Alex Williams: HMO Landlord shares tips from decades of property experience
I am particularly pleased to share this interview with property developer, builder, and successful HMO (houses of multiple occupancy) property investor, Alex Williams. I first met Alex in Swansea. At the time I was looking for a builder to help me with a particularly challenging property purchased in an auction.
Over time, it turned out that Alex was far more than a builder, having successfully built and managed his own formidable portfolio of HMOs (houses of multiple occupancy).
Tips from decades of property experience
In our first chat (yes we will be publishing more over the months), Alex Williams shares his insights from the beginning of his property journey. These insights include:-
- the dangers of Joint Ventures,
- assembling your power team,
- what it means to become a great landlord,
- ensuring and protecting your profitability.
For those with bad connections, we’ve written up the majority of Alex’s insights in note form below the video. However, when you have time and a stronger internet connection, we do recommend you watch the video as there are a lot more insights than covered in our notes.
Work Like a Dog
In order to raise finance, Alex worked like a dog, with no family commitments Alex worked hard in order to save the money for his initial investment. He then moved on to joint ventures (JV) with his friends.
Although Alex was lucky to be working with great honest friends, he was also unlucky. Alex found that out of his group, he was much more interested in both the property and management aspects of being a landlord. As a result, Alex ended up doing most of the work. Eventually, he felt that he had to buy his friends out.
To this date, he’s refused to do any JVs with any friends or family that have approached him. After his initial JVs, Alex told us that he was wary of entering into more due to the possibility of damaging that relationship. He said, “Looking back, you need to be friends with people but also be prepared not to be friends with people in order to run a property or any other business properly.”
However, Alex offered some advice for those who are thinking about, or currently in a JV: You need to have it out with people that you go into business with because it clears the air and helps you move forward.
Find and Build a Reliable Team
When it comes to finding a good team you’ve just got to go through people, a lot of people. You build up a core of people that you stay with for ten or more years. However, there are a couple of traits that you’ve got to avoid; arrogance, people that are looking for a quick buck.
With that said, those looking for some quick cash are great for quickly doing projects but long term you want people who are loyal and looking for job security.
Once you get to a certain stage you’re going to need a team around you 24/7, all year round. Make sure you treat people well and pay them fairly, then they’ll always want to work for you. If you’re a bastard, they’ll demand more from you. If you’re nice, they stay with you and respect what you’re about.
Don’t get over excited when it comes to projects. Even if you’ve got the flashiest rooms, tenants begging to live in your property, and are able to get an above market rate rent, calm down. Unless you know that you can still be letting this property out 20 years from now, you need to chill out.
The skill of land-lording comes from managing a large, full estate, and keeping the maintenance cycle going so that your properties are always occupied, and of a high standard.
A common pitfall with new landlords is that they get too excited by the short term gain of their place, and don’t build the necessary systems into their business to keep it indefinitely sustainable. The real skill is having the property in order and full, years after you bought it.
When making business decisions with tenants, you need to think; “I need to be right, in my pocket”. Be careful about making moral decisions and reflex decisions (based on emotions) that will hurt you financially.
Alex gave us the example of a tenant asking to do x,y,z that isn’t covered in the tenant agreement. You tell them “No” they may leave and leave you out of pocket. So, you need to think about the decisions you make, and you need to ask yourself (within the law) is this decision the right decision for my pocket?
Watch Out for Cake Slicers
You want to be careful of people who want a slice of your cake, often agents and property managers will top slice your profits. You need to be wary of these additional costs that, although may not seem like much, are taking parts of your profits for their own.
Finally, you need to be liquid. If you don’t have a high enough bank balance to pay the bills you may as well just give up. Even if you’re worth a ton on paper, lawyers, banks, and other financial institutions will take it all away if you can’t pay your bills.
- Work hard – property is a business not a get rich quick scheme.
- Don’t consider a JV (joint venture) unless you and your JV partner are prepared to be open and honest with one another about your expectations. Sort out a worst possible case scenario with your JV partner should things go wrong.
- Find and build a reliable support team. Finding your support team may take a while as people aren’t necessarily as reliable, loyal and straight forward as they may initially seem.
- Don’t make emotional decisions s it will affect your finances and peace of mind. If a tenant or supplier has upset you – take a few steps back to calm down and think logically through the situation. Once you are calm then respond.
- Watch your bottom line. This is your business and needs to remain profitable. So factor in the costs of property agents, mortgage brokers, solicitors before you buy and rent your properties.
- Keep a reserve in the bank for disasters.
Huge thanks to Alex Williams for chatting with us and sharing his insights. If you haven’t watched the video, please do as there are a lot more insights than in our notes. If you found the Alex’ story useful:
- Like the video and subscribe to the channel for more property and financial insights and strategy
- If you’re feeling super generous, write us a comment and share the article with your friends to help them become motivated and inspired
In the meantime, if you enjoy reading about people’s property success stories check out the following articles:
- Property secrets of a 26 year old millionaire school dropout – Ryan Windsor
- 23 jobs to becoming a property millionaire by age 23 – Stephanie Brennan
- Alex Williams: Introduction to acrows in building work
- Alex Williams: How to use your noggins in building work
Finally, if you are starting on your own financial freedom journey, you will find the following articles from our library helpful in spring-boarding you into a new chapter of your life’s dream.
- Trick yourself into becoming a money magnet
- The hidden costs of wealth creation
- Seven techniques to save more
- Five person growth areas you must spend money on
- How to raise £250,000 in 7 days