should be no more than 5-10% voids and non-payers.  Some property investors are running at up to 15-25% and run into cash flow crises and go bust!  The crazy fact is that by employing someone with he right tenacity to manage a portfolio these voids and losses can be sorted in a day or a week saving investors many £1000′s/month.  It obviously pays for these investors to employ someone to do this but there complacency and reluctance costs them dearly.

My recommendation is to employ someone with lettings experience and who you can incentivise to manage your portfolio as tight as possible.  Have your builders/agent to knock on neighbour’s doors and get properties tenanted within a week of coming empty.  It can be done and we are doing it and it works for us so it can work for you.