A Scots letting firm is giving its staff the ultimate incentive to build for their future success – by helping them to buy their own property portfolio.
Umega Lettings has conceived a plan to use the profits from the business to invest in a staff property fund which will be used to buy flats, with each employee owning a share in every property that is subsequently bought and let.
The company aims to buy at least two properties each year – with the aim for the staff to own a large portfolio of homes in less than 10 years.
Neil McInnes, Director with Edinburgh-based Umega Lettings, said he believes this is the first time a scheme of this nature had been set up by a business in Scotland.
He said: “At Umega Lettings, we understand the value of home ownership and the investment value of property in Edinburgh at this particular time, so it was an easy decision to develop a staff incentive scheme.
“This fund rewards our staff for their hard work – with no impact on their salaries or pensions – and they have an appreciating asset as their shares grow in value.
“It means the prospect of building a property portfolio for them is not simply a dream but a reality.
“We believe this will attract and keep the best lettings team out there. Likewise, it will get our team thinking like landlords as they will now be landlords themselves – and that can only be good for the level of service we give our customers.”
Neil added, “Our company ethos is one of transparency, education and providing a financial stake. This means each member of our staff has a full understanding of our health as a business, knows our incoming finances and our outgoings.
“They learn more about the operation of lettings from a business perspective, in a way that other firms would perhaps keep behind the scenes. We believe that to be truly successful and continue the success we’ve had, such as signing up 50 new landlords in August, that staff should be incentivised beyond simply doing a job and earning a wage.”
This fund will work by establishing a new company – with staff owning half of it – which will use 20% of the business’s profits to invest in property. The first property is expected to be purchased in March 2017 with a new property being bought every six to ten months.
Staff will be awarded shares each year in the property fund, as long as they have a minimum of 12 months employment and not be working their notice period. They cannot sell these shares for five years after they are issued – once they wish to sell, these will be worth a percentage of the value of the property portfolio, dependent on the share owned.
David Marshall of Warners Solicitors & Estate Agents said that with some properties in Edinburgh selling within two weeks, the incentive for staff to build a large residential property portfolio is a sensible way to ensure company success, staff growth and loyalty.
He said, “The property market has been buoyant for investors over the last two or three years thanks to a combination of strong rental yields, capital growth and low interest rates. The new fund from Umega Lettings is a fantastic, innovative way of allowing staff to benefit from the buoyancy of the market while helping to nurture a real passion for property and knowledge of the industry among their staff.
“It’s great to see a successful local business showing confidence in the market and rewarding staff at the same time, and the scheme has the potential to offer fantastic returns for everyone at Umega.”
