I think I’ve mentioned before that I think property is a really good business opportunity – even in a recession.
In some ways it is as good or better than the boom years. EXCEPT the best property opportunities at the moment are different. They’re not so much about buying, selling, renovating and renting. Rather, more innovative and dynamic ways of making money from property.
Here’s just such an opportunity. I got the idea while reviewing some American business opportunity packages. And I think that like many American ideas it would work just as well here, even if in a smaller way.
Repossessed Property
Now, if you scan the estate agents’ websites from time to time like I do (always on the lookout for a deal!) you’ll know that there are a LOT of empty properties for sale at the moment. Many of them are repossessions.
And that’s just what this opportunity is about, NOT buying and selling repossessed property by the way, but preparing the thousands of repossessions for resale.
This doesn’t apply to all repossessed houses… but quite frequently they are left in a bit of a mess by the last occupant. Sometimes they have been badly neglected by an owner who was short of money. Sometimes they have been deliberately trashed by someone who has been evicted, or by intruders or squatters who have also stolen some of the fixtures and fittings.
These repossessed properties are then put up for sale by the bank or building society. The snag is, of course, most people are not interested in buying dirty, trashed properties and if they do won’t pay much for them. This service is designed to clean them up and maintain them for sale.
The package I found is by Les Tyler who operates just such a service – which by all accounts is very successful – in the southwest United States. Like I said, I think this would work just as well in the UK with a few tweaks (Americans tend to call repossessions foreclosures) and bearing in mind the market is smaller here. Les says that it is part of a $2.1 billion industry (in the US, of course), which I can well believe.
The package is called Foreclosure Cleanup Cash. More details are here: http://www.foreclosurecleanupcash.com
Here’s a little of what the package contains:
– How to set up your business. You don’t need any previous property experience or qualifications. (It’s actually easier to set up a business in the UK than the US. You don’t need a licence here.)
– Marketing your service to prospective customers.
– Help with estimating and giving quotations. How to bid on jobs so that you win them.
– How to survey/photograph a property before you start cleaning it up.
– Management tips. So everything runs smoothly. Good to know if you don’t want to do the actual cleaning yourself. (You don’t have to!)
– Loads of useful forms, documents and checklists.
– How to do clean ups. Including important health and safety and environmental information you need to know to do a really professional jobs.
As I said, there are a few differences between the US and UK but the principles are very much the same. It would be a fairly low-tech business that wouldn’t be too hard to start up here, either full or part-time working from home.
What would you need to get started? I don’t think you’d need much capital. Les suggests $500 (about £300) which I think would be ample. Mainly for marketing and cleaning supplies.
One thing. If you don’t want to do the cleaning yourself you could set this up as a supervising-and- managing business. Just find the jobs and hire others to do the actual clean ups, and hire in specialist contractors where needed.
How would you get your clean up jobs? You could ask estate agents and auction houses to refer you to property owners, perhaps in return for a commission. Most estate agents do not want to take on the job of cleaning and maintaining repossessed properties themselves, so might be happy to do this. (Repossessed properties are generally managed by special asset management companies on behalf of banks and building societies).
What exactly would be involved? It depends on the individual property of course. It could be just a quick clean. It could be a very thorough, grimebusters-style deep clean. It could involve removing and recycling large quantities of rubbish, personal effects and furniture (or junk outs as the Americans very colourfully call them). And then, of course, gardening might be needed.
It could involve getting quotes for and supervising property repairs – such as finding a decorator to repaint the property, or a plumber to replace stolen pipework. Really anything to get the property back into decent saleable condition. Property clean-up services also do things like arranging for gas and electricity to be disconnected, water systems drained for the winter and so on. Also things like boarding up property in some cases.
An interesting “plus” for this business is that it does not involve just clean ups, but what Americans call property preservation. Which to us is maintenance – looking after a property until someone buys it, perhaps with a weekly visit to ensure everything is OK. In today’s market properties can take months to sell. So you could earn from each property not just once but regularly for some considerable time.
What would you make from a property clean-up service? It’s a bit tricky to say because it depends on the kind of jobs you do. But I can’t see it being anything less than a few hundred pounds for a simple spring clean up to perhaps several thousand pounds for a house in a very poor condition.
Les says you could make $300-$500 a day (about £180-£300) from this business. Frankly, I think that’s a fairly conservative estimate. (It’s really refreshing to see a business opportunity package that estimates takings on the low side rather than exaggerating them to the high heavens!) I’m sure that with some effort you could make a fair bit more than that from this sort of business.
One last thing: a bit of quick Googling reveals that the Council of Mortgage Lenders (which is the voice of banks and building societies – who actually do the repossessing) estimate there will be about 40,000 repossessions by the end of 2011. That’s about TWICE AS MANY as there were a decade ago. So, for better or worse, this is actually one of those few business opportunities that actually does better in a recession!