Watch: Branding for property investors: How to build a premium, profitable, and recognizable HMO business

Matt Baker (00:10.403)

Good afternoon. How are we all doing? Yeah. Yeah, having a good time. I’m very excited for today. It’s first time I’ve seen so many HMO people in one place. Lots of people that I’ve met online before and a lot of people that are taller than I imagine they would be. But yes, today I’m going to be talking about the art of standing out. And before I get into that, I just want to ask a question.

Who here would benefit from an extra 24 % or more on their bottom line for your business? Okay, a people with their hands still down, but yes, that should be everybody. And that’s what we’re going to get into today. And it all starts with the art of standing out and your brand. So what does it mean to brand? Well, historically, it was when we got a long stick of iron, we got it really hot and we stuck it on the ass of a cow.

And what they’re trying to do is they’re trying to claim ownership of those cows to make sure other people don’t go and steal them and take them away. Now, if we move that forward to our business, then what that means is we want to have people to recognize what it is that we do and to put our own stamp on things. Now, when we’re putting our stamp on things, we want people to recognize the products, the services that we deliver. And so that they know

what it is that we do, but not only what it is that we do, but how that we do it. And that is really important. We want to create something which is yours, but recognizably yours. When you’ve got a brand, what this does, it evokes feelings, it evokes emotions. Now, if you’re going to go and create a property and you deliver a good property, which has a good service, your tenants are going to go out there and they’re to say,

My landlord does an amazing job. An absolutely amazing job. And they go and tell their friends, and their friends say, yeah, great, my friend’s living in a house, and the landlord does an amazing job. But you can’t go online, you can’t go on Google and search for my friend’s landlord that does an amazing job.

Matt Baker (02:24.705)

However, if your tenant says, my landlord’s really great. I’m living in a pro-pod. I’m living in a co-home. I’m living in a Higgihaus. Then that is something which is very tangible. You can then take that. You can Google it. And that person who wants to replicate that living experience that their friend is getting, they can then go and find out and become another raving fan. And that’s what we’re looking for.

We want raving fans to our business. And I just haven’t talked a lot about property. It is about your business because when you make it recognisably yours, things start to work a lot better. And this starts to happen. You start to get people queuing up to move into your properties. You get people living in other HMOs wanting to move into your HMO and happy to wait for it. So this happens. So this is queues of people outside of the Apple Store and…

These people probably queued overnight to get the latest gadget that they brought out because it’s an Apple. Now they could have gone online, found a different product which was probably cheaper and got it delivered straight to their home. But no, they came outside, they queued overnight to get that product. Now if we follow that analogy a little bit more and let’s say you want to go and buy a new computer. What are you going to do?

you’re probably going to go down somewhere like PC World, you walk in the front door and then you turn to the left. So you go down to the left and over there you’ve got rows upon rows of laptops. In like manufacturers like Dell, Hewlett-Packard, Acer, Asus, Asos, Asus. They’re all the same. And what you start doing, you start looking at the label and you’re looking at the numbers.

Okay, is that number supposed to be higher, supposed to be lower? Is it a good idea that it’s bigger, that it’s smaller? How heavy is it? You get really confused wandering around those aisles. And then you go and ask for some help, there’s nobody around. So what do you then do? You start looking at the most important number, which is the price. So at this point, go, well, what is the best value for this price? And again, you get really confused.

Matt Baker (04:44.619)

So you end up going with something which is probably on the lower side. This is an example of a highly commoditized marketplace. Now let’s reimagine walking into that shop. And this time, you’re going to walk to the right. And instead of having row upon row upon row of black, silver laptops, you then got one table. And on that table, there are three or four options. You’ve got your iMac, you’ve got your Mac Pro, your MacBook Air.

your iPad Air, your iPad Pro, whatever they call them. And you notice there isn’t the word computer to be seen at all. It’s got its own identity, its own brand. And that’s what is the magic. People fall over themselves to get that Apple, to get that latest product, even though it’s three or four times more what they’re selling over there, even though does exactly the same thing.

And it’s called something else. It’s its own identity, its own brand. And it started back in 1998 when Steve Jobs brought out the iMac G3. It was this one, this colourful, sexy looking beast, which had everything all included. You turned it on and it just worked. And since then, profit margins for Apple’s have been well over 20%. But for your computers, your general PCs, where it’s highly commoditized, where it’s hard to tell them apart, there’s only one way that profits will go, which is down.

So this is what we’re looking to do. And this is a macro look of what the HMO market looks like. And our PCs, the left-hand side of the shop when we went in is our highly commoditized marketplace. It’s the beige box. If you imagine back to computers of old, none of you are probably old enough to remember when you had floppy disks and you to use MS-DOS to code it. But you think about it to those computers, they were very much beige boxes. Similarly, your beige HMO.

And I think the idea or the modern equivalent of a beige HMO is probably a gray feature wall or a furniture pack. And you go onto spare room and you start to see the same thing cropping up time and time again. You’re no longer standing out. We’ve been victim to that over the seven, eight years that we’ve been developing and evolving what it is that we do. So where we want to be is in that top 5 % of our marketplace. Because the best quality customers, the best high value tenants,

Matt Baker (07:08.96)

will pay for quality space, quality design, and quality service. We call them next level HMOs in what we do. And that is where the magic starts to happen. So what does it mean to brand your property or your business? I think it’s really important to keep it simple. We’re not talking about lots of major changes that you’re going to be doing all in one go. We’re talking about little incremental changes that can compound over time to give you massive.

Results. And it all starts with this. Your mission, your vision, and your values. So who here has a mission, vision, or values for their property business? So probably about a quarter of the room. So congratulations for you guys. You’re on the right track. For those of you that don’t, I think it should be really high on your agenda when you leave here today. And here’s an example of ours. And these form the foundation of everything that we do at the Scott Baker Property Group.

So we look to build community, whether that’s community within our houses, where housemates can form meaningful relationships, whether it’s within our team. We have a team of staff that we want to make sure that they have a really tight-knit community, a tight-knit bond, or whether that’s with the clients that we work with. And we have an amazing group of people that do amazing things within our community. Then the second thing is to inspire creativity, so that our team…

and ourselves know how to find creative solutions to problems, to find that creative way through. And then ultimately to be the best you. And that’s mainly for my remembering to wake up with a smile on my face. But I’ll come into a moment how we can implement that within our portfolios as well. But to be the best version of yourself is to get the best results.

So there are two things that we need to focus on. The product, which is the house, the thing that you create and the service, which is how you run it and how you do it. focusing on the product to start with. I’m not gonna go into interior design. There are some amazing speakers that are gonna do that later on. But I’m gonna talk about the fundamental of your business, which starts with your design brief. And I’m not talking about a design brief for a singular house. I’m talking about a design brief for your business.

Matt Baker (09:32.235)

So we call it our design blueprint. And that’s something which you can take and apply it to across your portfolio. And that doesn’t just mean one property, it’s the many. And here’s the example. So this is a property that we’ve got in Portsmouth. You might just think, well, that’s just a nice looking HMO room. And that’s what it’s designed to be. It’s designed to be a space which is welcoming. It’s not a wow room. What it is,

is a room which is meant to be homely. And that’s our brand. And if you move it forward, this is a project that we’re currently working on, it’s a CGI. It’s the same design blueprint. So you can see it’s pretty similar. So people recognize what it is. They know what they’re going to get. And that is formed by those core values. So think about that value of be the best you.

Be the best you is to have the best experience. When our tenants move in, we want them to be the best versions of themselves. We want them to have a positive experience. So we do things like writing affirmations over doorways of their bedrooms. So it’s subconsciously going in. We focus on design elements which are attached to nature. Because we know that when you bring the natural world into design, it really encourages wellbeing. And we know when our tenants…

that they are well within themselves. There then are fewer issues amongst tenants, fewer management hassles, and they’re then more likely to get on with their housemates. And then when they get on with their housemates, they’re happy living where they are. Therefore, they stay a long period of time. The longer a tenant stays, the more profitable your business becomes. Here’s another example. This is the kitchen from the same property. Again, standard, nice looking kitchen. We say take the same blueprint and put it across.

Our latest project, you can see it’s the same rules, the same brief.

Matt Baker (11:32.724)

So, moving on to service. Again, this isn’t the room for HMO management, that’s the one on other side of the halls. I’m not going to go into detail. But when it comes to service, you can have an input into this as the investor, as the landlord that owns that property. Either you’re doing it yourself and whenever we manage, we use something which we call the co-living approach. Now, this is something which I go into more detail in my book, which I’ll tell you about a little bit later on. But the co-living approach is about helping…

tenants to form those meaningful relationships for the reasons I mentioned just before. But there’s no reason why you couldn’t work with a good quality agent and white label their services. So you can take your design brand, your blueprint, put it all together and you might create five or 10 houses in an area, work with a good quality managing agency and I think good quality agents will be open to this idea whereby you have the…

a unique idea and they just implement the service. And then you’re starting to stand out. You’re back in that top 5%. And this is the result. We want our tenants to get on. We want them to make your house their home so that they stay, so that they pay. And the tenants that we have are paying really high rents for this as well. And we know that it’s always the best quality rooms, the most expensive rooms,

which sell first every single time, every single time without fail.

So, why should we bother? You might be thinking, well, I’m doing okay. The market’s so hot right now, I can pretty much rent anything under the sun. And experiencing that, it’s a great time to be a landlord in that regards. But you might think, well, why should I bother? Because it’s expensive to implement, it might be a little bit more hassle, but the outcome is clear. We don’t want to fall into the commoditized market trap.

Matt Baker (13:37.929)

The market’s not always going to be as hot as it is now. But if you stay in that top 5 % and your brand is what gets you there and keeps you there, then you start to get that increased rent, that increased profitability. But what I love about creating a next level HMO is that it also gives you that service level agreement with your business, within your business, but also with your customers, your tenants. Because to get in the top 5 % is one thing.

but to stay there is another. But just before I come on to that, this is an example of rents that can be achieved. This is Portsmouth PO2, this is where we’ve got some properties. And I’ve just gone into spare room. Sorry, Coho, I know you do a report as well, but I’ve been using this for years, so this was easier to find. So we know that we can get the average room rent of 580 for PO2. The maximum is currently being marketed is pretty much 725.

That’s a 24 % increase in your rents. And we know there’s only one way that that is going to go.

So it’s about future proofing your property. It’s about ensuring that we don’t fall into that commoditized marketplace. It’s about ensuring that we get there, but then we stay there. As I was saying before, to stay in the top 5 % is about reinvesting. And the biggest loss to the HMO sector right now is poor quality HMOs, poor quality landlords selling up.

So the supply of properties is drying up. So you’ve got these landlords that 20, 30 years ago, they bought the property, they invested in it, and then over time they spent no money at all. And again, we’re seeing it time and time again, where those properties are coming to the market, often being bought by families, which is not a bad thing. What it does is it does reduce that supply dramatically, which is a great thing for us that have got properties in the area, but over the long term is a really bad thing for the HMO market in general.

Matt Baker (15:42.792)

So you want to get there and we want to stay there. So those landlords that are doing that, those are the lazy landlords. So my suggestion to you is don’t become a lazy landlord. Focus on your brand. Focus on being in that top 5%. Then you shall have success and a future proof portfolio to boot. Thank you very much for listening. If you want to hear a bit more about

My thoughts about the HMA market, then I have written a book, Next Level Landlord, which is a double bestseller. And we’ve got a handful of books which we can give with our compliments. They are out by the goodie bags. They will go quite quickly. If you do want to get a copy, then there is a leaflet in your bag for the HMA platform. You can just give us a call and we’ll send you one in the post. I just wanted to say thank you very much for listening. I have been Matt Baker. Enjoy the rest of your afternoon. Good luck with the awards.