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Considering property rental: Income generator or risky venture?

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Chief executive of Young Lancashire, Graham Whalley on using Big Assist vouchers to consider commercial property rental and how the organisation re-evaluated its social impact.

Background

Young Lancashire is a registered charity, established in 1923 for local voluntary organisations working with children, young people and families.

We work in partnership with ONE Lancashire to provide support services to our members, including the latest news, regular e-bulletins, information and advice, events and specialist support products.

The issues we faced

We were intent upon an investment proposition that involved owning a building we could occupy ourselves and use for commercial letting purposes. 

The actions we took

We applied for Big Assist vouchers to undertake a programme of change and transformation that included a feasibility study on generating income through the commercial property rental market.

We secured additional support through Big Potential to thoroughly explore the proposition of owning, occupying and renting a building.

We sold our property and moved into temporary rental accommodation to study the prospect more closely.

The board ran three workshops in advance of a staff away day at which ideas were discussed and a plan was developed for the next 12 months.

Positive outcomes

Currently the ideas under discussion are directly focused on work with young people, specifically around strengthening the Voice and Influence standards produced by Barnsley MBC Children and Young People's Service, and also promoting young people’s involvement – young people as ambassadors, inspectors and champions.

Additionally we looked at new forms of volunteering and social action such as micro volunteering and speed volunteering; online activities completed in a few hours which volunteers dip in and out of depending on their availability, without having to make a long-term commitment. For more information read this Guardian report.  

Presenting attractive volunteering opportunities to younger people is the basis of such ideas. Young people in Lancashire expressed their needs through the national Make Your Mark campaign. Top on the agenda were jobs, a living wage and improved mental wellbeing and resilience.

We envision that this could lead ultimately to the formation of a young people’s co-operative (a ‘bencom’ – or society for the benefit of the community) with the potential for a community share issue

Negative outcomes

We came to the conclusion that property rental as an income generator can have significant commercial risks such as under-occupancy, a rapid turnover of  tenants or ‘churn', and competition from rival facilities.

It also holds the threat of serious mission drift for the charity. We have therefore decided to form an investment proposition that better balances commercial and social objectives. 

Lessons learnt

Although we remain committed to social investment growth, we have changed tack on how to achieve this.

The process has caused the charity to re-evaluate its core purpose, including the social impact that we deliver as a VCSE youth infrastructure agency, and has made us more aware of the significantly challenging environment in which we are operating. 

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Page last edited Jul 10, 2017

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