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Single-lets might not be the sexiest option for would be property investors, but ex-military man Chris Browne found that they were a safe and risk-averse bet for investments. He spoke to us about how he has made a single-lets strategy fit his goals, why he isn’t afraid of using sourcers and what’s in store for his Horizon property brand in the coming 12 months.
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Getting into property
Chris Browne’s first single-let was somewhat of an accident. In 2010, he bought a property whilst still in the military. Having until then not owned his own home, he was excited about the prospect of finally laying his hands on one. He completed on the purchase and immediately rented the property out. ‘I was captivated by the whole idea of investing in an asset that could give you a recurrent income on a monthly basis and would appreciate in value historically,’ Chris says.
After leaving the military around four years ago, Chris immediately began studying for a masters in Building Surveying with the intention of becoming in his own words, a ‘better property professional.’ However, approaching his 30th birthday, he resolved that he in fact wanted to focus on his own projects. ‘Once you’ve had that taste of freedom, it’s very difficult to wish to give that up,’ Chris says. ‘Especially if the long term [goal] is to work for yourself and carve out your own destiny.’
Why single-lets?
Still being in the military when he first got involved in property, Chris wanted his portfolio to be as hands-off as possible. He admits there are limitations with single-lets, such as their lack of cash flow, but appreciates their long-term stability, potential capital appreciation and lower turnover of tenants. ‘You can sell a single-let because it’s a family house, regardless of whether the economy is doing particularly badly,’ Chris says.
He describes his preferred single-let property as ‘a three bed, semi-detached house.’ He adds: ‘In a good area, not a prime central location of a city. But in an area that has a park nearby, that has a bus nearby, has an off-street garden that can be secured for kids, near to a good school.’ Where possible Chris extends the property, allowing him to obtain top rents from day one.
In addition to these suburban family homes, Chris also owns a number of city centre apartments. ‘They have a higher tenancy turnover [and] have a higher wear and tear, but do look better on a spreadsheet,’ Chris says.
Using sourcers, but doing your due diligence
Unlike many who avoid sourcers out of concerns over their credibility, Chris regularly employs the services of sourcers to find property. ‘I still find it a murky world,’ he admits. However, he says that today it’s easy to do due diligence on the deals they bring you, making using sourcers less risky.
‘I would definitely say no matter how good your relationship is make sure you have some idea of how to do calculations to make sure you feel that investment is going to do what you want it to do,’ he says. ‘I’m happy to pay a sourcing fee, as long as I’d add that sourcing fee to the purchase price.’
Typical breakdown of costs
Purchase price £100,000
Renovation £35,000-£40,000
Revaluation £170,000-£180,000
“There has got to be margin in there, otherwise there’s no point doing it. Otherwise it’s sweat equity.”
Building the Horizon brand
On the back of his single-let success, Chris has set up a block management company, a construction company and a lettings agency. The construction company was born out of a desire to professionalise that side of his business. Meanwhile the lettings agency came about after he stumbled upon a business partner who shared an interest in setting one up.
At present, Chris’s priority is systemising these businesses. As well as developing and using a so called company ‘bible,’ Chris is also experimenting with different approaches to systems and processes. ‘We used to use word documents that would grow legs and become as huge as our processes,’ he says. ‘We now use videos. There’s Camtasia I think and Screencast. It’s a much quicker way of doing stuff.’
Looking to the future
2019 will see Chris make progress with his current commercial to residential project, which involves turning a former doctor’s surgery and house into two separate houses. Otherwise, he is hoping to keep busy with the project management side of his work, which he says gives him in equal measures the most stress and satisfaction.
‘The more you do, the better relationships you build with contractors,’ he says. ‘The better they understand what you do. The better you can work with suppliers.’
And, what about the prospects for property in 2019?
‘I still don’t see another asset class better than UK residential property to invest in,’ Chris says. ‘I still don’t see an end of the private rental centre.’
That’s not to say he doesn’t think there may be storms yet to weather, but sometimes sticking with what you’re sure of is the best option he says. ‘Sometimes when I say adapt, [I mean] just being firm in your convictions.’ He adds: ‘Just learning and reading more and investing in time, in your own knowledge is probably the best way.’
More information
@horizon_living – keep up-to-date with all things brick ‘n’ mortar on Horizon Living’s Instagram.
horizonliving.co.uk – find out more about Chris’s property brands.