A remote investment case study from property investor David Croissant
by Julie Whitmore, YPN writer and property investor.
How do you go about identifying the right investment area when starting out in property, particularly when this may not be local to you? In an article in the August 2021 issue, property investor David Croissant shares how he and his business partner Alan Scott built a portfolio in an area which was remote to them, and how they went about the identification and management of the properties and the systemisation of their Northampton student lets business.
Not wanting to just work until he was old, David explains how he met his business partner through a training course. They then went on to identify their remote investment area by undertaking thorough research and analysis. Implementing effective and efficient systems and processes has enabled them to manage their portfolio of student lets remotely.
Using Local Housing Allowance (LHA) rates as a benchmark
David shares the analytic approach that he used to identify the most suitable investment areas, by taking the local area LHA rates as a benchmark and comparing these against numerous factors:
- House prices
- Area growth potential and unified development plans
- Transport links and the impact of logistics of travel
- Area rental prices
Undertaking a review of all these factors, he and Alan decided on the area of Northampton and originally were looking at a ‘rent-to-buy’ strategy.
Understand your exit options on your investments!
Unfortunately, a lack of demand for rent-to-buy tenants forced them to change direction. Instead, they went into student lets because of where they were in terms of the annual calendar – the time was approaching when students were starting to seek out accommodation for the next year.
Being able to quickly pivot to a different strategy demonstrates the importance of understanding exit options for your investments.
Systems and processes for management
When managing properties remotely, David outlines why having the right systems in place for the regular Health and Safety checks, in addition to dealing with maintenance requirements, underpins the management of their business.
David’s key shares for managing remote properties
- Streamline communications
- Give the tenant tools that are frictionless to report issues
- Utilise tools that are freely available for your business
- Ensure suppliers are paid promptly
David also shares why it’s important to understand your costs and the key performance indicators (KPI’s) for your business and why “Cash and capital are the things that keep you going and growing”.
In addition, he explains why they have now diversified their investment strategy from student lets. Given what has happened recently during lockdown and how badly certain types of lettings were affected, I’m sure that as investors, this is something that is close to all our hearts, making this article a MUST read.
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