Investing in property is not a new way of ensuring you have a pension fund for financing your retirement dreams. If you're anything like me, you have wild plans of travelling the world in a campervan and a pair of patchwork harem pants and trying out every hobby from bingo to BASE jumping…and that stuff costs some cash.
However, when most people decide to plough some money into a property, they generally go for a single let or a professional HMO if they feel confident. One of our customers, Maddy Norridge, is not one of these people. She recently chatted with COHO's Helen Turner and told us all about how she found her unconventional path into property and how COHO is helping her achieve her altruistic ambitions.
Maddy's previous career choices have a strong common theme of a desire to help others in caring and teaching roles. She began as a physiotherapist in the care sector and dedicated ten years to be at home, raising her children. When she returned to paid work, she began teaching in a further education college where she predominantly taught a-level students. Five years into this role, she taught a class of GCSE students and during her one-to-one meetings with them, she discovered that seven of the twenty-one students she taught did not know where they were sleeping that night. This struck a chord with Maddy, and she began looking for an opportunity to do something about it.
Maddy didn't know where her search would take her, but she knew she was desperate to take action. A chance encounter with Frank Flegg of Ethical Property Partners gave her the opportunity she had been searching for. EPP offers strategies to franchisees to support them in building a successful property investment business. With the support and backing of EPP, Maddy has set up her business and accomplished her objective of addressing issues around homelessness.
At a conference, I met a guy and asked him what he did for a living. He said, “I house homeless people” and I said… “you need to show me how to do that!” He has been my mentor in setting up a property business solely centred around housing homeless people.
Maddy achieves this by partnering up with local charities in Northamptonshire to provide accessible housing for vulnerable people who would otherwise be homeless. Maddy recently won the HMO award for 'best social housing investor' because of her portfolio of 18 HMOs, six of which she owns and 12 that investors own. Maddy manages the investor-owned properties alongside her own, giving the investors a great financial and social return.
During her interview, Maddy explained to Helen how dealing with charities and offering housing to the homeless differs from managing properties in the mainstream rental market. Many charities Maddy works with have little to no experience with property or assisting their clients with finding accommodation. This means progress can be slow, and it took Maddy around six months to find a charity that would help her fill her first property with people seeking accommodation.
Maddy's business sits within an industry that generally caters to a very different clientele, and the regulations reflect that. She describes how inspectors generally look for high-end accommodation, but for Maddy's tenants, that is not an environment they would feel comfortable in. Like everybody else, they are less likely to be successful if they don't feel comfortable, so her houses are designed to cater to their specific needs. The niche that Maddy's business sits in comes with some quirks that may put some people off and require a specific set of skills to manage, but none of these quirks are insurmountable.
We are dealing with a client group who often don't know how to look after a home, so we are working to support them to grow in that area.
Her properties require more regular maintenance than the average HMO. Maddy works collaboratively with other agencies and charities to help the tenants learn the skills needed to look after a home.
Maddy's room rentals work in two different ways. Either a charity leases the property (typically on a three to five-year lease) directly from Maddy so that they can accommodate their clients in need of housing, or Maddy claims payments for a tenant directly from housing benefit at a rate that is pegged to the local housing allowance.
She understands why people may feel dubious about the financial integrity of providing social housing, but she is very clear that it works financially for everybody involved. The charities can claim financial support from the local authority, which they can inject back into the services they provide.
The investors are making a profit upwards of 10% on their initial 25% deposit. The clients have safe and secure accommodation. Maddy knows that she has made a difference. The cooperative approach means it sits in an odd place but works for everyone involved.
I imagine people think it is impossible to make it work financially. We find it to be really successful. The thing that I love about it is that it's a win in every direction… It's a win for me because I get to bed at night knowing that 85 people get to put their head on a pillow tonight that might be in a shed or a park bench if I wasn't doing what I'm doing.
Maddy likes to call her investors ‘armchair investors’ as they are typically people with a bit of funds that they would like to invest in property but not much time to do it. Maddy provides a comprehensive service, from the legal administration of buying a property right through to renovations if needed. The only financial outlay the investors have is the deposit and the mortgage application fee. Maddy can also offer opportunities for financial investment for those interested. For example, she has just raised a quarter of a million pounds to buy twenty-six flats in Bedford, three of which will be taken on by the local council to provide housing for Afghan and Ukrainian refugees.
Maddy had been running her business independently until about eight weeks ago when she took on a sixteen-hour-a-week PA. Maddy's only admin support up to this point was a clunky, old-access database that she had been using for years but found very restrictive and difficult to work with.
I dabbled in it, and when I bought my PA on board, I introduced her to COHO on day one. She spent half a day on it and loved it.
After a friend mentioned COHO to her, Maddy accessed our demo. She thought that COHO's software might just work for her and became a COHO customer around the same time she employed her PA, so both combined have helped her massively to streamline her administrative procedures.
Maddy feels that COHO has provided her with the financial understanding and cohesiveness she wanted from a management software package. She was waiting for COHO's finance update to help her manage her own and her investor's finances better before she came on board with COHO, and she is satisfied that it has provided her with what she was looking for. Although she was predominantly looking to benefit from the financial management side of what COHO offers, Maddy is now loving the tenancy management features too.
Maddy explained how she completed her first 'month end' using COHO and described the simple steps she needed to take to create her settlement statements to send to her property owners. She described it as the easiest ‘month end' she has ever done and had unanimously positive feedback from the landlords about how user-friendly the new settlement statements were compared to Maddy's old system.
Across all twelve settlement statements, Maddy has to produce each month she believes she has saved approximately 5 hours by having COHO do the work for her.
I just find COHO super-intuitive; I honestly think it's the management system for the new generation… it's just so intuitive to use.
The number of homeless people throughout the UK is difficult to quantify, as many homeless people are not represented on official statistics as they have no fixed abode but are not ‘visibly homeless’. We do, however, know that on any given night, tens of thousands of individuals and families do not have a safe and warm place to sleep. We also know that for the last five years, homelessness in England has been rising, and by the end of 2021, 227,000 households across Britain were experiencing homelessness, according to Crisis UK.
Maddy is working exceptionally hard to make a difference to these numbers and to make a difference on an individual level in supporting people to rebuild their lives by providing them with a home. We are very proud to support Maddy in achieving this and hope you can join us in congratulating her on all she is doing for the homeless communities she helps. If you want to contact Maddy to discuss investing in social housing, you can reach out to her via her Facebook page - Stepping Stones Northampton.
If you would like to get in contact with COHO to see how we can help you have a deeper understanding of your business's financial data, just as Maddy did, try an Instant demo or book a live demo to find out how we can help.