Spotlight on Robin Pilley, HMO investor – Part four of a four part story

Spotlight on Robin Pilley, HMO investor – Part four of a four part story

10:58 AM, 30th March 2011, About 13 years ago 2

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Robin Pilley invests into HMO’s (Houses in multiple occupation) in the Haverhill area and regularly achieves up to 16% yields, he is also a Director of CXG Property Services, which is a Letting Agents and Property Sourcing Company.  As these yields are so good we’ve asked Robin to share his story in a four part series.  This is the fourth article in that series.

In my first article I explained how my brother and I got into property.  In my second article I explained how we grew the business but how our model was challenged by the self styled “experts”, “mentors”, “gurus” and we faced the question of whether to change our model. In my third article I explained how we developed a niche market in managing HMO’s for Eastern European tenants.

So how would we adjust our business if all these people returned home?

Well thinking like investors means that you must always be reading the market to find new ways to maintain high yielding properties.

An example of such an opportunity is that we are also the only Letting Agency in our area that offers properties to LHA (Local Housing Association) tenants.  We ensure that the rent is ring-fenced so that we do not have a problem with arrears.  We assist and advise prospective tenants to complete their paperwork and have established a good working relationship with our local council.  There is a desperate need for such social housing and again the yields can be very attractive.

We are still the only Letting Agency in our area that offers HMO properties which are extremely high yielding but do require a lot of management.  As a result of our experience over the past 5 years, we believe that we have also become experts in this field.

We have effective license agreements and also a reciprocal agreement with the police which means we can email them details of any prospective tenant and literally within a couple of hours they advise if we should be wary.  This is a powerful tool in our armoury and avoids a lot of the problems that other agencies and landlords have experienced when offering HMO properties.  It is something we are proud to have negotiated at a local level and the police have been very pleased with the fact our lettings company can co-operate so successfully with them.

We now have a very active database of investors which we have built up by attending networking events, having stands at property shows, personal recommendations and by positive press coverage. The CXG name and reputation have grown in equal measure over the past 5 years, which has meant that we now have more investors than we can source properties for and more tenants than we have houses for.

We won the Property Sourcing Award at the Landlord and Letting Awards 2010 and came 2nd in the “Best of” awards in the whole of the UK based on testimonials.

At CXG we enjoy what we do and have a passion for property.  We like to share our knowledge and experience with existing and prospective landlords.  CXG can help investors make informed investment decisions and avoid some of the pitfalls and mistakes that are made when getting started.  Successful property investment is not as easy as some ‘marketers’ suggest, but once solid foundations are laid your aspirations and dreams can be realised.

I hope you have all enjoyed reading our story, it is a work in progress and I hope there are many more chapters to come and the next 5 years will prove to be just as exciting as the last 5 years.

  1. Part One
  2. Part Two
  3. Part Three
  4. You are herePart Four

CXG is a member of the following organisations:

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17:55 PM, 8th December 2012, About 12 years ago

Hi Robin

Very interesting reading of your journey to building a successful letting agency, specialising in HMO's. Congratulations on your awards.

However, I was alarmed to read that you choose to let to LHA tenants. I don't know if you've had your fingers burnt yet, as you don't say, but I think it's just a question of time before you do. Tenants not passing on the rent is just one of many problems, but I'm not sure what you mean about 'ring fencing' rents. Are you immune to the council clawing back over payments, or the rent being reduced for various reasons, for example.

You also state you use a licence agreement. We used to use a licence until we discovered that they're not appropriate and wouldn't stand up in court in the event of a dispute/gaining possession/claiming unpaid rent,etc A licence is for holiday lets or when the landlord lives in the same property. An Assured Shorthold Tenancy is the way to go, made for whatever period (usually short) you like. Although legally, the tenant has the right to a tenancy for 6 months, In practice, most of our tenants want to stay for a minimum of 6 months anyway so it's not a problem. Then as an AST is used, the deposit must be protected.

Then I read about your good relationship with the police and you giving them details of any prospective tenant for them to respond about their suitability. Surely this is covered by Data Protection. You are effectively telling the police where an individual will reside, without their permission. And the police are passing information to you which will affect your decision whether to offer a tenancy or not, again, without their permission.

I hope you take these comments as being constructive, intended to nudge you to think about best practice and where you will inevitably be tripped up at some point in the future. I would be happy to chat if you want to email me.

I am looking forward to reading Part 5 onwards.

All the best, Pete

Colin McNulty

17:29 PM, 1st September 2013, About 11 years ago

It's a shame Robin never replied to Pete's comments.  I thought similar things, particularly about the data protection act issue.

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