Have you ever heard of Multi Generational Holidays Lets as a money making property strategy?
For most of this week, I attended 3 days of intense property training in the North of England with a well-known property guru called Aran Curry. I have attended Aran´s training previously and he is very good at what he does, and is also an excellent mentor and coach. He practices what he preaches and owns 200 properties with his joint venture partners.
Apart from making himself extremely wealthy through his own investment in property, Aran has created several businesses related to property including a “Done For You” property sourcing service for clients, a lettings business multi generational, and a large education multi generational business from where he has trained hundreds of thousands of people about the UK property market and the best strategies to use. Not all of Aran´s clients are actually based in the UK. Some of them are based overseas but invest in UK property.
The fundamentals of the property market in the UK are that there is a critical shortage of accommodation for sale and for rental purposes. Hence the trend for prices of both properties for sale and for a rental is upwards.
Multi Generational Holidays in England
With the Multi generational holidays let strategy, Aran applies all those 4 profit levers to a particular niche within the Multi Generational Holidays lettings market, that has a massive return on investment.
Over the last 90 years, the average increase of house price sales values has been an increase of approximately 7.9% per annum, depending on the particular area concerned this may be slightly more or less, but that is the national average increase. So every 8 years or so, the price of a property doubles, typically, across the whole of the UK.
Rental prices have also increased as well, more or less in line with inflation, and have increased particularly over the last couple of years, since covid and its aftermath. Short-term rental prices are significantly above those for a normal Assured Shorthold tenancy, and also the “guest” in a holiday let has fewer legal rights than an assured shorthold tenant ( it is like a hotel guest who if he does not pay has no right to stay at the property and can be immediately evicted.
So this describes two of the four ways in which you can get revenue from property, firstly capital appreciation, and secondly from cashflow, if you rent out your property. The cashflow with multi generational holiday lets is higher and is a sweet spot in the marketplace. This is because it is a larger than usual property for which there is demand from Multi generational holidaying families.
The other way in which you can get money from property is by buying at a discount. If you manage to buy at 25% below market value, this can significantly increase the leverage which you can apply to your property purchasing. For illustration, if you managed to buy 4 houses multi generational and they were at a 25% discount, that would enable you to use the funds that you saved using a discount, to buy an extra house! The figures are, 75% mortgage on a 100K GBP house x 4 = 100k equity in order to buy 4 houses. If you get a 25% discount ie 25k, then you can use that as a deposit on another property worth 100k GBP, since you can leverage the mortgage of 75%.
Then there is a fourth very powerful lever that enables you to make more money from property, which is the ability to refinance property, to take advantage of discounts that you may receive and also the capital growth that takes place every year.
When you take these 4 key factors that enable you to make money from property, it is no surprise that with the right knowledge and applying the right strategies, you can increase the value of your investment considerably.
Aran Curry acknowledges that he has made many mistakes along the way. He even owns up that the first 10 properties that he bought in a joint venture with his friend, were a complete disaster and he made many mistakes .
What Aran Curry has done is quickly learn from his mistakes and analyze the property market in the UK, so that he now knows very specifically the right criteria to apply when looking to purchase properties in any area of the UK, and the right type of properties for maximum return on investment Multi Generational.
Some of the areas of the market are overheated and so do not make the right sort of returns because they require too much capital investment multi generational, and the returns are too small. Examples of such areas are London and Kent in the South East of England, where relatively rents are not so good in relation to very high property values, ie the amount you need to invest is large to start with.
Aran simply advises people not to invest in those areas, but rather to invest in areas requiring less capital investment and which give higher returns on investment. This makes perfect sense.
In general Aran Curry does not recommend people to invest in the South of England where prices are higher and returns are lower relatively.
Once you decide on the right area to invest, Aran will guide you about the right criteria to apply for different strategies, such as Family Lets, or Houses of Multiple Occupations (co Living), or Serviced Accommodation/Short-Term Rentals.
For a family let, the criteria may include proximity to award-winning schools, hospitals and other family-related facilities, such as child care, as well as public transport links.
For A House Of Multiple Occupation proximity to centers of employment, (usually towns) is important, also proximity to public transport for the residents to get to work.
Serviced Accommodation could be located near centres of employment, whereas Holiday Lets would be more likely to be in rural or seaside areas of interest to tourists, so these are 2 distinct property strategies..
Aran applies his predetermined selection criteria for each strategy rigorously and applies what he calls a DE-SELECTION PROCESS rather than a selection process
If ANY OF THE REQUIRED CRITERIA are not met then Aran will reject that “suspect” deal, which must also comply with all other selection criteria and the necessary profitability from the deal analyzer as well, in order to be progressed to purchase.
I have followed Aran Curry for some time now, and there is one particular strategy that I like, which is that of Multi-Generational Holiday Lets. What this means is that the grandparents, parents, and children or grandchildren will all go on multi generational holiday together, so the sweet spot for profitability is a house that sleeps 16 to 20 people, which is a large house of 8 bedrooms or more.
Research has shown that grandparents, especially like such multi-generational holiday lets. Since Covid occurred there has been a “Staycation” boom in the UK, and many families prefer to multi generational holiday in the Uk rather than travel overseas with all the associated expenses and risks involved, of possible covid infection, hospitalization abroad etc.
Because no one is building such big houses anymore (those with 8 bedrooms or more), the demand for such larger properties exceeds the supply, hence a premium can be gained from renting them out, especially for short-term rentals.
Of course, there need to be suitable multi generational facilities within the house, such as 3-4 bathrooms or shower rooms, a large kitchen and dining room, suitable for 16+ people and also a large lunge are for the same numbers. Ideally, they should also be fitted with a jacuzzi or hot tub as well.
I have never heard of any of the (many) other property gurus in the UK talk about such a strategy, and Aran practices what he preaches because he is already operating such assets at the moment and is seeking several more of the same sort of business model.
I am aiming to use this multi generational holiday let strategy mysel in the near future, so will keep you posted about developments in this regard.
I wish you all a successful week ahead as we race towards the middle of February 2023.
If you have a large property that may be causing you problems because it is unused or under-used and the costs make it uneconomical, then contact Alan on 07539 141257 or 03332241257 or schedule a call with Alan on https://calendly.com/alanje or drop an email to alan@alpusgroup.com. Alpus transforms property value and we can give you the best possible price for your property, ie buy it at market value if you are flexible about the terms and conditions of sale.