Because generating massive cashflow from property is actually pretty EASY to do. But what most people don’t realise is that the key to your property business success (as with most things in life) is to follow a PROVEN SYSTEM.
So here’s why I’m writing to you today…
My good friend Matthew Moody has decided to SHARE his “HMO Secrets System” to just 100 lucky investors in a one-day event. Matthew has been operating in the HMO (house of multiple occupancy) market for over 6 years and what he doesn’t know about HMO’s isn’t worth knowing. He’ll be sharing with you the exact 7-Step plan that his business uses to source, identify, prepare, market and manage their HMO’s.
If you want to learn how to generate up to £1,000 additional cashflow per property you need to book your place today:
HMO’s are probably the TRICKIEST and most DIFFICULT form of property investment to get right when it comes to generating cashflow; in fact most people who use them are completely INEXPERIENCED.
I’ll also be at the workshop to answer any questions you may have so be sure to book your place today.
There are several factors which need to be considered when buying property. We will discuss just a few of the more commonly overlooked ones here today.
Direction of back garden
Firstly, especially important for owner occupiers is the direction of the back garden. Properties with south facing gardens tend to fetch more than properties with gardens facing other directions. This is true even in today’s market. You should also bear this in mind when buying direct from motivated sellers and factor this into the price you are prepared to pay for your property, as the resale value of the property may be higher than similar houses on the opposite side of the road.
Always consider a property with a garden if you are letting to a family. Conversely, single professional working tenants don’t always require a garden, and if they do, it would have to be a low maintenance one.
Parking
Another often overlooked factor is that of off street and/or allocated parking. If you are buying the property to rent out to couples with young children, this could be the deciding factor for them. Parking may not be so important for young professionals in large cities where public transport is good.
Even better, a property with a garage is always more sought after than one without, again especially true in large cities where parking can be expensive.
Room size
Today, tenants almost always prefer double rooms especially if it is being let as a HMO. if your property is let as a HMO and does have double rooms, don’t make the mistake of furnishing double bedrooms with single beds as this is almost as bad as having a single room and could greatly affect your chances of letting your property. Another must for HMO properties is to ensure that all rooms are of roughly an equal size. This is important if you are renting to a group of students for example, as i have often had some of my properties rejected on the basis that all bedrooms weren’t the same size!
Prior to buying any property, you need to ask yourself, why am I buying this house? Map out a plan of your requirements. Consider the amount of space you will need in the property. If it is your intention to let the property, consider the number of bedrooms to bathrooms ratio. This ratio has to meet current guidelines for the style and size of the property in any one location.
If buying through an estate agent, always explain to your estate agent your exact requirements so that you are not wasting time by visiting properties that you have no intention of buying.
If you are new to investing, try not to visit more than 10 properties a day as you can easily forget what you have seen. Take a digital camera with you on viewings to act as an aid memoir when you get back home to analyse the deals further. Always take copious notes of unusual features and make a note of colours and design elements. Immediately after leaving the location rate the property according to criteria you set for yourself on a scale of 1 to 10.
Surrounding areas
A large majority of people are completely put off by vandalism and graffiti. There is an old saying that you cannot put a diamond on a piece of brass and expect it to look like gold. No matter how nice your property, if the surrounding area is a turn off, your tenants will also not want to live there.
Finally, many people never want to buy property on a main road. Consider the disadvantages of additional noise and pulling in and out of a main road in rush hour traffic before you make your purchase decision. However, having said this, you can often pickup larger properties with bigger gardens on main roads for less than you would on say a cul de sac. So, always weigh up the pros and cons before making your final decision.
Since Houses in Multiple Occupation (HMOs) provide much needed affordable housing, particularly for younger people, there is a strong market for such accommodation. I can only see this market growing further.
As property prices increase, first time buyers are also getting older. 5 years ago, it was common for a sub-30 year old to purchase a property. However, because of the current house price/income ratio, it’s uncommon for anyone below the age of 30 to be able to afford a decent property without raising a huge deposit.
Therefore, people are ‘forced’ to rent. Those that can afford to, will rent out a single bedroom flat. Otherwise, it is more common for groups of friends to live together in 2+ bedroom houses and flats.
A tenant will often think to himself, why pay £700 per month on a mortgage when you can rent a single room from £200 per month depending on where you live. This has created a huge demand for HMO landlords who need to fill rooms in their multi-let properties.
The type of people that would want to live in such accommodation include, but are not limited to:
In fact anyone, who enjoys living with other people. I get several calls a day from the above types of potential tenant looking for individual rooms to let in a property.
So if you are looking to purchase an investment property to let out to sharers it may be worthwhile to determine where these sorts of people would like to live. Once you have shortlisted several such areas, you can focus your efforts accordingly.
A House in Multiple Occupation (HMO) is a property that has been let out to sharers rather than a single family unit. These sharers can be anyone from students to professional employed people.
I am often asked by would be and established property investors, why I invest in HMOs.
My answer is simple: CASH. By letting your house to sharers you can receive up to 300% of the income that you would otherwise get. However, it is more common to achieve on average 100% additional cash flow.
With this additional cashflow, you can invest in further property acquisitions or go on that much needed holiday!
The reasons I love HMOs so much are because:
1. I get immediate and greater cashflow than I would not normally get from a single-let unit.
2. I still get the long term capital growth.
3. I do not need to fill all rooms to get a return on my investment!
In my opinion, the enhanced cashflow outweighs any disadvantages such as possibly higher maintenance costs. Once you have your system in place to deal with HMOs, the disadvantages will feel like nothing, and you’ll wonder why you never considered multi-lets before.
If you are still uncertain about HMO properties, I would suggest you sit down and do a quick calculation.
A 3 bedroom house with a downstairs lounge, that would normally rent to a family for £600 per month could bring in £1,040 pcm if you were to rent each of the 4 rooms out at £60 per week; that’s an additional £440 pcm, ie. an extra £5,280 per year!
You only need to do this a few times before you start seeing amazing returns on your investment.
So next time you’re looking for an investment property, you should definitely consider converting it to HMO use. Try doing it for just one property – make it work for you and then replicate your successes.
Once you have developed a system to manage your HMO properties, you will find it’s no more work than managing a portfolio of single-let properties.
The location of your buy to let property is one of the most important variables you need to consider when looking for your first investment property.
Getting the location right will mean a steady flow of good rent paying tenants.
However, if you make a mistake with the location you could be faced with long voids, damaged properties, and disruptive and possibly even dangerous tenants.
One of the first things you need to do before buying your property is to gauge whether there is a market for your choice of property in your location. NEVER buy in an area where there is little or no perceived demand.
Whether you are investing in HMOs (Houses in Multiple Occupation) or single family properties, I find that if your location is good, you will always exceed your expectations when it comes to finding good reliable tenants.
In the past 10 years, I have found that the market for sharers has increased significantly especially in sought-after cities with good work opportunities and transport links.
I find the following types of people wishing to share with others:
I get several calls a day from the above types of potential tenant looking for individual rooms to let in a property. The same is true for young families who cannot yet afford to buy their first home and are looking to rent smaller 2 to 3 bedroom houses.
So how can you guarantee that you will easily let your property once you have completed on the purchase?
Advertise
If I am unfamiliar with the location of my anticipated purchase, I will normally place an advert in the local paper advertising for my particular tenant type. For example, if I am looking for professional sharers, I will state so. Conversely, if I am looking for a family, I will indicate this in my advert.
I normally place adverts for a minimum of 4 weeks. If I receive just a couple of calls in the 4 weeks, I will most likely not invest in that area. However, if I receive 10s of calls for my proposed property, there is a greater chance of me buying in that location.
When answering calls from tenants, I will always ask them questions to help me complete my market research. For example, I will ask them specifically what they are looking for. Which particular areas and streets are they interested in and why? What size of house would they prefer to live in? In the case of sharers, how many people are they happy to share with etc?
Getting these types of questions answered by my potential tenants is valuable in my search for the ideal property in the ideal location.
If I am looking specifically for a student tenant, I will visit the local university and not rely purely on advertising.
I will:
• Visit the University Accommodation Office and ask them what the best locations for student properties are. Always buy in these locations even if they are more expensive than others further down the road.
The university is very knowledgeable on their local areas and if they don’t like any particular location, be sure that every single student on campus will know about it!
• Try not to buy my student property in a location greater than a 20 minute walk from campus.
Students have become lazier and more demanding over the years. They prefer to hop out of bed at 8.55am for a 9am lecture.
