How Rick Gannon went from career break to £7m HMO portfolio

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Rick Gannon became an accidental landlord when his first property was in negative equity and decided to rent it out.

Fast-forward a few years and he and wife Lorraine had made a substantial amount on the sale so decided to use the proceeds to buy other properties to rent – with a few ‘flips’ and renovations on the side.

After working in the police force for a few years, one night he got home from a night-shift when his son Ben, who was born with quadriplegic cerebral palsy, was nine.

“He asked me why he couldn’t play football with his friends at school,” Rick tells LandlordZONE. “I realised I was always at work and wasn’t around to help him, so decided to take a career break.”

Rick started a disabled football club for Ben and other youngsters, fundraising to pay for their specially adapted wheelchairs. “It changed their lives and Ben could say that he could play football too.”

Matched income

Twelve months later, Rick had matched his former income by focusing particularly on HMOs and decided to go into property full-time.

“The only experience I’d had of HMOs was arresting prostitutes and drug dealers in them,” he laughs. “I decided to go for professional tenants instead.”

Nine years later and the couple have a £7 million portfolio with 140 tenants. Although he still buys property, Rick says he has no big acquisition plans and is concentrating on creating wealth for his children. He may be less hands-on these days, with 10 staff to run his portfolio, but Rick has kept busy, becoming a published author, tech start-up and training company founder.

“When we got to 50 tenants, I started to look for systems to onboard tenants and do property management – then decided to go into business with developers in Bulgaria and set up my own management platform for landlords, gotenant.co.uk.”

Novel approach

Rick has penned three books including House Arrest, a semi-autobiography and 45 Ways to Buy Property. He also runs a training company which teaches students how to run an HMO portfolio.

With 16 HMOs – “five-star, all with Netflix” as well as 27 single lets, a pub, serviced holiday let and 14 garages, mainly around Worcester – Rick believes that it’s his positive relationship with tenants that’s resulted in very low churn across his portfolio.

“I’ve always wanted to help people, creating opportunities for those who can’t get on the housing market – they can save up while they’re in our properties,” adds Rick.

“If landlords do it well with the right motivation, helping people rather than trying to squeeze everything out of them, the private rental sector has a very strong future.”

Read more about HMOs.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – How Rick Gannon went from career break to £7m HMO portfolio | LandlordZONE.

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Q2 Update – Landlord Tax Planning 2021

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In this video interview, Chartered Accountant Andrew Roberts discusses recent and possible new changes to the tax system affecting UK Private Rented Sector landlords with Mark Alexander, founder of the Property118 Tax team.

Learn more about the extra Stamp Duty now payable payable by UK property buyers who reside overseas

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Government funding to help make building a home easier

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New plans supported by over £150 million in new government funding will make it easier and more affordable for people to build their own homes, the Housing Secretary Robert Jenrick has announced today.

The ‘Help to Build’ scheme will ensure that self and custom home building can become a realistic option to get onto the housing ladder through lower deposit mortgages.

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98% of landlords who evict illegally are not being prosecuted, says report

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Generation Rent has urged police commissioner candidates to tackle illegal eviction after it found just 2% of cases resulted in prosecution.

The housing pressure group says that despite a rise in illegal evictions during the pandemic, many police officers called out to incidents wrongly treat them as civil disputes.

The Ministry of Housing, Communities and Local Government recorded 1,040 cases of homelessness caused by illegal eviction in England in 2019-20 – up from 810 the previous year.

However, Ministry of Justice figures show there have been an average of 24 prosecutions for unlawful eviction each year between 2016 and 2019, the most recent period for which data is available.

Generation Rent is calling on candidates standing for police and crime commissioner in the 6th May elections to pledge to improve training in eviction law, record all incidents involving tenants and landlords, and to work closely with councils to prevent unlawful evictions and bring criminal landlords to justice.

Proper funding

It also wants stronger sentencing guidelines and more powers and resources for councils to lead work to prevent illegal evictions. While local authorities and police officers have powers to stop illegal eviction and prosecute offenders, it believes few councils have fully-funded tenancy relations officers to perform this role.

Director Alicia Kennedy (left) says being evicted illegally, often with your belongings dumped on the street, is devastating.

She adds: “We have legal protections for renters for a very good reason, but when the police fail to enforce these and we end up with a tiny minority going to court, renters lose confidence in the law and criminal landlords act with impunity.

“May’s elections are an opportunity for police forces up and down the country to reset their attitudes to illegal eviction and make sure that everyone gets the protection they deserve.”

Read more about illegal evictions.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – 98% of landlords who evict illegally are not being prosecuted, says report | LandlordZONE.

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My battle with Rosinca formerly Mortgage Express?

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I’m about to start a battle with Rosinca Mortgages. Today I woke up and opened a letter from Rosinca, and  I am incandescent because they’re threatening to repossess me. My calm response to my distressed daughter was “Sweetie – let them bring it on”.

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‘We were there for the start of UK’s renting revolution’

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Cast your mind back 25 years to the year 1996 – were you a landlord?

The private rented sector looked very different back then, but change was afoot. The 1988 and 1996 Housing Acts catalysed the transformation of the sector, which has grown from 2.1 million households in 1996 to a projected 5.8 million by the end of this year.

As we emerge from the pandemic and look to what we all hope is a brighter future, it’s a timely moment to reflect on a sector which has evolved beyond recognition over the past quarter of a century.

And we also have a birthday to celebrate. Hamilton Fraser, parent company to LandlordZONE and our insurance partner, Hamilton Fraser Total Landlord Insurance, celebrates its 25^th birthday later this year.

With the five year-year survival rate for businesses standing at around 40 per cent, it is no mean feat that Hamilton Fraser is not only surviving, but thriving, 25 years on from its inception in October 1996.

To mark 25 years in the private rented sector, the company has launched its birthday celebrations by sharing its story of success in The journey – a 25 year history of renting in the UK.

This potted history charts the evolution of the rental sector from its beginnings in the 13^th century, focusing on the 20^th and 21^st centuries and the part that Hamilton Fraser and its partners have played in shaping the private rented sector.

From the launch of its first landlord insurance product in 1996, to being at the forefront of tenancy deposit protection in 2007 and the recent launch of a deposit replacement product, over the years the company has been instrumental in some of the biggest changes involving regulation, reform and redress within the sector. 

Eddie Hooker, CEO at Hamilton Fraser, comments, “We could never have predicted the pace of change we have witnessed over the last 25 years. However, the biggest privilege is to have been a significant part of that evolution.

“We are committed to continued investment in raising industry standards and advocating for support and transparency in our markets. Thank you to everyone who has made Hamilton Fraser the success it is, and for joining us on our 25 year journey.”

Read ‘The journey – a 25 year history of renting in the UK’ here.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ‘We were there for the start of UK’s renting revolution’ | LandlordZONE.

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When should tenants report an unlicensed HMO?

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A theoretical question for a hypothetical tenant living in an HMO. Let’s assume the tenancy agreement was for one year, commencing on 1st January 2021 and ending on 31st December 2021.

The landlord’s HMO licence is a five-year licence and expires on 1st July 2021 (midway through the tenancy).

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Another huge fine for a Bristol HMO landlord as council intensifies crackdown

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Bristol council has struck for the third time this year with a huge £30,000 fine for a landlord who pleaded guilty to maintenance and safety failures at three HMOs.

Landlord Naomi Knapp of East Street, Bedminster has agreed to pay the sum which includes fines, costs and victim surcharges in £2,000-per-month instalments after revealing that she had been managing 18 rented properties within the city without support.

Details of her poor property management at the three HMOs came out during a hearing at Bristol Magistrates Court, including shocking ‘slum’ pictures taken by the council at the addresses.

During the hearing, Knapp said in mitigation that she had subsequently carried out required remedial work at the houses, had secured the required safety certificates and would rent out the properties along with 15 of her other homes in future via a qualified property management company.

The prosecution of Knapp followed a visit by members of the Bristol City Council’s Private Housing Team last summer to the properties in Dartmoor Street (pictured), St John’s Lane and Wedmore Vale following complaints from tenants.

The properties were found to be in breach of the Management of Houses in Multiple Occupation (England) Regulations 2006 including inadequate fire escape provision, disrepair and other safety breaches. Knapp had also failured to complete promised property upgrades.

Third prosecution

Tom Gilchrist, Bristol City Council’s Private Housing Service Manager, said: “This is the third successful prosecution brought by the Private Housing Team this year.

“We continue to bring to court landlords that fail in their responsibility to adequately manage their multiple occupied properties.

“Naomi Knapp is a portfolio landlord who has been renting property for many years and the magistrates commented that as such she should have the knowledge and experience to act on the issues identified.”

Read more about Bristol’s HMO crackdown.

PIC credit: Google

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Another huge fine for a Bristol HMO landlord as council intensifies crackdown | LandlordZONE.

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ANALYSIS: Commercial landlords struggling under weight of debt

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When Covid support ends this summer, significant numbers of companies could be in financial distress as the pressure will really pile on.

There are a significant number of companies reported to be in significant financial distress as company debts rise at the fastest rate since the 2008-2010 recession.

Record numbers of UK commercial real estate companies could also be in default with their bank loans as the various schemes of government support come to an end this summer, that’s the view of insolvency specialists.

Dozens of commercial real-estate and other companies have shored up their balance sheets by increasing their loans during the pandemic, these loans surging to the highest level of loan finance since the financial crisis.

Defaults on commercial property debt are likely to rise significantly according to a University of London Business School study. The University’s survey found that loans either in default or in breach of one or more terms has reached 8.6% of all outstanding loans.

UK landlords have been temporarily banned from evicting commercial tenants who are in default. When tenants have failed to pay their rent, or failed to pay on time, since the coronavirus pandemic began, the government has imposed restrictions on landlords taking tenants to court or on evictions.

Evictions hit

This has hit landlord owners in the retail and hospitality sector particularly hard and it has in turn spurred the decline in retail store values, resulting in some companies breaching their loan agreements by default.

As the 30th of June arrives, many commercial landlords in England will expect to breathe a sigh of relief as they should be in a position to reassert some authority over their non-paying tenants.

However, their troubles may not be over yet as many tenants will be unable to pay in full in the short term and the government is currently seeking views on possible next steps to be taken to ease the way out of the crisis for struggling tenants.  

Current position

• There is a moratorium on forfeiture until 30 June 2021;]
• Recovery for commercial rent arrears (CRAR) cannot be used unless tenants owe at least 457 days’ rent between 25 March – 23 June 2021, and 554 days’ rent between the 24 – 30 June 2021.
• There is a temporary ban on issuing winding-up petitions where debts are as a result of the pandemic, again until 30 June 2021.

More generally, in the whole economy, around 100,000 are said to have been in some form of distress in the first three months of this year compared with the last quarter of 2020. That is despite the government’s ban on winding-up petitions.

Further, over 720,000 businesses are now said to be in significant financial distress according to data from insolvency practitioners, Begbies Traynor, who say that this figure represents a 15 per cent rise from the previous quarter and the largest increase since the company’s data research began in 2014.

Begbies Traynor has found that companies in financial difficulty now span all 22 sectors of the economy which strongly indicates a broad and gradually deteriorating financial situation in the UK economy.  

The outlook for many companies seems particularly gloomy at present when bankers and insolvency practitioners are issuing strong warnings that the UK is facing widespread business failures. This could be exacerbated when the government winds down its Covid support measures, especially if this results in a “cliff-edge” scenario at the end of June when landlords start to demand repayment of up to 12 month’s outstanding rent.  

In danger

Some retailers, hotels and restaurant businesses will be in danger of having to hand back their keys unless they see a fairly rapid improvement in trading or they can come to some negotiated settlement with their landlords.

Many so called “zombie” businesses have only just been able to stay afloat using government support and are the most likely to go to the wall.

Julie Palmer, partner at Begbies Traynor (pictured) tells the FT: “The dam of zombie businesses could be about to break.

“Unmanageable levels of debts and subsequent overtrading are likely to be the hidden icebergs waiting to sink even the highest profile businesses.”

Ric Traynor, executive chair of Begbies Traynor, says: “Despite the unprecedented central government support offered to UK businesses, it is now clear that many companies are struggling under the weight of increased debt combined with poor revenue streams.”

Read more about commercial property and Covid.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ANALYSIS: Commercial landlords struggling under weight of debt | LandlordZONE.

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City firm to spend hoover up 2,000 rental properties and ‘professionalise’ them

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A big new business venture aims to give private landlords a run for their money by buying up and refurbishing thousands of rental properties.

Real estate fund manager, Moorfield Group, and PropTech residential investment platform, Bricklane, have joined forces to invest £600 million in buying up 2,000 one to four-bedroom houses and flats over the next two years, mainly in London, Bristol and the South East – and “professionalise” them.

They plan to target rental properties expected to outperform in those areas, and then to grow income and capital values through active asset management and refurbishing them to provide professional, high spec properties for tenants.

By focusing particularly on the 98% of the rental market owned by the UK’s 2.5 million buy-to-let landlords, it expects to deliver attractive returns and provide quality homes to a wider range of tenants, while also avoiding the carbon-cost of demolition and building new homes.

Rise of BTR

Bricklane this partnership sees the UK beginning to follow the example of the US single-family (or build to rent) residential market, where institutional investment in existing properties has grown from almost nothing to $40 billion in ten years.

Simon Heawood, CEO and co-founder of Bricklane, says: “The time is ripe for institutional capital to access and professionalise the mainstream private rented sector.

“Demand is at an all-time high, while it is becoming less financially attractive for individual landlords to operate in the sector. Moreover, tenants are rightly demanding higher quality service and more secure contracts for their homes.”

Properties will be managed by Bricklane through its proprietary technology platform, Compass.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – City firm to spend hoover up 2,000 rental properties and ‘professionalise’ them | LandlordZONE.

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