For any new property that I buy and renovate, I will always make it compliant with any current regulations for that property type in that location. If I am unfamiliar with the location, I will contact the council and ask about minimum requirements. This way, there will be no ambiguity when I come to resell or let the property.
I will do this regardless of whether my intention is to use the property as a House In Multiple Occupation (HMO) or not. For example, I will aim to do the following works as a minimum during any property renovation:
• Install interconnected smoke alarms and heat detectors.
• Install fire doors to kitchens and bedrooms.
• Have the electrical installation checked and upgraded to current standards.
• Ensure gas fittings and appliance meet current safety standards.
This will save me time and money at a later date, especially if I decide to use the property as a HMO.
For any business, ‘Cashflow is King’. Whenever I buy property, I always invest for cashflow. There’s little point in buying a property in a great area for a lot of money, if you’re not making positive cashflow from day 1. Learning how to better manage cashflow can make the difference between your success and failure in business.
It doesn’t matter if you think that your favoured location will generate great capital growth. The question you need to answer is whether you will be able to sustain that capital growth on negative rental returns.
HMOs are a great way to obtain substantial cash flow from your properties. It is not uncommon to achieve up to 300% returns over and beyond single occupancy rentals in high demand locations all over the UK.
Since HMOs provide much needed affordable housing, particularly for younger people, there is a strong market for such accommodation.
A HMO property will not only give you additional cash flow, but you will also benefit from the usual advantages of owning property. For example, you will have good capital growth depending on location and market conditions. Furthermore, it is not always necessary to fill all the rooms to service any finance payments.
If you plan your property purchase carefully, you will be able to grow your portfolio quickly and with minimum effort. By applying some basic rules and understanding current market conditions, investing in property should provide you and your future generations an income for life.
A little bit of knowledge goes a long way:
http://www.hmopropertyriches.com/
