Asylum property investment does require a different mindset
The key thing to stress and what we have continued to stress in the last few years is that asylum property investments are not for everyone. They definitely add to the diversification of an investment portfolio, but it requires a certain type of investor to truly benefit from the product.
First and foremost, it sits very well with investors that understand asylum seekers and refugees are vulnerable groups that need support and protection. Yes, there have been stories in the last decade where scrupulous individuals have made vast sums of money in this sector but we do not wish to engage with such types of investors, nor do we encourage it. We’d like to think that by offering such a product, we can alleviate the burden for the government and at the same time, offer good quality and presentable homes to individuals that need basic provisions. In return, we’re happy to secure good, long term rents secured on a long term contract.
It has to be said, the sourcing of these types of asylum seeker investments requires a methodical understanding of all stakeholders needs and requirements. We must contend with the demands of our investor clients, the stipulations in place by the government agencies and just as important, the long term needs of the prospective tenant. This last point also has an overarching imprint on the longevity of the tenant and thus the ‘hands-off’ model for the investor client. For example, we need to be able to secure the property in an area in which the tenant will feel comfortable settling in and making it their home for the foreseeable future. Whilst the contract is long term and upto 7 years inclusive, there is a break clause in place should the government find that the tenants cannot settle to to difficulties and social wellbeing of the asylum seeker tenant. What this means in effect that we should be careful to ensure that the areas where the properties are to be secured are safe and open to individuals and families of different ethnic persuasions. The last thing we need is a disturbance or incident which requires police involvement.
Will an asylum property investment require hands on management?
We get asked this question quite a lot and we offer our investors two options. Before we outline these options, it must be said that after 18 months of being involved in this sector, we would generally say that you would not require management. We are certainly not helping ourselves here by potentially losing revenue, but in general terms and for what we’ve seen, there is not in general, a need to get this type of investment managed.
However, for every 4 properties where nothing ever goes wrong, there’s always 1 case where attention is required. That is just the nature of the way things work and we usually see things requiring attention at the most inconvenient of times i.e. when it snows, during Christmas, during bank holidays and so on. So, with these two considerations in mind, we offer two options.
- Managed – if you live outside of Greater Manchester and the North West of England in general, then yes, we would recommend that you get us to manage the asylum property investment. The choice is wholly and completely yours, but if you are unable to get to the property or to manage local tradesmen, then you need something to take care of this when things go wrong.
- Unmanaged – we would say that if you live within 30 kilometers of Manchester and have experience in managing your own portfolio of properties, then there really isn’t a need to use us as your property managers.
You can read more about the managed options we offer by clicking on how to manage asylum property.
So tell me! Should get involved in asylum property investment?
The choice is completely yours! However, we think this posting will help to identify what type of investor should consider asylum property investment. To read more about it, please read the asylum seeker property investments brochure.