Residential Asset Management for Corporate Investors
May 24, 2010
Young Group asset manages around 350 residential properties for our clients. Most of these are owned by private individuals.
Over the last year or so there has been an increased interest from institutions to invest in residential property – mostly in London / South East. We have been involved in this, including being invited to join a working group run on behalf of the HCA (Homes and Communities Agency). There have been some announcements from the likes of Aviva and AEGON but little new money has entered the field.
However, there are established corporate investors in this field, such as the Grosvenor Estate and Grainger who have invested over the years. We are currently in discussions with these types of investors regarding the asset management side.
They tend to use the likes of Touchstone and ARIM for property management
and a variety of agents for the tenant finding side.
We take a holistic view to asset management in residential property – you need to focus on both property management and income. Many large scale landlords take a commercial property focus to residential property and focus on property management and ignore the income side.
Please do not get me wrong, property management is very important, and with the right focus can increase the level of renewals and reduce voids – a happy tenant is a long term tenant.
Good property management can also save the landlord money, knowing a property well means reduced call outs etc. However, without being close to the market, a new tenancy that should be £5 or £10 a week higher and can move into the property a week earlier can have a significant effect on overall income / yields.
Many regard the secret to residential property investment as buying well, this is important, but so is generating good ongoing income, something that has become even more important in this post crunch era.
The above views come from many years of experience in this field. Sylvana and I have our own portfolio that Young Group manages, along with our clients investments, we give them all the same care and attention.
This is something I am pleased to say large scale investors are realising and why we are having more productive discussions in this area.
Watch this space.