Week 5: Part 1: The Set Up
I cannot believe it’s February and the first month is already over! I can’t afford to run behind this early on. A quick recap on last month where I discussed my plan, unforeseen problems, along with problematic thoughts. This month I have decided to write about the more practical side and the all important set up of a business. I wanted to mention this quite early on so one can see the entire process of this Rent-to Rent journey. Admittedly, what I am about to mention had already commenced during Autumn last year (1st Sep/ish-end of Xmas) thus, to give you an indication of time scales. Ideally I wanted to complete this section in a month however, It took me 4….hahaha. There is quite a lot to get through so I will upload it as a two part series. If I put it under one document its well over 3000 words and you really don’t want to read all that do you?...thought not.
The Back-Office
I knew I wanted independence, I knew I didn’t want to work for someone else. Been there done that but the transition from employee to business owner, just how do I get there?? Like everyone else I too had butterfly moments but at the same time a burning desire to go for it. After all, you will be trading in the comfy blanket of a somewhat secure job for uncertainty, unpredictability or dare I say: failure! But, being cash poor and ambition rich.....you guessed it I went for the latter. So now it was decision time, sole-trader, company or partnership. I decided from my re-cap on these structures that a company format will suit me best. As I didn’t want to go small, I wanted big and I wanted great. If I wanted to be taken seriously then I would have to spend the £££ and set up a legal structure. Sure, there was some people doing this as a side hustle, not putting in a single dime but I wanted this to be real more for myself than anyone else. This way I couldn’t bail out, I couldn’t say tomorrow or later.
You see, entrepreneurship isn't natural to me as one might like. I’m lazy, lack patients and own the pessimist title!..... haha. You see, no entrepreneurial traits whatsoever. This is why I had to set the scene right from the very start. Moving forward I would now need a name for this sweet venture. Once this was decided I had to make sure that it was available. A quick search on the company’s house revealed that the name was available, some similar but nevertheless available. Next step registration. The company’s house charge was roughly £110 and took as little as 40 minutes to complete, can you believe it? All that fuss on should I? should I not? Two days on and a certificate in the post reading: Opulent Property Investors; incorporated 19th August 2019. Something emotional on holding that piece of paper in your hand. Slowly but surely that dream is now written and becoming a reality.
The boring bit
The reason sometimes why I didn’t like to get out of bed. Compliance, yep it’s just gotta be done i’m afraid, one of those things. If you are thinking of walking the same walk then I will try and make it as painless as possible for you. I recommend the book: Property Sourcing Compliance by Tina Walsh an ex copper. I know nothing about compliance but I knew enough to take all the steps necessary as any omissions on my part could lead to major fines or even a stint in prison. Also, I wanted safety for all those concerned who may come into contact with my business in some shape or form such as a tenant or an investor. I wanted to adhere to good practices and principles because it mattered to me. Because a property investor does not fit into a typical box its work is regarded similar to that of an Estate Agent/Realtor although there is a major flaw in this kind of grouping both are very different in their own right. As a result, I needed to be governed by an authority figure. In my case I registered with the Property Redress Scheme (PRS) there was a choice of The Property Ombudsman and can’t remember the other one.
Anyway, I found the PRS a smooth process to join. If there is any complaints in the future at least i’m covered, but did set me back £250. This is the bare minimum formal membership required to go official. Also, if you were holding any client data even as small as emails then you will have to satisfy the GDR policy of safeguarding sensitive information. Honestly, I get that its important and people want to feel protected but seriously will you feel violated because someone has your email??......oh please get a life! Anyway law is law who am I to argue, The next payment is for the Information Commissioner's Office (ICO). One swipe of £40 and that was me done for the year. Okay next, I wasn’t lying when I said this stuff is boooooring! The Residential Landlords Association (RLA) was the next stop costing me £79, a mid-range package for the year ahead. What does this cover, well it has all the updates, legislation, articles and contracts. Everything under one roof, I wasn’t kidding when I told you I was lazy, wanted to take all precaution ready for the big bang should it ever occur!
There is a famous saying in business; Location, Location, Location. But, that will be the least of your worry as what will be more prevalent especially in the early stages is Expense, Expense, Expense and this train was not about to stop! Next email, I could suppose use my existing one not faff around but how will that look? With a name like Opulent which is all things grand and yet one is contemplating if a business email is required?? Well I answered my own question. I didn’t want to go for Opulent@gmail.com just seeing that was grim then how an earth will prospecting clients feel?? I dread to think. So it was; name@opulentpi.co.uk . This domain was £6 one off for the year then £3.50 per name so depending on your team it could be as little as the above and beyond with each new member of the family. If you want to be taken seriously then don’t cut corners. Do yourself a favour and invest a small fortune into setting these up right. It was a no brainer for me. I was after a brand and not just a job. More on this next week.