by Katia Montresor
Thanks to new technologies, the real estate market is becoming more competitive every day. The way we do most of the business is on an international scale, the experiences of users are becoming increasingly compelling and the classic figure of man with a tie is now a memory. The news related to the real estate in the technology sector are numerous and very interesting. Some can even be called revolutionary. Let's discover the most influential ones.
AR and VR, virtual but real!
According to a recent estimate by Goldman Sachs, AR and VR are expected to become a $95 billion market by 2025. Augmented reality (AR) is a reality that goes beyond our five senses and that is "augmented" and improved through the use of artificial and virtual information. A first example of this technology was provided by Google in 2013 – the famous Google Glass device, a small display to be placed above the eye that shows information on the surrounding visual field. Since then the entire mobile sector began applying this technology in smartphones, laptops, tablets and glasses that are combined with special software or applications.
In the real estate sector, applications of AR are innumerable. For example, an apartment can now be completely reproduced, allowing the client to view the interior and exterior spaces of it. With the help of a touch screen, a webcam and a marker you can see an entire housing complex in 3D, both from the outside and from every corner of its rooms. There are applications for smartphones that provide geolocations of the properties in the zone where you are walking at a given moment.
Virtual reality (VR) transforms 3D models of buildings into an interactive and engaging experience. Showing a house simply with photos is now démodé. Today you can visit a property without moving from home, managing mobile images the way you wish. Just by wearing a pair of 3D glasses you can "enter" a house and view it as if it was a real visit.
“Hi, I'm your Chatbot, can I help you?
According to Business Insider, 63% of people from a survey consider talking with a robot online an interesting option, although 79% say that in case of problems, a person should take over the conversation. Therefore a chatbot does not replace human relationship, which is the key element of the real estate sector. The real strength of the chatbot lies in its ability to be autonomous and always present, active 24 hours a day, offering users help and answers, and at the same time record interests, preferences, ages and tastes of the users.
"There's a new business in the “block"
According to a recent study by Deloitte (August 2017), blockchain-based contracts “could revolutionize the future of real estate”. In particular, the blockchain technology can “advance leasing, as well as purchase and sale transactions”. The forecasts for 2018 are very optimistic. As the report explains, there will be some major impacts of the blockchain technology on the real estate business:
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The design from the sky: drone
Visual marketing carried out by drones will be among the cheapest and the most impactful strategies of the coming years. A drone is a small plane with a very advanced technology that requires to be piloted by an expert dronist. Drones are able to offer a 360° immersive experience. In particular:
A professional drone can cost from 1,000 to 2,000 dollars. A really small investment compared to the business that it can create. Drones already took place in a luxury real estate sector in the USA, Canada and Europe. There are even real estate agencies who specialize only in videos made by drones.
Who knows what Guttenberg would say...
The Economist announced that “3D printing and clever computers could revolutionize construction” (June 2017). Perhaps they referred to one of the first modular houses built in only eight hours by the Ukrainian engineer Max Gerbut. Eight hours, thanks to the 3D printer technology, to make a mobile and self-sufficient house! How did they create it? The design team drew a 3D printer sketch at the factories in Ukraine and California. A robot then used 3D printing technology to “print” a building layer by layer: the floor, the 20 cm walls and the roof, all made of carbon fibre, polyurethane, resins, fibers of basalt and glass.
To create a 3D house you can also use other materials, such as soil, water, straw, wood, steel, metal and stone, materials previously unimaginable in traditional manufacturing.
A versatile home, which can become a guest house, a house to "take" with you on vacation, or a sort of "agile hotel" to rent, not to mention various applications in times of emergency, such as earthquakes, wars, floods, or even scientific and research villages
“Where” is important
of your PC. It is also possible to "study" the favourite area from the point of view of services, commercial activities and places of interest (museums, theaters, etc).
Ever time geolocation functions become more complete thanks to the use of Location Intelligence (LI). Through the application of Location Intelligence, companies can now get a clear picture of areas that have a record of the most sales or that are more likely to accept certain marketing offers. LI creates a new way to visualize, analyze and track potential and effective partnerships, sales and customers. In conclusion, LI organizes the data in a specific environment where it can manage it for strategic marketing purposes.
by Rajeev Lehar / co-founder KL Property Partners
Possibilities and threats of blockchain technology and cryptocurrency in real estate and property investing
For the last few years there has been a huge amount of focus on the blockchain technology and cryptocurrencies such as bitcoin and ethereum. Our company has been observing the developments in the multi-billion dollar industry to figure out what possibilities and threats it has to offer in property investments in particular.
The DNA of the blockchain technology is fascinating and at the same time daunting. Cryptocurrencies like bitcoin and ethereum have definitely been in the driver’s seat on the blockchain market and have already created a footprint. The Deloitte report here gives a great overview of what we are talking about when it comes to commercial real estate:
But let me briefly explain the possibilities our company sees in the real estate and property investment industries that can be enhanced by utilizing the blockchain technology, if applied correctly.
Consider the following:
2. Less risk of document forgery. Proof of ownership, proof of exchange, proof of transaction and proof of existence is where this technology is showing its strength. Previously, there have been many cases of forgery related to property documentation such as ownership, title splits and even evaluations, which can now be prevented to a certain extent. Traceability is most likely to be higher as all the property information remains unchanged during transactions throughout the entire lifecycle. This will also give a much better and more reliable database of historical transactions and will preserve the history of every deal.
3. Smart contracts ensure the transparency in transactions. Having direct peer-to-peer transactions done by blockchain technology assures security for all the counterparts. This can help deals become safer and more secure.
4. Reduction in transaction cost. Due to enhanced time efficiency and reduced costs on middlemen, we expect more flexibility in margins until the markets are coordinated properly. This might have a huge impact on the slow old-school property investment markets, and less impact in countries that already utilise digital technology.
With every possibility there is a challenge to overcome:
1. The transition of transferring information cannot be avoided and requires government's approval. Since this technology is based on decentralisation, it is seen as a threat and as a huge workload. It might take a while for some markets and countries to adapt.
2. Legislation regulations for cross-border transactions need to be in place. The International Monetary Fund (IMF) along with other financial organizations have called for global coordination on potential bitcoin regulation. Today, the rules vary greatly from country to country and individual regulatory agencies are not making it any clearer. At the moment, this brings additional risks to international investment projects.
3. Might reduce flexibility of different investment strategies, such as different ownership structures, business structures and tax efficient setups for portfolio investments. As we have not seen these type of complex deals before, it is hard to predict the outcome.
We will continue to observe closely the development of blockchain technologies in property investments. Striving to achieve the balance of being innovative and providing our clients with safe investment opportunities we might enter this vibrant market very soon.
KL Property Partners
“You are so lucky to have found an excellent HMO power team! How do you turn a property around in 4 weeks?!”
Is a question we hear a lot, whilst speaking with other property Investors
by Nina Peutherer / Founder of Inspired Equity and Operational Partner of KL Property Partners
There is no luck involved. We have followed a strategy which we have implemented at Inspired Equity, in finding the perfect investment area, interviewing and testing a now trusted HMO agent and power team.
Would you like me to share with you some of the steps we follow, so that you can also have a successful portfolio of HMO’s, with an agent and power team that you have the confidence in leaving to do all the hard work for you, in a very quick time frame?
My name is Nina Peutherer. I am the co-founder of Inspired Equity Ltd, a Property acquisition and Investment company, based in London. We have a multi-million pound property portfolio, of which a large percentage of them are successful, high yielding HMO’s in the home counties around London. We have built up a successful portfolio of HMO’s, from being extremely well educated and being continuously curious, to ensure we are the authority on outstanding HMO’s in our carefully chosen investment area. One of our core values is to provide the highest standard of living and our properties are regarded as the best available on the market.
Here are the steps that Inspired Equity follow:
Walk the Streets
think this is silly, as you are only on the outside, however if there is excess rubbish outside, with either not enough bins or over flowing bins, a tatty garden or curtains hanging off their rails, you can gauge a lot from the type of letting agent who is managing the property.
Call the Agents
After researching the letting agent on line, I then call the agent with the most boards up on properties and explain that I am looking to invest in the area and buy a number of properties to let as HMO’s and that I am looking for a HMO specific agent… This is very important as many agents try to say they do HMO’s as well, however you need to find an agent which specialises in HMO properties.
Do you charge a finder’s fee?
This is very important as the turnover of tenants in a HMO is higher than in a single BTL property. Even if the property is to the highest standard, the turnover can be higher, due to the typical demographic of tenant who rents a room, who in our case are young professionals, with a desirability to live within a short commute to London and surrounding Industrial towns, who tend to want more of a disposable income and social Integration.
We are finding more and more frequently, that agents are now offering 3 month tenancies, rather than the traditional 6 month AST’s, which it is why it is important to try and find an agent that do not charge a finder’s fee, or if they do, ensure it is a low finder’s fee, as potentially paying a finder’s fee 4 times a year can really take a nasty chunk out of your cash flow.
What is their average void rate?
Are the agents paid a commission on how quickly they turn around empty rooms/alternatively do they have key performance Indicators which are targeted around reducing room voids and increasing the number of clients looking for rooms.
What type of Checks do they perform on potential tenants?
Do they get a previous landlord reference, as well as an employer reference? If no previous rental history, do they contact a personal guarantor/ personal reference check, from a reputable person, that they can briefly research.
How do they advertise?
The best way to test this, is to go on to www.spareroom.co.uk and look for their adverts. We gauge again, the standard of property that they manage, how they dress the rooms to attract tenants, as well as the quality of the pictures they take and their competence in drawing in potential clients by the quality of their advert. Spare room is also a great way of assessing the agents, if you do not live locally or don’t have time initially to walk the streets.
I always want the agent to have a waiting list of clients, who are looking for rooms to let, so that it minimises voids. If the agent advertises and has a good presence, both on line and locally, they will be perceived to potential tenants, as a quality managing agent.
We want all tenants to feel safe and cared for, by someone who is able to arrive on site quickly to access the issue and get the quickest possible resolution, as an unhappy tenant is the last thing we want, as we do not want to jeopardise the harmony in a house, by 1 unhappy tenant complaining to another tenant.
Do you have any landlords on your books that we could speak to as a reference for your services?
We don’t necessarily take them up on the offer, however if they offer this information, it proves that they have confidence that their other clients will give them a good reference.
Face to face Meeting
Once we have gathered the answers to these questions and feel confident that the agent could be an experienced HMO agent, we then organise a face to face meeting and ask the agent to take us to a couple of their properties.
This is really important for the following reasons:
Ask to see other room rent examples, so that you can see in the flesh the room rates they are achieving.
We also ask them if they have a check list of items that are needed for a property to be up to HMO standard, this shows that they are organised and that they know what is involved in converting a property to a HMO and that they are aware of the legislations and standards required. This list also acts as a check list of items that are needed to be purchased, once they have the keys and demonstrates that they are organised and experienced.
Ask what their procedure is for purchasing items needed for their client’s properties, for example do they buy anything needed and agreed with us and then bill us and provide receipts for the purchases? This proves that they are financially stable and that we are not constantly having to make payments upfront for items/works needed. We also like to set expectations in saying that anything over a value of £50 has to be agreed by Inspired Equity, before the purchase is made, this stops them coming to us for everything, however allows us to keep on top of spend.
Once we have seen a property we are serious about purchasing, we engage with the agent to see if one of their build team/handy men can come along with us on a viewing. This is great, as it proves to the agent you are serious and want to engage with them further.
On the viewing, we ask the tradesman’s opinion on the room sizes/what can be done with the property, to gauge their experience in the legislations and what is involved with converting the property to exceed HMO standards.
If you are further away from your investment area, you can ask them to visit the property on your behalf and video call you, so it is as if you were there, or if they are not able to do this, then they can visit and then call you to go through their findings. We have previously found that they have come up with ideas that we hadn’t necessarily thought, which have saved us money and floor space, which has really added value.
Going forward with the agent
Once we feel confident in the agents experience in HMO letting, client base, Marketing of properties, power team and local area knowledge, we agree to work with them and agree a plan for onboarding a property. We schedule a second viewing of the property, where we get the work men needed for the conversion to attend the property with us, so that they can quote for the works needed. They make a record of the materials needed at this point, so that as soon as we have a completion date, the parts are ordered in for works to start as soon as we have the keys.
Once the works commences, we engage with the work men and agent on a minimum of a weekly basis, to get a progress update, so that we can plan deliveries of white goods/furniture/final touches and accessories, so that as soon as the work is complete, the property can be dressed, marketed and viewings booked immediately. We then ensure that the agent has already started mentioning an exciting new property that they are bringing to the market, to their existing database of clients.
All of our properties have brand new, modern furniture, flat screen TV’s, ensuite bathrooms and feel homely and welcoming with well-dressed rooms, which stand out from the other rooms on the market.
Because of this, the record time we have experienced for fully tenanting a 6 bed HMO was 7 Hours, with single tenancies. Our agent had back to back viewings planned all day and because of the exceptional standard of our properties, they are rented out instantly and often exceed local market rents.
After a lot of research, we have specifically chosen the type of property that we go for, which are modern town houses, with 4 beds and 2 reception rooms, as these types of properties are easily re configurable. Our average turnaround from getting the keys, to the property being fully tenanted is 4 weeks, which includes adding in ensuite bathrooms.
Turning properties around, to such a high standard, in such a short time frame of just 4 weeks, means that we dramatically improve the standard of living in our carefully chosen investment areas and maximise profits for our investment partners, so that we can move on to the next exciting project.
We are passionate about creating beautiful homes for our clients, whilst creating long term sustainable wealth for our investment partners. If you would like to find out more on how you can work with us, please contact us at: Beinspired@inspiredequity.com
KL Property Partners
If you have found this useful and would like to learn more, please contact us at:
by Deva Jeganathan / Founder of The Property Direct and Operational Partner of KL Property Partners
We have sourced and purchased over £30 million worth of properties in the UK. 70% of the deals were made through estate agents and local auction agents. That is why it is extremely important to build a long-term relationship with them. It requires plenty of time, but once the relationship is established, they quite literally do all the work for you.
To build long-term relationships with estate agents, consider these points:
1. Visibility is credibility:
Being on the estate agent’s mind is crucial. Connect and build a relationship with your estate agent by meeting them face to face every time you pass by or are near their office. Keep them in the loop by calling at least once in two weeks. It is also helpful to be in constant communication through e-mails.
2. Be open and honest:
Let the agent know your intentions clearly. Tell them your views about their deals honestly and never take a deal on board if you think you probably won’t be able to deal with it. Decide whether the deal is going to be bought through cash purchase or mortgage, and stick to that decision. Changing the method of purchase during the process will upset the estate agent and will also damage the buyer’s reputation.
3. Keep up your promises:
Always stick to the completion time. Try to conduct a survey within two weeks after the offer has been accepted. Any obligations agreed between the vendor and the buyer should always be kept, as this will increase the buyer’s credibility with the estate agent.
4. Never bypass:
Try to maintain integrity throughout the process. It is not a good idea to use the deal, sourced by your estate agent, and complete it with the vendor directly, bypassing the estate agent. This will damage your relationship and will demonstrate lack of integrity.
5. Viewing with agents:
When you view a property with a new estate agent for the first time, besides making decision about the property itself, it is also very important to establish a good relationship with the new agent. Creating a good rapport immediately makes a good first impression. And everybody knows that the first impression is always the best one.
7. Add value:
Why not pay a bigger commission if the estate agent deserves it. If you agreed to pay your estate agent a certain percentage for closing the deal, but they also did an amazing job during the purchase and negotiation process, pay them a bit (or a lot, that’s up to you) more as an appreciation for going that extra mile. This will motivate the agent to work for you even better next time.
8. Thanks-giving and celebration:
Celebrate with your estate agent after the completion of the deal. You can also send them cards, small gifts or invite them for an evening drink for Christmas, Easter or any special occasion. After all, they have contributed to your success.
The Property Direct
KL Property Partners
by Dr. John Varzgar / Operational Partner at KL Property Partners
Article review: House Prices UK in 2018
A key driver to the “steady but subdued” 2018 UK forecast by RICS and Halifax remains a lack of housing stock from less pre-existing homes being offered onto the market and a lack of new builds.
Yet an additional source of housing stock into the market may arrive from landlords due to their challenging environment from tax relief changes and increased regulation. This is echoed by the National Landlords Association (NLA) who state 20% of landlords are planning to reduce the number of properties owned in 2018.
Although this potential extra stock could be swallowed up by First Time Buyers taking advantage of the low mortgage rates and Help To Buy schemes, it also provides an opportunity for creative property investors. Having a motivated seller opens up more possibilities to structure a deal that solves the selling needs of the landlord whilst minimising the risk, instead of simply present a traditional Below Market Value offer.
Dr. John Varzgar
KL Property Partners
By Michelle Bryant / Strategic Partner at KL Property Partners
Article review: First bitcoin homes sell in the UK
Unless you have been hiding under a rock or living on another planet you will be well aware of the phenomenon that is "Blockchain."
The digital ledger known as "Blockchain" in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly, enable transactions to be lightning fast at very low cost. It is now possible to buy and sell UK property with bitcoin enabling exchange and completion to occur at the same time.
I love change and am all for new sophisticated, slick systems especially in the world of finance and property. However, I cannot yet fully understand how we commence recording such transactions on a balance sheet and integrating them into a property portfolio?
It is actually happening right now and it is being predicted that this will be common place in the very near future.
But, back to the basics:
Bitcoin is volatile. Accountants are conservative creatures.
According to the media there are many UK sellers out there who are keen to accept bitcoin but really do they understand what they are potentially exposing themselves to?
I will be very interested to see how such transactions in the property industry further evolve and in what volume. I will be watching very closely to see how such transactions are treated for accounting purposes, how they are handled by all the necessary parties and how they will or won't be regulated.
This could be epic. Watch this space...
KL Property Partners
How we create a legacy as Property Investors and Developers
by Matthew Bell / Founder Grid Edge Estates
When we are doing business, whether it is in the property industry, investments, technology or any other industry, what is our objective? What is our impact? Obviously we are in business to make money, you may say “we closed a great deal today, it makes X amount of profit!”. This is great. But the question I pose today is. Who cares?
To truly answer this, we need to start at the very beginning.
For the first time in history we have an opportunity to leave the world in a better state than when we entered it. We have the technology and resources that are evolving and growing daily, from Virtual Reality and Renewable energy to the Blockchain. We see in the news every day, we are on the precipice of real change once more where we can make huge leaps as a race. Industries, some of which have stood for hundreds of years are set to be disrupted and it will be, very much in the Darwinian sense - survival of the fittest. To win out, I believe it is purely down to creating a movement of like-minded driven individuals coming together in partnership to achieve amazing things, for benefit of all.
What do we stand for?
How intelligent is our decision making? On a small scale, questions such as, ‘how did we travel to that meeting today? Diesel car or electric? What did we eat for lunch, McDonalds on the go or something healthy prepared the night before?’ These are examples of how we can have an impact on ourselves as individuals and the environment and depending on the answer it can start to build a picture of the effectiveness of a person and the decisions they are likely to make in any given circumstance in business, not just in life. Dare we take that vision a step further…
On a larger scale, if we multiply the bad behaviours by billions of people in the world we have a pretty grim future painted for all of us. Multiply the good behaviours, however and we have the exact opposite – a seismic shift of opportunity and improvement. I believe our true impact as investors in the current climate is how we improve society and the environment - not just the economy. The familiar narrative I see most regularly from entrepreneurs in the public eye is what they have achieved for themselves, how well their business is doing etc. That’s great to hear, we all like good news and should celebrate it when it comes. However, what I feel society is missing in the capitalist space is, what are we achieving for someone / something else other than ourselves. Entrepreneurs who focus on this message stand out. Think about the most influential people /investors on the planet right now – Mark Zuckerberg, Bill Gates, Warren Buffet. Look at what they do with their money and time and there is a common thread of philanthropy.
I’m not necessarily talking about charity here, more how we structure our business to achieve as good, if not better, return on investment through sheer resourcefulness and by default leaving a positive impression on society, the environment and the economy. This is called Impact Investing – it’s about to go mainstream and we are 100% behind this movement.
Where do we begin?
So how do we even start to contemplate our place in this movement? The people who invest wisely in themselves first, to manage their mindset to constantly deliver daily on the smallest things - who dedicate themselves to a higher purpose beyond their own needs are the people we remember and live on forever, creating a true legacy to inspire generations. Names such as Princess Diana, Mahatma Ghandi, Martin Luther King, Steve Jobs and the living Richard Branson are all legends - Why? Because they all possess(ed) clear, certain and simple values and disciplines.
I believe there is a 6 step process to achieving maximum Impact and they are simple steps that everyone can apply:
1. Faith / Belief / Vision / Mission / WHY
Sure, it wasn’t as simple as this but he started with what he believed in and built steps from there to the final result. To achieve this though, one must start with the end in mind and work backwards. This is known as the Mission, your WHY. It must run through your every being and consume you.
Every day it is important to work on your mindset consistently. I have had the pleasure of learning from world-class coaches and entrepreneurs and I have noticed they all work at this constantly in order to remain in peak performance. They are also all early risers. Before doing any work, they are out of bed early and make time for physical exercise, meditation or mindfulness. This could even be as simple as walking the dog or listening to a podcast. It is so important to make time to be grateful for what you have and who you have in your life - this way you can start the day positively and take that momentum forward to deal with challenges with more ease.
This is closely related to mindset, but is the next step and again is so simple but so important. It is imperative that you optimise your environment to achieve the best results. Whatever works for you, just ensure that you do not get caught up in work before you make the decision on where is best to work that day or you could become sluggish or irritated with distractions. Some work better in the office, some in the pub, others the library. Choose one, or all of them for different occasions but ensure it is a conscious decision. This means so much psychologically, as YOU have made the decision therefore you are in charge of the day, the day is not in charge of you.
It is then time to start researching and learning. To be of real value and to make maximum impact it is important to become an expert in your field. Continually learn everything there is to know about the field you are in.
Whilst learning it is important to put this newly acquired knowledge in to practice initially with small steps, regardless of how small they may be. The biggest lesson I learned before setting up a business was to ‘build the plane while it’s on the runway’ i.e. execute whilst learning, don’t wait until you are ready, because you will never be fully ready – there will always be more to learn. It is understandable that fear of the unknown may hold one back, but lack of knowledge should not – this can be acquired with time.
The key to partnerships is not only that you have something that the other wants or needs, you must share common values and principles so that when times get tough or there is a dispute, then the mission you share takes precedent and you can come to an understanding over the course of action. I am so passionate about this as I have had the benefit (and I believe unfair advantage) of being an identical twin. I experienced from a young age the benefits of a partnership – my brother and I developed skills such as sharing, teamwork and delegation much earlier than our peers…. if they ever picked up these skills at all.
Get all these ducks in a row and we have a recipe for creating true Impact to leave the world we entered a far better place than where we started. What a challenge, and we couldn’t be more up for it!
The question is, do we want to take the easy route, have minimal impact and be forgotten, or do we want to take the more difficult path and leave a lasting legacy to inspire generations? If we remember this when making any critical day-to-day decision on investments (or otherwise) it will keep us on track and true to our mission. It may take longer and be more difficult but the result will be so worth it.
As Impact Investors, our Mission at Grid Edge Estates is to revolutionise construction industry investments by optimising build quality and prioritising sustainability to build developments and refurbish homes with the future in mind, today. We make ethical investments by providing much needed new housing whilst using renewable energy sources wherever possible and always aim to make a positive socio-economic impact in doing so.
We aim for this to be our lasting legacy and to pass on the knowledge of impact Investing to others in order for the vision to be carried forward to future generations. The key to this is simple - we set out to do more for others than we expect for ourselves, the fact that we are the best at what we do and that we are highly profitable is a bare minimum.
It is an honour to be a partner of KL Property Partners and we’re looking forward to building this legacy together.
Founder Grid Edge Estates
KL Property Partners
 The Stand, Investec, June 2017 - https://thestand.investec.co.uk/answered-insight-true-impact-impact-investment
If you are interested to learn more about Impact Investing and Green finance follow the links below for further Information:
“Assessing the green finance boom: prospects for a market led sustainable future”
Events coming soon to London:
Impact Investing World Forum 21st – 22nd March
Low Carbon Cities
The Future of sustainable finance at the G7
Looking at new construction and redevelopment projects for real estate and property investments, we see a huge potential for profits. Taking advantage of other cost effective industries one can find a lot of elements that can be leveraged. If we look, for example, at the car industry and the Lean methodology, and apply it to a construction or redevelopment process of an investment project, we can determine the pitfalls for the specific project. The key is to see the bigger picture, plan smart, follow up, do "backtracking" (probably where majority of the companies fail) and evaluate.
The bigger picture:
Take a bird’s eye view of any project, determine the reoccurring moments and activities and analyse their order through the way to the final product. We all know time is money. Less execution time implies less finance cost, quicker sales or faster rental revenue. Above 60% of all projects share common milestones and can be quantified by measuring priority, cost, resource allocation and project timeline. These numbers will help you to calculate the project cost per day and see the cost of a delay or a bonus per a saved day.
Project planning and follow-up are essential for better performance of any development or reconstruction investment. Defining scope of work and Work Breakdown Structure, known as WBS, gives you the details you need to know for the most time/cost effective execution. You can utilise several tools to build your project specific WBS based on templates. Gantt charts are widely used in project planning and management. Break every task down into the time, cost, resource and predecessor, meaning that the specific task can not be started before the previous one is done. For example, walls are depending on the foundation and roof comes after the main structure. Right calculations will result in a critical path - a chain of activities directly related to the deadline for the project.
During project execution it is important to update the project plan accordingly so that man hours, cost and time are calibrated to avoid major discrepancies. A lot of projects are only updated after project is finalised, which may cause important details being left out. Another important part is planning 3rd party activities, such as financing, planning, legal, architect, cranes, interior design etc. Contact point should be defined in the WBS so execution is done most effectively.
This is where the real improvements and profits are generated for future projects. Evaluating the entire project execution process will allow your next investment project to get more Lean and you can start cutting waste along the project. Manufacturing companies normally rearrange their processes to become even more effective. Doing several tasks simultaneously or cutting down on critical path activities will most likely result in less cost and duration of the project.
Utilising these simple yet profitable tools and strategies has been proven to give profits and also avoid losses when used properly. The car industry as well as several other high-tech industries has been optimising design, manufacturing & assembly for years, so why not leverage their investments into your own industry and business?
We hope this article will help you get more out of your property projects and inspire you for an innovative approach to real estate investments.
It is about time to support the councils to build more homes (The Guardian). There is a noticeable need for housing in the UK and any effort should be welcomed. However, according to our experience from other countries we operate in, there are some points that need to be brought up in the Britain’s real estate discussion apart from producing more homes.
1. Demand or cost. An important question when it comes to the price growth in UK is whether it is demand or low running cost that made the price increase over the last seven years. The interest rate reduction from 4-5% in 2000-2010 to just above 0 has reduced the cost of mortgages significantly. As a result, the mortgage cost during the last 7 years has been at low levels which is the core in price increases.
2. Technological progress. There are many methods of construction around the globe today that are technologically advanced and cost efficient, but still not utilized in the UK due to not being classified as standard construction. Wood, steel framing and many other methods could be implemented to reduce the cost of construction and therefore the price of the house. Our question is why is this discussion so limited in the UK today if the housing challenges are so clear?
3. Market inefficiency. Unfortunately, the market policy in UK is not effective and there are a lot of limitations increasing the transaction cost and time of transaction, including time for approval. The interest in the market from international capital is limited due to lower efficiency, particularly outside of London. The market has, however, seen some improvement within the permitted development during the last years and these changes are very favorable for increase in the construction.
We agree with the view that UK market needs to increase construction activities and we would welcome any change to simplify processes and offer more options. At the same time, the cost of living is not above the historical level, while the cost of purchase has increased due to higher prices. Therefore, as the best way to stabilize the market we see more activities around the affordable living and not the activities towards price reduction.
It is a clear sign that people tend to search for housing opportunities outside expensive areas, and this is when the price/income ratio comes to the fore. We at KL Property Partners see it as a critical measurement in investment analysis nowadays and have it as important part of our research.
KL Property Partners
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