#BizUpdate: Recent Challenges & Why I'm Preparing To Buy

It’s been a challenging few months in the property market.

Rising tenant arrears, stubborn interest rates, contractor failures, affordability pressures, and continued uncertainty around legislation are creating new challenges for landlords and investors across the UK.

In this episode, I pull back the curtain and share a completely honest update on what's happening inside my own businesses right now. From portfolio performance and tenant issues to development projects, AI efficiencies, and where I'm deploying capital next, this is a transparent look at the realities of investing in today's market.

🎯 What You'll Learn

• How my HMO and buy-to-let portfolios are performing in 2026
• The tenant challenges we're facing and what they're teaching us
• How AI is helping us reduce costs and improve efficiency
• Lessons learned from a contractor going into liquidation mid-project
• My outlook for the property market over the next 6–18 months

If you're feeling uncertain about the market, struggling with similar challenges, or wondering where the best opportunities lie right now, this episode will give you an honest perspective from someone navigating it every day.

Download your copy of The HMO Investors Guide to The Renters’ Rights Act here: https://thehmoroadmap.co.uk/

💻 Resources & Mentions

• Join my Accelerator Programme: If you’d like my direct input on your current or next project, you can watch this video or book a complimentary strategy call with me here.
• The HMO Roadmap: Feeling overwhelmed? Access 400+ tools, templates, and lessons to help you start, scale, and systemise your HMO business - all in one place. Join here.
• The HMO Community: Got questions or need support? Come and connect with 10,000+ investors inside our Free Facebook Group here.
• Social: Follow me on Instagram for daily HMO tips, advice, and behind-the-scenes updates here.

Transcript

Andy Graham (00:02.67)

Hey, I'm Andy and you're listening to the HMO podcast. Over ten years ago, I set myself the challenge of building my own property portfolio. And what began as a short-term investment plan soon became a long-term commitment to change the way young people live together. I've now built several successful businesses, I've raised millions of pounds of investment and have managed thousands of tenants. Join me and some very special guests to discover the tips, tricks, and hacks, the ups the downs, the best practice and everything else you need to know to start, scale and systemise your very own HMO portfolio now.

Andy Graham (00:40.63)

It's been a couple of months since my last business update. So today I'm going to pull the curtain back and take you behind the scenes, what's been going well recently, what hasn't been going so well. And there's a bit of that. How do I feel about our performance year to date? What's been working? But also, how do I feel about the rest of the year, about the outlook for 2026? There's a lot going on right now. As always, today's episode is going to be a full and honest and very transparent breakdown of everything that I'm doing on a day-to-day basis. And it's just that little reminder that I'm not just here recording podcasts about investing in property. 

I am out there doing it every single day. And as you're about to find out, I'm struggling with the same things that no doubt many of you guys tuning in today are struggling with as well. So if you want to get behind the scenes, if you want to find out what is going on in my business and what's going on in my head, then today's episode is definitely one to stick around for. Let's get into it.

Hey guys, it's Andy here. We're going to be getting back to the podcast in just a moment. But before we do, I want to tell you very quickly about the HMO roadmap. Now, if you're serious about replacing your income, or perhaps you've already got a HMO portfolio that you want to scale up, then the HMO Roadmap really is your one-stop shop. 

Inside the roadmap you'll find a full 60 lesson course delivered by me teaching you how to find more deals, how to fund more deals and raise private finance, how to refurbish great properties, how to fill them with great tenants that stay for longer, and how to manage your properties and tenants for the future. We've also got guest workshops added every single month. We've got new videos added every single week about all sorts of topics. We've got downloadable resources, cheat sheets, and swipe files to help you. We've got case studies from guests and community members who are doing incredible projects that you can learn from. And we've also built an application just for you that allows you to appraise and evaluate your deals, stack them side by side, and track the key metrics that are most important to you. To find out more, head to theHMOroadmap.co.uk now and come and join our incredible community of HMO property investors.

Andy Graham (02:47.852)

Okay, welcome back. So, as always, in my business updates, this is my opportunity to keep it real with you guys because I'm not just here recording podcasts and talking about investing in property. I am actually out there on the front line doing this every single day. And I have been for nearly 20 years now. These episodes, as I've said many times, are my opportunity to keep it real with you guys, to level with you guys, to be super honest about it with you, this investment journey that we're all on, but also it holds me to account and it helps me quietly reflect on my business and the decisions that I've been making, some of them which have gone well and and some of them which which haven't and don't go well. 

So I do enjoy these episodes and I do hope that you found them useful. I hope that you find these kind of honest breakdowns. I just hope you're able to find some resonance, some relevance in there. I also hope it just kind of helps motivate you and keep you moving forwards when I know things can be tough. And it is pretty tough out there at the minute. It's a really, really tricky market for so many reasons. We've got sticky interest rates. We've got stuff going on elsewhere in the world that we have absolutely no control and power over. We've got a property market that is flat, possibly a little bit soft, but there's not tons of stock on the market at the minute. It's really difficult to know whether we should go hard and put our foot down or maybe go slow and be a bit more cautious.

We've got in some parts of the country rent softening a little bit. We've got, and as you're about to find out today, some challenges with tenants and affordability and creeping costs in our rental businesses. We've also had the new legislation, the Renters' Rights Act now come into force and all of this jazz. So yeah, there's a lot going on. So if you have been finding it difficult, if you are struggling to find your way forwards, don't worry. It's totally normal. And I think if you were feeling any different at probably be a bit worried about you. 

Now, today, as always, what I'm gonna do is break down what's been going on in my businesses recently, you know, across the different areas, across my trading businesses, my portfolio, and also the development business as well. And then just share my thoughts on the outlook for the rest of the year. So a few things to kind of bring you up to speed on with today, and in no particular order, but what I'm gonna do is I'm gonna just start with a bit of a portfolio update. Cause this is an easy one for me and generally speaking, most of this has been pretty

Andy Graham (05:13.774)

Pretty positive. So in terms of occupancy, on the most part, certainly in my HMO portfolio completely full, in the buy to let portfolio, which is pretty substantial, we've got a few empty units. Maybe sort of two or three, I would say, probably fairly consistently now over the last six months, have just been vacant at any period. And a lot of this has in honesty just been normal sort of churn, changeover, but it's been a little bit stickier to get some units let. And it's definitely a sign of affordability. That's been tough. Obviously, we're reluctant to reduce prices, but then you've got to be sensitive to the market. But there's also just a lot to do and think about and keeping on top of ads and performance and managers and all of that stuff. It's tricky. So we're not at 100% at the minute. And I don't like that. But also we are at a size where it it's kind of difficult to have 100% occupancy all the time, if I'm really honest. 

Although we do do our best, it's really, really hard. So if that's you, I mean, look, if you've got a small portfolio, just a handful of HMOs, you really should be at full occupancy with the exception of maybe a few days up to a week, maybe between changeovers. I think any more than that is not really excusable. There will be a reason why. I think if you've got a big portfolio operationally, and just in terms of just sheer volume, you are gonna have some units that perform better than others and you're just gonna have some operational drag. So that's definitely where my thoughts are at in terms of that. 

And but you know what? It is actually quite punitive now on the buy to let stuff because margins are pretty squeezed across the board. We're really feeling it and that's frustrating. Fortunately, margins are really good in the HMO portfolio and the rest of my trading business. But yeah, definitely on the buy to let front, as we all know, just the the yields are not the strongest. And it's just really frustrating. Okay.

And it's further frustrated and compounded by other issues, which I'm I'm gonna share with you today. But in terms of my student portfolio and the HMOs, all fully let, all the student stuff's fully secured for the next academic year, which is of course just around the quarter. Now we're three weeks away from the student changeover. All that preparation's been happening. Busiest week of the year for me has been for nearly 10, 12 years now. And we're kind of ready for it. We know what we're doing now. It usually goes pretty well.

Andy Graham (07:36.172)

Now, in terms of rent increases, there's been a lot of talk and chatter about this, especially off the back of the Renters' Rights Act coming in. But I'm gonna be really honest with you. We haven't done anything with this. We did not feel, I mean, the student lets, all that stuff is kind of buttoned up anyway. So there's never really going to be any changes there. But professional lets, I just don't think, on the most part, that affordability is there. And I don't want to give any of my good tenants a reason to have an issue. 

And I think putting rents up at the minute is an issue. It's really tough for everybody at the minute, isn't it? The cost of living crisis that was all over the headlines sort of 18 months ago and we were all sitting around and saying, well, can't really see this. No, we definitely can see it now. We can see it and we can feel it as operators. I just don't think there's much more to squeeze out of anybody. And so we're kind of sitting on our hands. We're sort of waiting just to get a better feel for where things are at later this year, but we haven't done anything about that. I would be really interested in knowing whether anybody else, any of our listeners, have increased their rents off the back of the Renters Rights Act. And I know it's one of those things that has been reported quite widely that landlords have done that. There's a knee jerk to the legislation coming in. But my opinion was that a lot of that was baked in before. We've known about the legislation for ages. And let's not forget that for five or six years we have had substantial rental growth, right? 

In some cases, double digits year on year. And we've taken a lot off the table. And and I think we just have to be pretty reasonable, right? Like it has been pretty good for landlords for the last five or six years. It's not as good now. And I'm not saying that I I'm happy with these changes of legislation. I'm certainly not, but I do think that tenants have taken the brunt of this and I do think we need to be careful about how far we push it. I think we could buy it

Our own nose off to spite our face. I guess that's kind of what I'm saying. So on this point, we haven't done anything with rents, and I think we're gonna wait at least another quarter to just sort of see how the land lays there. Now, in terms of maintenance, it's been pretty good overall. Interestingly, most of the maintenance that we've been doing has been proactive maintenance where we've been aware of changeovers happening, for example, in the student HMOs. But there have been issues in some of the houses where we've had issues with tenants.

Andy Graham (10:03.906)

That is not a coincidence. We're going to come onto that shortly. HMOs, they've continued to perform exactly as intended. Everything is hitting the targets on the spreadsheets. No issues, no occupancy issues, no problems whatsoever there. So kind of a glowing rapport from the HMO portfolio. Very little operational stress coming from the HMO assets at all. Certainly in my business, that just runs like a very, very, very, very lean machine.

I guess if I was just a step back though, my key observations would be that the HMOs in my portfolio feel super stable right now. But the buy to less and that professional market is having a little wobble. Not a big wobble, just a little wobble. And it's not great and it's costing a bit. It's a direct cost, I would say. Now, I'll come on to kind of where I think this is all going and my thoughts about this.

As we progress through today's episode. But that I would say is a key sort of reflection on Q1 and what is most of the way through Q2. Now let me come on to some of the tenant issues that we've been having recently. So I shared this on the last business update I had, but for the first time in a long time, I had to take a tenant all the way through to court. Don't like doing it, and I've almost always found a way to mediate with the tenant before that. And

Very rarely have we had significant issues with tenants when it comes to arrears and repossession. Because we've vetted well, we've been a good landlord on the most part, we've worked with tenants when they have had genuine difficulties. But sometimes, no matter what you can do, it just isn't enough. You cannot reason with unreasonable. So anyway, in this one particular case, took this tenant who is a pretty awful lady all the way through to court.

Got the possession order and got a judgment awarded in the favor of ourselves. A kind of a demand by the courts for this tenant to repay the full balance plus all of the interest that was due. Now, am I likely to ever see that? Almost certainly not. But what's really annoying about this is that this particular tenant didn't turn up to her final court appearance. And the order, the judgment was ordered, and we

Andy Graham (12:25.826)

Therefore, I presented this to the tenant and said, here's the demand, you need to pay your rent now, or we're going to enforce it. We are literally going to send the bailiffs to you. And if you've got a car, they're going to take that. If you've got any personal possessions of value, they're going to take that. And there are other actions that we can take as well. But this tenant applied back to the court and said that she wasn't aware of the hearing, which is kind of crazy because we were sat in the previous hearing where it was all dated and we were all aware.

And anyway, to my utter disbelief, the court has reopened it and there'll be a directions hearing in another month. Which is just utterly ludicrous in my mind and just makes a complete mockery of the whole system. So this will be coming on for an entire year that this is dragging on. And every time, you know, if you haven't done this, just the sheer volume of paperwork and faffing.

It's very, very frustrating and all this legal jargon and stuff that we just don't want to be doing and filling our heads with. So I'm having a bit of a moan, but really I think that there is a point I want to make here. Before I make it, I'm gonna tell you about another one. Same building, coincidentally, but another tenant, in substantial arrears, to the tune of about 7,000 pounds now. So quite quite a substantial amount for one tenant. And this has been accrued over a long period of time. We served notices a long time ago.

And those notices have long since expired. And we've been trying to work with the tenant, trying to find an amicable solution for them to stay a bit longer, to work out alternative accommodation, to put a payment plan in place. So there's always bits and pieces, and then it never quite pans out. And, you know, this week we're almost certainly going to have to just apply to the course for repossession, which is very frustrating. But what's really frustrating about this is in an attempt to frustrate matters to perhaps get us to just relieve the pressure on them, or maybe even just give in altogether. They have put some bonkers dish repair claim in, claiming every item under the sun, literally a 300-page document from a no-win, no-fee solicitor, which is extremely frustrating. Now, it's not frustrating because I'm concerned about any liabilities there, but it is frustrating because it all takes time to deal with somebody.

Andy Graham (14:46.584)

Has got to respond to that. And they've got to respond to it properly. And that isn't a 10-minute job. So, with that, as you can imagine, lots of spurious maintenance requests that we try to check out. They invariably deny access. One or two things can be remediated, but don't really have any bearing on the rest of their arrears situation. But it just makes life very difficult for everybody. And it's another example of these sort of pressures I'm seeing in that professional market at the minute. 

And I don't think it's any coincidence that we're seeing more of that this year than we've seen in previous years. Now it's not totally unique to have issues, of course, with tenants in arrears, but it is pretty unusual in my portfolio. Good quality accommodation, generally with very good quality of tenants. So it is unusual and I don't like it. And the point that I'll now circle back to is that off the back of this legislation, and we've been talking about this for a long time now, we all have to be so careful about making sure that we have the very best tenants in our properties that we possibly can. We run businesses, and at the end of the day, we can, there are certain things that we now can't do. We can't blanket exclude certain types of people on either benefits or with children or things like that. But what we can do, and what we must do is ensure that.

We have good quality tenants, tenants who are likely to be able to stay and pay their rent. Okay. Good jobs. And they have references to back it all up and they have good credit and they have something to lose if they don't pay their rent. I think if we get this wrong, it could be so damaging. It can very quickly destroy real estate businesses. And I am not honestly being what would the word be? I'm not scaremongering here.

This is a genuine problem for a lot of professional landlords. One, two, three tenants who don't pay their rents could be really problematic and difficult, and maybe even make other tenants want to leave and end up with this whole kind of scenario that's very difficult to deal with. That can be so destructive in a business. And it can be now very, very difficult to remove them, even if you do get them out, if you have to go to the courts and it's going to take so much time and it's going to cost you so much money in the process. And if they genuinely don't have

Andy Graham (17:09.464)

The ability to pay that money, you will never get it. You can throw all the money that you like at enforcement, but you'll never get it. So just a reminder: this stuff is happening in my business at the minute, not on a large scale, but it is happening. It's not unique. If you've got a portfolio of the sufficient size, it almost certainly will happen to you at some point. But do make sure that you're prioritizing everything that you can to make sure that you've got the best quality tenants that you can possibly get in your properties. And you then manage them in the best possible way that you can.

So as not to give them any reasons at all as to why they would want to leave. Okay, so a big point I wanted to make there, but also just being very honest about some challenges that we're having in that area of the business. 

Now, this brings me on to something that I've been quietly reflecting on recently. And it is sort of the HMO versus single-let debate. Now, in my head, it's not a binary thing, you know, it's not one or the other, but I've been very happy in recent years to build my professional portfolio based on single lets through the development of multi-unit freehold blocks. But I'm looking ahead and I am wondering whether we need to change that balance again and maybe revert back to some of the higher yielding stuff with a little less focus on the capital creation, the development, the real value add prospect. Of course, we're all looking to do that. We all want to force value out to recycle money through deals.

And it is a really important part of a long-term capital growth strategy, a wealth creation strategy. But I do fear that if we pursue that at the expense of high-yielding assets, which a lot of people will do, it's difficult to find the right sites that you can develop out, find planning gain and development value, and at the end have a high-yielding HMO and get all of your cash back out. I'm not saying they don't exist, but on a large scale, if you want to do deals where you're spending and sort of generating seven figures in deals, that is very difficult. But I suppose my thoughts have reverted back to a little bit more cookie-cutter stuff, do a higher volume of some smaller deals, focus on more of the higher yielding stuff and a little bit less of the just tip the balance back a bit, I guess is where I'm at. And as I look forwards over the next 18 months.

Andy Graham (19:32.34)

Less so over the next six months, the rest of the year, but certainly the next 18 months to sort of three years. I do have some thoughts, and I wouldn't say concerns yet, but some thoughts about what the impact of AI will be and other economic challenges and whether or not we might see something pretty substantial from an employment perspective. If there is a substantial amount of unemployment that is going to hit the real estate, the rental market pretty hard. And I think that that higher yielding asset is is gonna perform better, especially where we've got that those multiple sort of revenue streams from that single asset, as opposed to maybe just that one tenant paying rent in a single let. 

So just some thoughts, it's reflections on some of the challenges that we've been having. There's more to it than that. Obviously, the risk in the development space at the minute is pretty high. Values at the back end are little bit soft. Development and finance costs are pretty high.

Build costs, they're obviously high at the minute. There's just a lot of risk. Probably, if I'm honest, a bit too much risk. You've got to have some pretty big balls at the minute to be developing. And it's very hard to develop land out. You need to be quite literally stealing land if you want to build land out at the minute. So just some thoughts and reflections on what's been going on in my business at the minute and how I'm thinking about possibly just reshaping the balance of my activity over the next six months to sort of two and a half, three years. More to come on that.

I'll reflect later in the year again in my next business update. Just zooming out a little bit then on the rest of my business, the trading business and overall kind of performance. And I suppose it included under that umbrella is our operational performance. Obviously, there's costs to our operational performance. We're pacing at about 15% up year on year, which I am really, really, really, really, really pleased about. We're not a tech business. We are not sort of growing 50% year on year.

15% year on year is pretty incredible. And it's for a few reasons. One, it's because we have on the whole had very stable and very predictable income. And obviously we're coming off the back of last year's rent rises and we've pretty fixed on lots of mortgages. But also because we've been able to force some of our operational costs down. We've been using a lot of AI. It's cut out a lot of the stuff that we were previously spending money on. We've been able to get rid of a lot of other subscriptions. We've been able to reduce some

Andy Graham (21:56.778)

Overheads in terms of people, if I'm honest. We've actually been able to cut back on hirings and sort of self-employed and contracted work that we use within the business. We've also, as an entire team, just been able to do more with our own time because we've been far more efficient and we've been able to get better and more accurate results. And a big part of that, of course, is AI. So I'm really excited about that. It's really interesting, the whole concept and how far can all of this go. But we're definitely seeing now some of the results of that directly onto the PL at the end of every single month. It's taken a bit of time to get this through. 

And if I'm honest, a big focus of mine is looking for more there. And I think there is more. I think there's another sort of five or ten percent at least on operational improvements and efficiencies that we can find using AI. And I don't quite know what they are yet. I just feel like they're there somewhere for us to discover and start using and trialing. And I'm going to keep talking to you about this. And at some point in the near future, I'm planning to come back and record an episode on AI and how we're using it in our businesses and give you some ideas that you may already be using, but some that perhaps you're you're not. 

Really pleased across the board though, we have had our strongest year in terms of memberships at the roadmap. My consultancy clients are getting better results than ever before. I think I'm enjoying running that business. In fact, I think I'm enjoying running all of the businesses more than I ever have before. And one of the things I've been able to do recently is go away on holiday. We went over to Majorca for a couple of weeks and it's been fantastic. I did so little work and being able to do that and spend time with my daughter and let Gem have real quality time off and not have to be stuck to my laptop or picking the phone up. It's magic. This for me is the point of everything.

Finding time to exercise and do all of that stuff. I feel like I'm not having to compromise on any of that stuff really at the minute, which is great and hasn't been easy over the years. If you're a long-term listener to the show, you'll know at times it has been really, really difficult. It's been, you know, really, really high pressure. And I'm enjoying it more at the minute, which is great. And that's what I wanted to do. That's the point of building all of this business for me. That's why I've done it. So, how do I feel about the market? What am I seeing at the minute?

Andy Graham (24:15.8)

First of all, as we know, inflation is starting to come back down a little bit again. Interest rates have obviously stuck. I'm really, really hopeful that we will see those interest rates start to come down again soon. Clearly, that rate of reduction is not going to be as fast as we had hoped coming into 2026. I locked into some really, really good mortgages earlier in the year before everything kicked off in the Middle East. Wouldn't it be great to get back to that sort of a place?

I'm hopeful that that will be the case this year, but I'm not overly optimistic about that. So I think rates are staying high. I'm gonna be materially impacted by that. We've got another refinance coming up, about four, four and a half million quids worth of stuff. And it's gonna be at rates that are higher than I had hoped that they would be. And clearly that's gonna cost a few quid. So we'll have to wait and see. Now, the sales market or the values market, the property market in general is just a bit subdued, isn't it?

Values are a little bit flat. There's not any real growth then that we're seeing anywhere, and the sales market is soft. We've actually got some units that we will need to sell later this year ourselves. Can I see the sales market recovering over the next three or four months? Probably not, if I'm honest. So we'll just have to work with what we can there. Interestingly, while I was away recently, we did agree the sale of a building and a piece of land that we own, that we've got planning on, that we were going to develop out, that was still a profitable scheme.

But was just going to leave too much capital tied into the deal at the end that we didn't think was the best sort of use of funds for us as a business. So instead we decided to crystallize the site and just shift it on. And we got that all tied up. So that's just going through at the minute. Interestingly, it's not even going to a developer though, which kind of makes sense. It's going to a business who's just going to reoccupy the building and may potentially do something with the planning in the future. So an interesting

I guess that is a little pivot for us, okay? We wanted to develop that site out and market changed a little bit, costs went up. We could have crystallized all of the gain in that site had we have been able to sell it. But again, because values are a bit soft and the sales markets are a bit soft, we didn't feel confident that we could build that site out and sell all of those units. We're not really geared up as a team to do that. That's not who we are. We're a build to rent operate and not a build to sell. So we just thought, you know what, let's just let someone else take this on. Now

Andy Graham (26:42.178)

The new regulations come in. The political environment is very, very challenging at the minute. It's anybody's guess as to what could happen on a day-to-day basis at the minute. Things perhaps look a little bit more stable, but they don't look great. They still don't look good, do they? Across the board. Keir Starmer, I think he's on a knife edge. We've got still sort of issues in the Middle East. And Trump is doing Trump's thing. So it's really, really tricky. But I think if you you had to sort of summarize it in one word, it would just be uncertain. And all of that uncertainty is trickling through and it's having an impact on all of this stuff. So nothing is really happening. 

Now, I can't see anything exciting happening in the property market for the rest of the year. I think it's unlikely that we're going to see properties suddenly start to values rather start to pick up. I think it's unlikely that we're going to start to see rates fall rapidly. And I think it's unlikely that we're going to see massive amounts of stock just come to the market. So I do think we're in for a just more of what we've got going on now. But I do think that this is a fantastic buying opportunity. If you can afford to buy and if you can afford to hold, I think that this does look like an incredible buying opportunity. 

At some point, some of this pressure will come out of the market. There might be more pressure yet. So I'm not suggesting we're at the dip. I certainly don't think we're at the tip of anything, but I do think that at some point, if you're able to buy and hold, this will in retrospect look like a good time to have bought. So think about that, but perhaps combine that with some of my thoughts about higher yielding versus maybe trying to force capital out. I think chasing that dragon in the form of trying to recycle all your money versus just doing some really good deals where the cash flow is really good and just giving your deals a little bit more time to mature organically, I think that that is probably a better strategy right now. Of course, if you can find stuff where you can do all of that, fantastic. But just buying just to create development value and hold on lower yielding stuff, I think that's pretty sort of dicey, dicey ground to be walking over.

Andy Graham (28:57.494)

So, where am I at the minute? Well, first of all, I'm not preparing for a downturn. I'm also not preparing for anything to just rocket upwards. I think I'm just trying to take advantage of good opportunities. I think I am looking to be opportunistic for the rest of the year. I'm looking for ways to keep driving costs down. I think that there is an advantage to be had as a competitor at the minute if you can get there before somebody else and operate with better efficiencies and at better costs. I think that is a huge opportunity in the market.

And not everybody will get there ultimately, not every business. And I think that there is also still a lot of capital looking to be deployed in the market. So I think interestingly, this is a great time to be getting your hands on money from private finances. Certainly the banks and the specialist lenders want to lend and put that to good use in good deals. Use your skills and your knowledge and your contacts to be doing really good deals. I do think this is a great time to be doing that, but perhaps just expect that the numbers at the back won't look like the best numbers that you've ever seen because you haven't got that same degree of confidence yet. 

But remember the spreadsheet just tells you about the story today. It tells you what that picture looks like today. It doesn't necessarily tell you what that performance will look like in three years or five years or ten years. So when you are stress testing deals, just have a play around, see what that deal might look like in a couple of years. If the capital value does maybe appreciate by a couple of percent a year, something modest, maybe if rents do appreciate just a touch, maybe modestly at a couple of percent a year. 

If your interest rate comes down by maybe one, one and a half points, just see what that deal looks like. And you'll find that that deal starts to look much better very, very quickly. But you've got to be prepared to give it that time. If you want to see all of your results within nine months, within 12 months, you will have to kind of prepare for some slightly lower performance economics. But that's okay, guys. That is perfectly fair. Fine. It doesn't have to look like the best deal on the world on paper today. 

Now, before I wrap up today, there's just one other challenge that I wanted to share with you guys. It hasn't happened to me before. I have had challenges with contractors, but I've never had a contractor go into liquidation and really have to figure out how to keep the project running and find an alternative contractor mid-project. This happened to us earlier in the year on a big project.

Andy Graham (31:25.726)

And it has honestly been really, really challenging for a number of reasons. First of all, it's very challenging trying to manage the subcontractors on a site like that, where the main contractor effectively just walks away. Lots of relationships, lots of heated discussions. And I have to, without pause, credit my business partner in managing this so incredibly well. I haven't actually been the coalface there with that. And he has and he is absolutely the person to do that and and has absolutely done the best possible job I could imagine anyone ever doing with that. But it's a very difficult task nonetheless. Then it comes all of the cash considerations and figuring out what you've spent, what you've got left to spend, and how you budget that. And then of course thinking about how you keep the project moving and who you employ to do that. 

Is it the contractors or the subcontractors that have been working under the main contractor, is it new subcontracting outfits and a really complicated picture? And then the sequencing of everything on a big site in a big project, it's a huge, huge task. And operationally, it's a real drain. And that's something that we as a company have been dealing with. What I would say, credit to ourselves, is that as a team, as an outfit, it's something that I feel like we have been able to do really well. We haven't panicked.

We aren't in a position where we're concerned about costs. It might take a bit longer to finish the project. But because we've run it so well to date, it does mean whilst this is a problem, we're going to be able to continue running it well to the finish. And it has moved forward. And within honestly a week of that project shutting down temporarily, it was back up and running, possibly at a slightly slower pace than we would have otherwise hoped, but it's picking up pace now. So that's been going on alongside everything else.

And like look, hey, I'm not really in a position to sort of yet tell you how to deal with this sort of a thing because we haven't come out the other end of it. But what I can tell you is that it's been going on, we've been dealing with it, and it's a challenge. And these are the sorts of challenges as investors and business owners in the real estate space that we kind of need to be able to contend with. This is absolutely why you've got to make sure that you have all of your paperwork in place and it's the right paperwork that you do.

Andy Graham (33:44.596)

know how to administer contracts and you do have the right people around you and you do know now how to manage relationships in tricky circumstances and you are managing budgets effectively and all of that jazz. So later in the year I'll probably be able to give you a better debrief of that and what we did and how it all went. But at the minute, just wanted to make you aware that that is a challenge we've been dealing with and we're still working through it and it has been a bit of a strain. 

So that is about it for today. I think I've probably brought you up to speed on pretty much everything. If I was to step back and just take a minute to summarize, occupancy in the HMOs is fantastic, performance is fantastic. Operations across the board are pretty good and we're lower on costs. Occupancy and voids are up a little bit in the professional units. And the challenges that we're having with those tenants are also creating some operational drag.

And I think that that is a quite a telling story. And it's starting to reshape the way I'm thinking about my investment plan for the next six months to sort of three years. Overall, the businesses are up 15% year on year. So hopefully we can at least continue that and maybe improve on it marginally to the rest of the year. I'm really enjoying stuff. I've got the time to do the things that I really want to do, my priorities, which is the most important thing. And I'm enjoying running the businesses at the minute. I see some fantastic opportunities.

Ahead in terms of raising capital and deploying it in really good deals. But I also think that we've got to accept some slightly softer returns, and that's okay. But I think if you can afford to buy and hold, this is a superb time to be in the market. I think that this is a time to be making sure that you are confident about your knowledge, you've got the right contacts at hand. And if you've got any gaps in your experience, you go and get them filled by either learning with somebody or learning from somebody. 

This is a time to accelerate your ability to actually get into the market and deploy funds into the market. So hopefully that just gives you, I suppose, that sense that I am actually feeling positive about stuff, despite some of the challenges at the minute, perhaps a contrarian view. Definitely if you read the headlines at the minute, it would be a contrarian view as a landlord, as an investor. They are all over it in terms of the

Andy Graham (36:05.386)

It's all kind of the buy-to-let landlord kind of thing is all dead. And yet the legislation has made it much more difficult. But if you're not prepared to see this through for a long time, real estate is not the right place for you to be. If you want shorter returns and with different risk profiles, this is not the market the space to be in. But if you believe in real estate, if you still fundamentally believe that because we're an island and we don't have enough housing and the quality of housing isn't good enough and that we will ultimately get there, there is a great opportunity. And I for one, I'm still chasing that dragon. 

That's about it for today's episode, guys. Thank you as always for tuning in. I hope it has been helpful. I hope these episodes do help you just relate. I hope it does give you that confidence. If you are finding it challenging and difficult at all yourself, I know it can be really, really tough. I hope there are some inspiring ideas in there somewhere. I hope it's given you a few things to think differently about. But most importantly, I hope I've just made you think and I hope it's left you feeling a little bit.

Better about whatever it is that you're doing and potentially struggling with right now. If you've got any questions about anything that we've discussed in today's episode, head on over to the HMO community. That is, of course, our free group in Facebook. If you haven't joined, come and check it out. Over 10,000 of us investing in HMOs. It is a powerhouse of information. Some really, really incredible conversations happening on a regular basis. Come and ask your questions. If you've got advice to share, please do. It's just a great place to network. You might find investors in there.

And you'll certainly find a lot of people that you can learn from. If you do want to accelerate your learning, head to thehmoroadmap.co.uk now. Go and get signed up as a member and take advantage of everything that we've got inside. We have literally got over 400 resources in the forms of video lessons, downloadable templates, case studies, and a whole lot more for you to take advantage of. And it'll cost you less than the price of a cup of coffee every single day. And if you want to put things on steroids this year, then just head to the show notes. There's a link there at the top of the link and you can watch a video. And that link and that video will tell you a little bit more about what working with me is like. If you want to come and work with me, if you want me in your business, you can just find out a little bit more about what that looks like and whether or not I can help you. And if it's something that you think would fit, you can put yourself a free strategy call and we can jump on a call and we can have a chat about it. And if I can help, great. If I can't, no worries, I'll be able to probably give you some advice and you can go on your own way.

Andy Graham (38:31.202)

So that's in the show notes, and you can go and check that out now and book your call in. That's it, guys. Thank you for tuning in. And don't forget that I'll be right back here in the very same place next week. So please join me then for another instalment of the HMO podcast.