Looking for a house through a magnifying glass - isolated over white

Beware of Irresponsible Property Sourcing Companies

Over the last five to ten years the property investment world has been filled with dream-selling hype, delusions of grandeur, get rich quick schemes and irresponsible ‘fake it until you make it’ guru’s all trying to lure you in to a false sense of security to extract your hard-earned cash, no matter how little of it you have to invest.

One of the biggest problems with this hype is that it has paved the way for the rise of the property sourcing industry. This may not have been a bad thing but when you couple the above with the low barrier to entry to this industry, we have a potential recipe for disaster.

I have seen the effects of this first-hand hundreds of times in recent years and have spent hundreds of hours frantically trying to help investors limit the damage of this.

I am at a point now where I feel it is time to expose these sharks.

You could say what I am about to discuss is the straw that broke the camels back.

For over 5 years now, I have been educating my clients on the ethics of sourcing companies. However I want to get something clear right from the start.

There are some fantastic sourcing companies around who really know what they are doing, they are very professional and often offer some form of accountability to their clients with controlled refurbs and even management thereafter.

It’s not these companies I have an issue with, I want to talk about the other lot.

Firstly, What is Property Sourcing?

In a nutshell, this is buying a lead to a property deal that otherwise you would not have known about. Generally or rather historically, these are direct to vendor properties that have a price agreed between the vendor and the ‘trusted’ property sourcing company.

However, more often than not, these days, they are simply properties that are on the open market for sale with an agent, live on Rightmove for anyone to view.

The caveat being “there is a good argument to say that you were most likely never going to come across this property, so there is value in that, I suppose”.

So how does property sourcing work?

Simply put, you register with a sourcing company that sends you a deal or property, usually by email as and when they find come ‘source’ it.

They will charge you a ‘finders’ or ‘sourcing’ fee and then pass the property lead over to you for completion.

Generally, this fee (for standard single let properties) is C.£3000 but can rise significantly for larger refurbs, flips or commercial to residential properties. It’s not unheard of to pay upwards of 20-30k for a large development.

As you will see below, the deal is presented with some basic information regarding purchase, refurbishment and sourcing costs. It will highlight any potential increase in value and the achievable rent.

So what’s my issue with property sourcing companies?

I have absolutely no issue with sourcing companies in the same way that I have no issue with builders, roofers or plumbers. What I have an issue with is the rogue traders of the property world, much in the same way I do with the rogue builders, roofers and plumbers.

Unfortunately, since there is so much awareness these days through the hyped-up BS on Facebook and YouTube, there is a mass of irresponsible sourcing companies out there who are using you as a ‘cash-cow’ to build there own property portfolio or to ‘cash in’ on your emotional attachment to money.

Much like anything else connected to making money, there are responsible and irresponsible ethics involved.

The barrier to entry for a property sourcer can be as low as watching a YouTube video, designing a spreadsheet and loading up Rightmove.

Herein lies the problem. Property investing is more on the ART spectrum than it is on the SCIENCE spectrum.

These people have no experience in or desire to finding suitable properties. They don’t know what makes a suitable property a good investment, but the scariest thing is that they have no idea what makes a bad investment.

If we could assess a property’s suitability via mathematics alone, then this thing we call property investing would be as easy as 123 and the multi-million-pound training industry attached to it would crumble overnight.

The STRAW that BROKE the camels back

A few weeks back, a previous mentee reached out to say that he had been offered a property in my local town here in Darlington and would I mind casting my eye over it. He mentioned that something didn’t add up and since he had spent a year under our wing he knew his hunch was probably right.

“Of course, Samuel, no problem, send it over, and I’ll gladly offer my opinion.”

Regrettably, this took up several hours of my time, not what I was expecting, but I had to get to the bottom of this deal. Furthermore it’s now taken several more hours, but the silver lining is that I get to educate people that bit more and hopefully help some of you avoid these companies

It’s worth mentioning that I have no intentions of exposing the sourcing companies name; that’s not my style.

However, everything that follows in this BLOG is 100% accurate.


Please see below;

X XXXXX Street, XXX XXXXX Darlington

  • 2 bed terrace BRR
  • Purchase: £50,000
  • Revaluation estimate: £90,000
  • Gross rent: £525
  • Net cash flow: £199
  • Refurb estimate: £21888 (including VAT and 10% contingency) 
  • Money left in: £11,914
  • ROCE: 20.04% 

Square metre: 60

Refurb: The property needs a full refurb, including full rewire, boiler and new central heating system. The refurb will entail a new kitchen and bathroom, full house plaster and painting.

Please always do your own due diligence.

Below are the Properties in the Sourcing Companies Comparable List:

#93 £97k DL***J (74m2)

#94 £90k DL***J (71m2)

#101 £106k DL***J (80m2)

#157 £90k DL***H (80m2)

#85 86k DL***J (60m2)

What you should note from the images and subtext above:

  1. Take note of the frontage of the property Road > Path > GARDEN/YARD > Door
  2. Take note of the LARGE bay windows
  3. Take note of the ‘CURB appeal.’
  4. Take note of the POSTCODES DL**HJ & DL**HH
  5. Take note that #85 is an END TERRACE
  6. Take note of the FLOOR AREAS in M2
  7. Take note of the NUMBER of COMPARABLES (5)

Below is the Property that was Offered/Sourced.

I am sure you will see immediately that the property is NOT comparable with the ones above in the comparable list.

It is simply Road > Path > Door

You’ll note there is no large bay window on the front of the property, the curb appeal is significantly inferior and the observant of you may also note that the property is only 60m2

What I haven’t mentioned is that this property is a complete different postcode to the comparables too (DL***Z)

I suppose now the logical question is WHY did the sourcing company decide to highlight comps from the other end of the road a huge road with hundreds of houses on separated by a main through road?

Well…… Here is the answer

Below are the Last Five Comparables for DL***Z

#79 XXXXX Street – Nov 2020 – £58,500

#25 XXXXX Street – Apr 2018 – £43,000

#9 XXXXX Street – Dec 2017 £49,000

#73 XXXXX Street – Oct 2017 £60,000

#29 XXXXX Street – Sep 2017 £51,000

The Average Price of the LAST Five SOLD Properties is £52,300.

Ok, yes, currently we are in a buoyant market, and some of these comps date back to 2017.

Arguably though, being a local investor, having a large amount of knowledge and owning #9 in the sold list above, I would say that the market is in a similar position now in 2021 as it was back then in 2017. However, I digress because this is still not the point I would like to highlight.

The sourcing company have decided to ignore the comparables in the same postcode since it did not support their argument of a revaluation of C.90k.

But, what is far worse for me is that since they used alternative postcodes, why didn’t they include all of the comparables in these postcodes?

Well, once again, we have the answer, courtesy of nethouseprices.com

#36 XXXXX Street – DL***A – Nov 2020 – £68,000

#80 XXXXX Street – DL***A – Mar 2020 – £59,000

#78 XXXXX Street – DL***A – Jun 2020 – £43,000

#74 XXXXX Street – DL***A – Apr 2019 – £63,000

#72 XXXXX Street – DL***A – Mar 2019 – £65,000

The Average Price of the LAST Five Properties is £59,600.

Things you should note with the above ‘unincluded comparable list

  1. These ALL have the large bay windows
  2. They are ALL are between 65 & 69m2 closer to the 60m2 that was sourced but STILL all larger
  3. All were in rentable condition and #78 was in immaculate condition when sold

Our Comparable #9 in the Same Street

We refinanced our property at #9 last year. We had the property valuation come back at £69k. This property had just undergone a FULL refurb.

Our valuation on this is now 75k MAX

I think this paragraph extract from the sourcing email sums something pretty obvious up

Refurb estimate

Note: This is an estimate based on a 15-minute viewing. An accurate quote must be undertaken on completion once measured and opened up.

No gas/ electrical tests or structural surveys have been completed; there is a risk that further defects may be found at a later stage resulting in additional cost. 

You’re about to risk either 40k via the mortgage route or £77.5k if you lay down the cash to buy, and given that this is a BRR deal, the latter is more of a possibility.

In Summary

Someone is going to get a big surprise in six-months time when they call for a revaluation and the sourcing company mitigate this by inputting a small bit of text informing you to ‘Always do your own due-diligence’ they may hide behind the current market or the comparables but they know that they are not true comparables.

In actual fact though you’re not likely to approach them again and they know that. What’s more is that there are enough people trying to buy BRR that they will make hundreds of thousands of pounds before they are exposed, if in fact they ever are.

Sourcing companies can be an excellent way to build your property portfolio.

This blog is not entitled ‘Beware of Sourcing Companies’. It’s Beware of Irresponsible Sourcing Companies’

The critical thing for me here is the unethical way that this company have sourced this property. They have purposely chosen to ignore the fundamental information highlighting that the deal is by no means what they say it is.

AS ALWAYS do your own due diligence and get proper training and support if this is something that you struggle with. We’re not talking about buying a pair of shoes here. This is tens of thousands of pounds.

What’s the cost of training by comparison?

Gears and Mentoring Mechanism

10 Reasons Why You Need a Property Mentor in 2021

For me, starting my own company back in 2003 was a tremendously scary time. I was only 23, very inexperienced in almost every aspect of business.

I had little confidence in developing the right skills needed to run a company, and I did not know how to obtain these essential skills.

I knew I wanted to work for myself.,  I was very good at my JOB. However, that’s where my business plan started and finished, unfortunately.

I knew without question that if I was to succeed with my vision, I needed to enlist help. I contacted the Prince’s Trust, who had helped me with a grant application, and they put me in touch with a business mentor.

This was, up until 2016/2017, the best decision I ever made in my business life. It also happened to be one of the first decisions I ever made. Talk about peaking early!

I can say without hesitation that the help and support received in those early days was instrumental to my success. I learned things from my mentor that proved to be pivotal to my development as a businessman. In fact, I still implement many of his teachings today.

Personally, a mentor was someone who helped me overcome my initial fear, helped with my education and crucially awareness, which gave me the confidence to take the appropriate action to drive my business forward.  

Today, this is principally what I use to run my mentorships. I know from experience that fear, lack of confidence and confusion is the biggest inhibitor to taking action.

Before we get to our top 10 reasons of WHY, we need to answer a couple of questions…

Firstly, What?

What is a Mentor? A mentor can be paid or unpaid. A mentor is someone you should want to emulate. They are someone ahead of you but are usually on the same journey you. They are someone who not only has the knowledge to help you but have the proven experience too. They should be able to educate you, motivate you, raise your confidence, open doors for you, observe and offer perspective. They can help you obtain clarity by answering questions honestly and ethically. Often you’d struggle to get a straight answer elsewhere.  

So, Where?

One of the trickiest things about mentoring is that it’s often an informal approach, at least initially. This can make it challenging to find an entry point and determine how best a mentor fits into your life situation.

It not a question of ‘if’ a mentor will fit into your life and help you but more so ‘where’ they fit into your life. Consider much of the value and experience a mentor can give you ripples into all aspects of your life. I’ve helped many mentees throughout my career. Encouraging them to go after goals they never thought were achievable to them. Today, they are successful individuals.

All it took from my side was a little bit of guidance, push, faith, and to foresee the potential they had. Regardless of their geographical location, stage of development and experience.

Think about what you’ll learn from this? What behaviours, skills and influences will you pay forward and use with others. Peers, family, friends, even your kids will benefit. A mentor can teach you the little tricks of life that put you on the fast lane to success.

Finding an outstanding mentor is not a mere stroke of luck; it should be a part of your life strategy. And the relationships you build in your life. If you want to be more successful in life, it’s time that you get yourself a real mentor.


How does a mentor work? A mentorship works much like an agreement. To be effective, there should be no hierarchy but rather a firm understanding that they are there to help you as you progress. A mentor should be adaptable to the mentees requirements and, as such, be flexible throughout the relationship, altering their approach as the mentees needs grow or change accordingly.

The level of formality will depend on your desires and should be established early on in the relationship. A mentor should educate you continually, but it’s essential to understand that they are there to show you the path. It is up to you to walk down it. They are not employees but rather a guiding hand. 


Why should I not just go it alone? Ok, this one is easy to answer. Being a property Investor these days is no longer about simply buying a property and renting it out. It’s far more complex than that. The rules have changed so much in the last ten years that, although it still can be a passively run business long term, it is still fundamentally a business and, as such, needs a great deal of respect and effort if it’s to be successful.

Simply put, if it’s done right, it can create excellent passive income and freedom from both financial and time constraints. However, done wrong can create a very time consuming and stressful JOB. As far as we are aware, no one gets into property as a job; they get into it for freedom.

If we could get a JOB, take an apprenticeship or complete a degree in property investing, then we may be half-way there without a mentor. However, let me ask you this? Would you start any other business without the skills, education and experience needed to succeed in your chosen field?

Many businesses require little to no money to get off the ground, but with the exception of a couple of strategies, property investing requires tens of thousands of pounds of your own money. So ask yourself, how will you establish the required skills, education and experience needed to be successful without this guidance?

Well, here’s ten reasons why we think YOU NEED A PROPERTY MENTOR       

1. Education

Remember, your education does not have an expiration date. This is something that will stay with you and can be applied for many years to come.

Increasing your education has countless advantages, but perhaps the most significant advantage of all is that it will open your mind to understanding an entire industry, rather than a small part of it. Remember, most of what you don’t know at the minute will remain unknown for many years to come, and once you learn what it is you don’t currently know, you’ll wish you knew it long before you did.

Make sense?

2. Accountability

A good mentor applies accountability as they help you to grow and develop. It’s what every mentor learns immediately; it’s mentoring 101. In fact, some mentorship programmes are sold on this trait alone.

But what most people don’t understand is that accountability is a two-way thing and, as such, has a compound effect. They keep you accountable by questioning, encouraging and challenging. You create accountability by asking questions and ensuring that your mentor offers what it is they said they would. This, in turn, creates a self-perpetuating cycle of accountability.

However, there is a third, and some would argue a fourth wheel.

Not only do you keep each other accountable, but you create your own accountability since you are now financially obligated to yourself to make the most of your investment. Not only that, but you may then have a conscience-based obligation to make the most of your investment for your partners or families sake. Whatever the reason is, it’s a plus since accountability is now driven at you from all angles.

This is a win, win scenario for anyone involved.  

3. Confidence

A lack of confidence is one of the biggest inhibitors to action. Action is pivotal to momentum, and momentum creates growth. A lack of confidence is a serious issue in any business and especially dangerous in property investing. It’s like expecting a tree to grow without planting the seed.

It all comes back to confidence, and Increasing your confidence in your ability through your education and your understanding of an action-based mindset is vital to your success. Without confidence, you are destined to stay where you are, afraid and falling way short of your potential.

A mentor offers confidence on a multi-level platform. They build your confidence by, as in point one, increasing your education which builds confidence as a by-product. They build confidence because you know that you are no longer alone. You no longer have no one to turn to when you face a new challenge.

When we go it alone, accountability for our actions stops with us. When we have support from a mentor, we can share this load. This, on its own, is worth your investment. However, we’re also now, because of this, more confident with our decision making, enabling us to truly move forward with our dreams and visions.

4. Clarity 

Who else can you ask that tricky question? Who has no other agenda except that of your success?

Because mentors play a neutral role in your life, they can give unbiased opinions on important life-changing questions. If you were to ask your friends, family, the internet, an unpaid coach or a so-called expert on social media the same question, they would all give different answers based on how emotionally involved they were, how they could benefit financially, socially or even just offer some form of confirmation bias.

A mentor has one single aim, and that is to help you unconditionally achieve your vision. There is no hidden agenda, no muddy water and no emotional response. They will give you the most direct answer offering clarity to the question at hand. This brings us nicely to point

5. Efficiency

Most people think of success as a steady line on a graph, a gentle incline up an X-axis until we reach our vision. That is not exactly accurate. The reality is that it’s more like a polygraph with a mass of peaks and troughs with some strategically placed obstacles to through you off course from time to time. This means our journey ends up being far longer than we anticipated.

Now lets then throw in our learning curve, the time taken to develop our education, build our systems and create our tools and resources essential for success. Remember, though, these are all based on our current knowledge, so there is a good chance that they may just possibly suffice for now but will almost certainly need developing further at a later date.

Now let’s imagine this is all set up for us, waiting to go, and what’s more, we’re going to get trained on this all too. The question here is, which one will make your journey more efficient? This, of course, provides a more direct route, saving time, allowing you to focus on development and helping with decision making too.

What’s more, carrying out the proper due diligence is more likely because you now have the correct tools and resources to do so. You know where to look, how to look and what to look for. Again this is multi-layered since doing things correctly from the start is more efficient because time will be saved from chasing your tail and correcting avoidable mistakes.

Fundamentally, being efficient saves your money in the long term.

6. Experience

Your mentor has the experience you crave so much. They say knowledge is power, but in the property world, experience is power. Knowledge emphasises theory, whereas experience emphasises practice.

Your mentor is more than an open book for you to gain knowledge from. They will have experienced all the same challenges, fears, thoughts, and desires you have and will face in the future. They not only have the experience in investing, but they have the experience on how to deal with the emotional side of the business, how to mitigate those and crucially, how to turn them into strengths.

Your mentor has a wealth of experience across a broad spectrum. You will find that your mentor will help you in more aspects of your life that they are employed to.     

7. Protection

How we all love to listen to the hype, the dream-selling, the get rich quick schemes that sound so good, too good to be true. We all know deep down that anything worth having means hard work, but still, we all want to believe. This is because we are hard-wired to believe what we want to believe. We actively seek out what we believe in, a thing called confirmation bias.

This is how the likes of googles, facebooks, amazons & YouTubes algorithm works. It gives you exactly what you seek, even if you don’t know you’re seeking it. A mentor will keep you grounded, they will stop you from making rash emotional decisions, from jumping on the bandwagon and making the kind of mistakes that will rock the very foundations of your property business.

If this wasn’t enough, they can protect you from the sharks that naturally circle anyone who has any kind of disposable capital. They will protect you from bad deals and investments and can even protect you from rogue tenants. Need we say more?

8. Direction

If we don’t know where we are going, how do we expect to get there? Direction is the answer. Direction helps us create goals and objectives, which allows us to create a coherent strategy. One of the primary roles of a good mentor is to establish direction.

They do this by mapping out the route to achieve your vision, working back, assessing your current position, Identifying your strengths, weaknesses and opportunities to mitigate any threats. Only once this is established can direction can be created. Once you have direction, you increase your chance of success exponentially.   

9. Perspective

Let’s face it, none of us are perfect, right?

We may all want to believe we are, we know we can clearly see failings in others, we’re very good at that, but can we see our own?

Having a mentor offers a new perspective on our learning, our methods, and even our belief systems. We are all somewhat restricted with our beliefs because our perspective is limited. Once we are presented with an alternative perspective based on experience, confidence, and knowledge from someone whose opinion we value, we may be able to alter our own beliefs.

Once the boundaries of our belief system are widened, the possibilities are endless. Having a different perspective presented to us or by adopting a new one as a by-product of someone else’s helps us see things a little clearer.

Couple that with our mentor’s observations, evaluations and constructive criticisms, which are all there to help us improve our thought process, and we can expand on our existing beliefs.

10. Creates a hedge against procrastination

What if I was to tell you that procrastination can be ok?  Would this shock you?

We know this goes against all the self-help articles you’ve read, the gurus ideologies of progression and destroys a measurable chunk of a multi-billion-pound industry. However, before you stop what you’re doing and head to your phone to watch endless videos on TikTok, please note there is a caveat.

Procrastination CAN be ok once you have identified that it is an issue. We all procrastinate in one form or another on a scale from a short term ‘I’ll do it later’, delay to a ‘once I have X, I will start’ longer-term delay.

However, we need to understand that there are two forms of procrastination. The first is contained procrastination. This is the kind of procrastination we have when we know we have a job to do with a deadline. The second type is long term procrastination. It’s this long-term procrastination with no time boundary or deadline that can often be the source of our unhappiness.

This is the procrastination that will prevent us from living our life the way we want too, from chasing our dreams and achieving our goals. This is the procrastination type that having a mentor mitigates since it turns long term procrastination into contained procrastination. It’s then the job of a good and experienced mentor to limit the damage of the contained procrastination.

In Summary

How long have you been thinking of becoming a property investor? How long have you thought about starting to build the kind of life you want? One that enables you to live on your own terms and not those that are handed to you by sources beyond your control?

If any of the highlighted points above are preventing you from achieving your vision of a successful life, then ask yourself this question, would this be money well spent? Would I benefit from a mentor?         

So we have answered the what, the where, the how and exhausted why. So, the next logical step is the WHEN!

Well, the best time to plant a tree was 20 years ago. The second best time is NOW!

We will not get anywhere of our thoughts, ideas, dreams or fantasies. Only acting on them allows us to achieve what it is we want. 


To watch a short, fun video on procrastination theory from author and Tedx speaker, Tim Urban, click the link https://www.youtube.com/watch?v=arj7oStGLkU

Blog Post Image Template

Congratulations your account has been CREDITED with £86,400

Suppose every day your bank kindly deposited £86,400 into your account, just after the stroke of midnight.

However, there are some stipulations to this lavish gesture;

  1. Everything you don’t spend that day will be wiped clean just before midnight, and the balance will return to £86,400 the following morning.
  2. You may only spend the money; no transferring it to high-interest savings account or drawing out cash.
  3. Lastly, the bank withholds the right to withdraw the gesture any time it sees fit.    

Pause for a brief moment to think about this scenario.

Ask yourself some reflecting questions…

  1. What would you do with the money knowing the rules?
  2. Would you buy everything you could for yourself, your family and friends because you know it is getting replaced tomorrow?
  3. At what point, knowing this could stop any day would you start to invest the money in your future and your education?
  4. Would you try to spend every last penny since the balance is to be wiped at the end of the day?
  5. Would you rise the very minute after the stroke of midnight and begin the colossal task of spending, knowing it’s a tall order to get this spent in 24-hours (of course, you would).

Who can honestly say that they would not use every opportunity to use every single last penny of the £86,400 that has been generously gifted to you that day?

Well, this 86,400 is a gift we are all blessed with each day we are lucky enough to wake.

The gift isn’t money. However, IT’S TIME.

Each morning just after the stroke of midnight, we are ALL blessed with 86,400 seconds to achieve exactly what it is we want on that day. As we head off to bed this time is not credited, but rather the time we have not used is lost forever, and each day it all begins again, but just like the bank withholding their right, this can be taken away at any time.

When you look at your life and assess what you can achieve in a given day, imagine what you can achieve in a month, a year, ten years. But time is continually counting down. Scientific studies show, time and time again that the longer we leave something, the further it slips away from us.

Time is a gift.

86400 ticks of the clock each day, how many of them matter to you? What will you do with your 86,400s today? 

Let us know in the comments below how your spending your time today.


Understanding The Numbers

In order to understand the commercial viability of a property investment, it is important to understand not just the numbers but the nuances of what those numbers represent.  There are plenty of deals out there that look fantastic on the surface but delving a little deeper exposes frailty.

Your property investments should be treated as a business, so even though you may seek the advice of experts, you need to carry out your due diligence with the same rigour as if you were about to present the deal to the Dragons Den.

There are lots of different figures bandied about, so I am going to concentrate on just four key numbers; namely below market value (BMV), cashflow, yield and return on investment (ROI).  For each one, you need to understand how it is calculated, what it represents and why that is important.

Market value.

To be able to calculate how much below market value a property is being sold for you first need to calculate the market value; that should be self-explanatory, it is the value of the property right?  OK, so is that what the vendor or agent is telling you? Is it based on 2-year-old comparables adjusted for market inflation or the figure that bloke Dave gave you when you met in the street whilst assessing the condition of the roof?  An economist will tell you that the value of something is what a buyer is willing to pay for it, but that isn’t particularly helpful either.

So, if you are new to an area the best way to value a property is by using all the figures you can gather (except for Dave’s) and applying some emotionally detached and objective common sense.  The big but here is that you need to, as far as possible compare like with like so factor in the condition of the property as far as possible.  Do not compare the price of a run-down repossession with that of a well-maintained family home two doors down.

The BMV is calculated by simply working out the discount over the market value, so a house sold for £90,000 that could be sold for £100,000 on the open market is 10% BMV.  Why would anyone sell BMV? That is for another time but suffice to say the vendor is more motivated by the speed and certainty of the sale than the sale price.

Why is BMV important?  Well firstly it gives you instant equity in the property, so you are now a proper investor. Maybe more importantly, it reduces your risk.  So, for instance, if there is a change in circumstances with the house, personally, financially, in legislation or any other factor, you have an exit strategy even if prices have dropped slightly.  If you are managing risk, you are now properly in business.

BMV concerns the capital and equity of the purchase, the other three indicators all concern the ongoing financial viability of the investment.  If you are buying to let, then we would always advise planning to hold the property for at least a few years because otherwise, the transaction costs will eat up a considerable proportion of your profit.


Cashflow is easy in explanation but requires careful attention to the detail for the calculation.  It is the estimated monthly income less expenditure.  Income will be rent (although not necessarily exclusively); the main items of expenditure are mortgage fees, agency fees, allowances for voids, allowances for maintenance (including accruals for large expense items such as boilers and roofs), service charges, ground rents etc.  These expenditure items can be difficult to estimate so be detached and as objective as possible.

Cashflow should always be positive, and you need to set a minimum level that you will accept to act as a buffer; I have heard various figures used from £50 to £250 per property.  If it is positive, then you are in business, if not then do not buy a liability.


Yield is the annual return of the property expressed as a percentage of its value.  The nuances here depend on what you include or exclude.  You can decide what you include when you know what you want to use it for.

Most investor folk use it to compare the headline returns of properties.  At WOPT towers we also find it useful as an at a glance review of the risk when using finance.  As a rule of thumb, the worst case scenario is that finance will cost about 6% and other costs (maintenance etc.) are around 2%; then the minimum acceptable yield for an investment will be 8%.

Return on investment.

ROI is a similar calculation to yield, but it strips away figures to reveal how hard the investor’s money is working.  It is calculated by dividing the net cash flow in a year by the investors capital; that is the equity in the property.

ROI is the actual return on your money similar to the interest rate at the bank and therefore allows the investor to compare investments across not only different properties but also different investment asset classes, e.g. shares gilts and bonds etc.  This is important as it allows the investor to check that they are making their money sweat as hard as they can.

Final Thought

Before we finish, it is worth mentioning that the figures are the sum of several estimates. So, to be really thorough you should calculate a best, worst and most likely scenario, only then will you have a true grip on the business case.

Time to deploy the spreadsheet!!


Deposit Protection

First, I need to write that this article is not meant to act as legal advice in any way, shape or form.

We don’t think the law around the holding of deposits is particularly complicated, but we are certainly not qualified to give it advice.

The law/rules/guidance around what you can and cannot withhold from a deposit is, well, almost entirely subjective and frankly a can of worms (here is the advice the tenants are getting – link below).  

So, the purpose of this blog is a discussion of the nature of deposits and highlight what you should be aware of and possibly do more research into you can do that >>here<<.


Should I even bother to take a deposit?

Yes, you absolutely should…….. DEFINITELY!!

OK, so it almost goes without saying that a tenant can cause far more damage than will ever be recovered through the withholding of a deposit.

In many ways, the monetary value is secondary to the commitment to the property and superior financial management that the tenant is displaying in getting the deposit together.

Frequently the first question you’ll get asked by the tenant when they submit their Notice to Quit, is ‘when will I get my bond back?’.

It is quite clearly in their mind, and if that thought holds during the tenancy and they take that little bit of extra care with your property, then you are onto a winner.

The tiny bit of extra daily care that a tenant may take with your property will add up and, although I will never be able to prove this, I believe you will have fewer issues with tenants if you take a deposit.  And if that is too woolly and ethereal for you – well you have the cold hard cash from the deposit to cover any repair costs.

How much should I take?

Amount taken tends to be relative to the rent the equivalent of somewhere between 1 to 2 months.

However, there are a number of reasons why you would want to take a bit more; if the tenant wants to have pets, if the tenants are foreign and a greater potential to skip payments at the end of a tenancy are but two examples.

There is no right or wrong (although as at December 2018 the Labour Party are pushing to have an upper limit on the deposit – so watch out)

So that’s easy, I’ll take a deposit.  Now, what shall I do with the money?

Simple – register it with or submit it to a government-backed scheme.

Tenancy deposit protection was introduced on 6 April 2007 as part of the Housing Act 2004 and updated in the tenancy deposit provisions (section 184) of the Localism Act which came into effect on 6 April 2012.

Much of the justification for the acts was the sharp practices by some landlords predominantly betterment.  Betterment (made up word alert?) is the practice of spotting a small defect and then using it to justify making the property better at the tenant’s expense, for instance, a small mark on a wall could be used as a reason to re-decorate a whole room or house.

The deposit schemes are meant to bring greater parity between tenants and landlords about what the deposit monies can be used for.

Has it worked? We have no idea, but it certainly has changed the relationship and also created a new opportunity for the no win no fee lawyer if the deposit is not correctly registered and the correct paperwork served; You have 30 days from receipt of the money so act quick.

What is this ‘Deposit paperwork’?

The details of what paperwork needs to be served will be available on the scheme’s website, we haven’t listed the requirement here for fear of going out of date and thereby being misleading.

Broadly, it is a document that tells the tenant about which scheme you have used (the prescribed information) and T&Cs/leaflets that give greater depth of detail about the scheme.

To register or go custodial?

The schemes offer two options; in the custodial scheme the deposit is paid the money into a third party account managed by the scheme and registering the deposit involves the payment of a fee to register the deposit which is then held by the landlord/agent.

Which scheme is better?  Only you will be able to decide as it is very much linked to how you manage your affairs and the types of tenancies you have.  Bear in mind that you can use different schemes for different deposits if you so wish.

At the time of going to print the following providers were available, these are the only government schemes available, easily found on google.

  • Deposit Protection Service (DPS)
  • Dispute service (TDS)
  • mydeposits

Were all done then?

Yes and no.  It is also important to ensure that you complete a detailed condition report (inventory) of the property.

This should be a combination of at least a written report and photos; taking videos is also commonplace.

The inventory should be completed with the tenant prior to the point they move any of their belongings and must be signed off by the tenant as a true and accurate (It also is good practice to get them to witness the testing of fire and carbon monoxide detection equipment and take the meter readings at the same time, but we have now strayed to a different subject matter!)

The inventory will then form the basis of any future claims against the deposit if the tenant disputes any monies that you intend to withhold.

If you are not feeling confident, then you can use an inventory service.

You are not tied to this service forever, and it could be quite useful to get them to draw up the inventory in the first instance anyway!

Last words.

Play it by the book.

Ducks in a Row rendered

Systemising Your Property Business

As soon as you start your property business you should be concerned with making it as efficient as possible. The best way to do this is to systemise your approach. We have laid out an overview of how to achieve this which we hope will give you a clearer idea of the what, where, how and why?

Are you crazy? I don’t have a business, I just have a couple of rentals?

Even if you currently only have one property and don’t intend to go any further; you should still treat it like a business otherwise it will turn into an unwelcome hobby. Nobody knows what the future holds neither of us thought we would be sat here 12 years on writing blogs, delivering training courses, running property management companies and reaping the rewards of a passive income through property investing.

The aims of systemising are to make the management of your business quicker, easier and more consistent.  You should do this even if you do in-fact only have one property…… currently!!.


So how do I start?

Following a meeting at WOPT towers, we produced the diagram below to show my headline processes.  Each of these processes can then be broken down into a series of activities, we use a checklist to track what should be done next and keep an overview on progress.

Each process will have associated documents; be it letter/email templates, notices, reports etc.  The first one you write, copy or ‘benchmark’ will become the template which you should store somewhere safe and obvious in order that you can use it next time; at which point you will no doubt improve it and so on.

Sounds straight forward.  Can I have a look at your checklist?

Of course, he is a sample from the end of tenancy process – to see what other checklists are available, click here


     Related Documents

1.      Informed of tenant’s intention to quit. 
2.      Collect the signed Notice to Quit receipt from the tenant.    Notice to Quit form
3.      Deliver a rent statement and check-out letter to the tenants.

    Check out letter

    Rent statement

4.      Initiate the Letting Checklist for the property. 
5.      Agree date of the check out meeting with the tenant. 
6.      Print up to date rent statement. 
7.      Collect the check-in inventory and the property keys. 
8.      Conduct the end of tenancy meeting    End of tenancy report.

This all sounds very stone age – is there an app for that?

We recommend never using tablets or stone to document your system because other than the obvious weight issue any system should constantly be reviewed and improved.

There are numerous property management applications, and it is becoming more common that they are scalable, so you don’t need to pay a hefty monthly payment whatever the size of your portfolio.

We won’t recommend a particular package as selection depends on what your criteria is both now and how you see your business developing in the future.  Needless to say, there are numerous articles on property forums and websites that recommend applications based on the author’s view of the world.  Just make sure you are GDPR compliant!!!

One of the experts at WOPT Towers uses Excel for just about EVERYTHING, (pretty sure he creates his shopping lists on it), and it works well for him so as ever there is no right and wrong… Other than NOT systemising.

Sounds really simple, anything else?

Well no, not really, it is that simple when you break it down but it is remarkably effective in achieving the aims of making business quicker, easier and more consistent.

Property Training at WOPT

Here at WOPT we only offer responsible and ethical property training.

We believe firmly in transparency and will never sell you the dreams of yesteryear and never try to guide you to the impossible. We believe firmly that success is a journey and NOT a destination and that setting impossible targets can be counterproductive.

We believe in honest, straight-talking guidance, that’s why our training courses have become the best around because we genuinely care about your success.

We are so confident in our unique and personal approach that we even offer a no quibble money back guarantee.

All our articles are for information purposes only, and we ALWAYS advise you to use them as part of the overall picture building process and not as your sole reference point


GDPR – What’s All The Fuss?

So, what is GDPR?

The analytical department of WOPT has deduced with great scientific and complete conjectural accuracy that 97.42% of all emails currently received are from companies that you purchased a candle from 12-years ago asking you to stay in touch with them.

This is because In the past when you looked online at something like a lightbulb all relevant and often irrelevant companies were informed through data sharing. The outcome was random emails or pop-ups from ‘Lightbulbs ‘R’ Us’, ‘We buy any old lightbulb.com’ and the life and times of Thomas Eddison. 

Great news for us, GDPR is designed to stop this

GDPR stands for ‘General Data Protection Regulations’, and in a nutshell, it’s the new European wide rules that will ultimately govern what information or data an organisation or individual can hold on other people and how they can ultimately use such information. It prevents companies or individuals from sharing and selling your personal data and browsing preferences.

What does it change for us?

Not much really for our community (landlords and property managers).

You will need to be a little bit more thorough and robust with your data handling, have a think through where and how you store others’ data and what you do with it.

If you are just using the information to run your property empire, then there shouldn’t be any change.  There are five reasons (shown here on our free ‘privacy statement’ template) why you can hold and process data, and they apply to you broadly as follows.

You will receive ‘consent’ to hold and process data on your application forms.

If the applicant is successful, you have a ‘legitimate interest’ to hold and process data about them and their tenancy.

That’s great, but what do I need to do?

Well, like we have just mentioned, you’ll need a privacy policy so it’s not a bad idea to work through our free template here and as you write yours it will show what is needed. 

To make it simple, think about the information you hold and what you do with it.  The RLA has produced an excellent article if you want to get right into the detail.  CLICK HERE

Although you should already be registered, it is important that, if not you now register with the ICO

How does it affect the information I hold?

You will need to be clear about exactly what you are holding, how you are protecting it and how long you keep it for.

The first bit, what you are holding, is fairly straightforward but you may get asked by a client or tenant about what you hold on them.  You have a time limit on getting back to them with this info. Currently this is 30 days.

You then need to make sure you are holding it in GDPR compliant repositories. 

We use cloud data storage, property management software and a referencing company.  All have declared GDPR compliance.

There are also time limits as to how long you hold the data for so have a plan to have a good clear out every now and again.

So thats it! That’s what all the fuss is about?

Well yes and no, our article only covers how the changes will affect us as landlords or property managers, it is far more complicated for larger organisations, but that’s none of our concern here.

We suggest, like we always do at WOPT, to do your due diligence and if you are in any doubt seek further advice. The rules are new and whizzy so no doubt the ‘no-win no-fee’ brigades are looking for an angle.

Be thorough with your business administration – see our article about systemising your business for more ideas. 

Just one final piece of mitigation before we leave you

If you decide to pass on your tenants info to a far eastern prince, who emailed you out of the blue, because he needs this information to get a large ‘tax-free’ cash sum out of his country and into your bank account then we can only wish you the very best of luck, not even the careful guidance of WOPT can save you here!!