Ivan Tait Property Limited

01/06/2023

Following on from part 1 - The 4 profit Levers.....

Enjoy.

23/05/2023

Any questions?

Always happy to help....

02/05/2023

My last project – Part 9.

Running costs!

Remember the last ROI – Your Return on Investment, sat at:
Cash in hand (£12,000) / Money in the deal (£73,000) x 100 = 16.44% ROI

The £12,000 Cash in Hand is an estimate – worked out on comparables in the area and with your monthly costs removed.

Monthly costs – Figures are rounded for clarity:

Mortgage: £540 (Specific Holiday Let interest only mortgage)
Factors Fee: £100
Utilities: £100 (Electric + Broadband)
Cleaning: £220 (Average per month)
Laundry: £160 (Average per month)
Rates: £40
Insurance: £20
TOTAL: £1,180 (£14,160 Per Year)

To work out the estimated £12,000 Cash in hand (Profit). I took a minimum turn over from comparables at £26,000 - £14,000 monthly Costs.

Note 1:
Not to forget the £6k overspend on refurb – Pay off over 2 years on the 0% credit card.
This would work out at £3k per year off your initial profit and reduce your ROI for the first 2 years down to 12.33% - Still worth it, as this is a long-term strategy and I will never sell my investment property!

Note 2:
ROI could still increase as the turn over was calculated at the minimum!!

As always – if you would like to hear how we can help you in property please give us a shout!

26/04/2023

My last project – Part 8.

The finished article.

Time to advertise – this can be very exiting as you wait for your first booking to come through!

But have your team ready!!! If its your first project you might consider doing most of the work yourself – this gives you a good feel for what’s needed and required or you might just not have the time! In that case:

1) An integral part of our business are our cleaning companies – we use 2, so that were never short handed.
2) Laundry – A good laundrette is essential.
3) Handy person – for those quick fixes, like a leaking tap, touch up paint work etc.

I have used management companies before, but feel you lose the personal touch and as we grow our business I need to understand all of the workings of it. In the future the plan will be to hire a VA (virtual assistant) who will look after the bookings side of the business. But for now we manage our booking ourselves and us 2 of the largest OTA’s (online travel agent) out there - booking.com and Airbnb.

The great thing about this is that you can ical the calendars together for peace of mind and simplicity.

You can also automate your emails as guests’ book, saving you time. I have them set to thank guests after a booking is made, entry procedures sent out prior to arrival and a final one prior to departure – thanking them again and asking if they would be so kind as to leave a review.

Make sure you get professional photos taken – it’s the first thing that potential guests see and they will make a decision on what they see.

Have a welcome pack made up – this explains to the guests who we are and adds that personal touch again, explains the smooth running of the apartment and tells them about local points of interest, restaurants and pubs we like and also how to get in touch with the emergency services.

Now that everything is ready – its time to tell the OTA’s to go live and wait for the bookings to come in!

https://www.airbnb.co.uk/rooms/51010218?preview_for_ml=true&source_impression_id=p3_1682512459_V8n8HJwsaGh3YPfH

If you have any questions at all on the whole process then just give me a shout – I’d be happy to chat and help you out.

Next post will be running costs.

21/04/2023

My last project – Part 7.

Kitting the property out - £8,000 – again estimated on experience.

This is when it all starts taking shape, but be aware that overspend is easy – You are NOT furnishing your own home but you are creating a clean, functional, comfy home from home feeling for your guests.

It takes time to gather everything up – so I start buying the essentials as soon as missives (legal paper work) have been signed.
Its handy to have somewhere you can store all this and be aware that when ordering your suite the lead time could take a number of months!!

I also look through Facebook market place where we found the kitchen table and chairs and use second hand shops to fined the small room furnishings – vases / ornaments etc.

We buy our mattresses new from a local furniture store as the reviews and comments we have had have been great and a really important factor in getting positive reviews.

Total kitting out cost: £8,500

Cash in hand (£12,000) / Money in the deal (£73,000) x 100 = 16.44% ROI.

Note 1:

Money in the deal: £47,000 Purchase of property.
£8,500 Kitting out cost.
£17,500 Refurb cost.

Note 2: Still far exceeding the interest rates that banks give you! – Food for thought.

Next post will be finished property and advertising – stay tuned.

14/04/2023

My last project – Part 6.

So where was I now with my figures?

Potential earnings were still sitting at £12,000+ (I always use the lower figure to build in some fat!)

The money in the deal had now gone up due to the increase in refurb cost – From £10k to £17.5K

Remember the ROI (Return on Investment) formula?:

Cash in hand (£12,000) / Money in the deal (£72,500) x 100 = 16.55%

Note 1:
Money in the deal:
£47,000 Purchase of property.
£8,000 Kitting out cost – again estimated on experience.
£17,500 Refurb cost.

Note 2: Still far exceeding the interest rates that banks give you! – Food for thought.

Next post will be the kitting out – stay tuned.

12/04/2023

My last project – Part 5.

The refurb - £10,000 (Estimated!)

We managed to do the refurb in 7 weeks.

It all went to plan apart from the original radiators and a bathroom window that didn’t work!

The rads were the old electric storage heater type. After discussing with the electrician, we decided to replace them with wifi controlled radiators that would be more cost effective down the line.

Great for being able to set the parameters on how warm or cold they go and ultimately allow you to switch them off remotely to cut down on costs! + many more great features.

Only issue was I hadn’t budgeted for this and it cost me £5000 extra + the bathroom window was an extra £970!

That was my contingency of £3k well and truly blown or was it!!!

What did I do?

Anything I could put onto a 0% credit card and then pay off over the period of 0% I did. This is good debt if managed correctly! What constitutes good debt – Having someone else pay it off (the guests) and still making money on top of that through the night rate I will be charging.

Total refurb cost: £17500

Of which £6k not budgeted for and put onto 0% credit card for 24 months works out at £250 per month repayment.

So actual refurb cost: £11500, which left me with £1500 cash from the contingency fund.

10/04/2023

My last project - Part 4.

Costs V’s Potential earnings.

What are the costs associated with my last project?

Kitting out costs - £8,000:

We like to provide a clean, stylish and comfy environment for our guests with that hotel minimalistic look, but ensuring that all the essentials are there! Fully equipped kitchen, good quality mattresses and hopefully that home from home feeling.

Refurb Costs - £10,000:

I had planned to do most of the work. A) To save costs, and B) I was so time restricted to get this over the line that any of the trades (apart from my painter!) were busy for months and I couldn’t wait that long!

Usually I would use trades, build that extra cost in and use MY time more productively!

Note: Estimating your refurb cost - You can have as many viewings of the property as you like. The problem with that is someone could beat you to an offer that’s accepted (In Scotland). So you need to know what you’re looking at when you go round. What’s required to get it up to scratch, make good notes and take lots of pictures to refer back to when you get home. Or take someone who knows – Do you know any trades person with the right knowledge who could help you?

Contingency - £3,000:

Always a tricky one. But that’s all I had!

Potential earnings - £12,000+ per year:

Note: It’s important to realise that there’s a lot more info required to work this out – so you know your break even point and how your occupancy levels affect your income.

This is key to working out if the project will be feasible. I already own several properties working as SA in the surrounding area and know what they bring in so that gave me a starting figure, but to get a more exact – check out your competition and do your due diligence. Check out other OTA’s (Online Travel Agents) – like Airbnb and Booking.com and use like for like on your comparisons. Example – if its 2 bed, then compare your 2 bed to other 2 beds! Ensure you also compare finishing standard to how you will have it furnished in the end and ensure your comparisons have forward bookings too!

I ensure I have a minimum of 5 comparisons which I can then work out a nightly rate and in turn work out a potential yearly income. Remembering to remove ongoing monthly costs!!

Therefore:

Cash in the Hand / Money in the deal x 100 = ROI (Return on Investment)

£12,000 / £65,000 x 100 = 18.46%

With that % return I was happy to proceed with an offer on the property!!

07/04/2023

My last project - Part 3.

Before we get to costs V's potential earnings and what your ROI (Return On Investment) works out to be!

I'll show you some pictures of the rip out.

If your going to be doing any refurb work then this will be the messy stage!

Make room!

TIP:

Plan where you are going to be removing all the rubbish / rubble to? Some councils will charge you for unloading a van or maybe easier to get a skip - if that's the case have all your rubble bags filled and everything ready to go. Order skip / skip arrives / fill skip (before everyone else in the neighbourhood does!) / Get skip collected / repeat if required.

On this project:

- Removal of all existing furniture.
- 1 x New Kitchen
- 2 x New Bathrooms
- Removal of all the old electric storage heaters x 7
- Removal of cupboard in Bedroom 2 to create more space for 2 singles.
- careful removal of hard wood flooring in bedroom 2 where cupboard was to re-use in kitchen due to new kitchen layout.

06/04/2023

My last project - part 2.

Breaking down the finance for purchase.

Did you know - That once you own 4 properties you are considered a portfolio landlord by your lender (mortgage company)!

What does that mean?

Your lender wants to see that you have more skin in the game and generally wants to see that your next and current properties all have Loan to Values (LTV) of 75%.

That basically means you need to find 25% of the deposit.

Figures are rounded for clarity:

Purchase price: £152,500

Deposit @ 25%: £38,000
LBTT £150 (Stamp Duty in England)
ADS £6100 ( Additional Dwelling Supplement)
Solicitor Fees £1800
Mortgage Broker Fees £900

Total: £47,000 For purchase of the property.

You will also need to consider the following costs to run a Serviced Accommodation:

Kitting out cost: Between £6000 - £10,000
Refurb costs: £?
Contingency: £?

In Part 3 I'll talk about what these costs are.
Then adding all these costs up V's potential earnings and what your ROI (Return On Investment) works out to be!

You can then tell prior to purchase if the property stacks up!

Please stay tuned.

03/04/2023

My last project - Part 1

Purchase Price: £152500. This included most furnishings / white goods / some kitchen ware etc.

Offer went in at the end of June and we completed on the 1st Sept 2022 - Just over 2 months.

The key to completing fast is to have a great team behind you (My mortgage broker and solicitor). Talk to them before you do anything! I then had them working simultaneously to get this property over the line.

With the new Short Term Let Licence coming into force on the 1st Oct 2022 we had to move fast.

Clean the place up a bit.

Buy anything else we initially required.

Get it booked, prior to the licencing rules coming into force!! (As it stated you had to be operational prior to the new rules to allow you to continue operating).

We contacted all our previous business clients and offered them a very favourable rate if they would book our place if they had work in the area.

Thankfully we got our booking!

We could finally relax a bit, before we would temporarily close down and start the refurb.

Pictures prior to refurb!

31/03/2023

Why do I do SA (serviced accommodation)?

Well - It’s a great cash flow strategy.

Did you know that the right SA can bring in over £750 per month in profit!

That’s a minimum of £9k year on year out for life!

How many of those would you need to replace your income?

26/03/2023

Day 3 - what a conclusion to an utterly fantastic event!

Can’t wait to start implementing what I’ve learnt and taking massive action.

Invest in your self. Invest in your future.

🙏👍🏼❤️💪

25/03/2023

3 day event with Paul Preston!!

Learning about how to raise finance and public speaking! Who’d of thought - but definitely provided a light bulb moment!

Fantastic energy, great like minded people and friendships made. 💪🙏❤️👍🏼

10/02/2023

Our new Property in Inverness!

Advertised on Airbnb and Booking.com as:

Modern City Centre Apartment in Inverness.

06/06/2022

06/06/2022

Hello all!

I have been quiet on here for a while!

But have been busy….

Acquired our new apartment after working with the seller every part of the way and provide them with certainty of sale.

Has all paid off.

Concluded the sale last Monday and have work tirelessly to add to our serviced accommodation / holiday let portfolio.

Going live very soon ❤️🙏👍🏼💪

Photos to follow 😁