Are HMO properties or multi let houses worth investing in asks of Letting Focus
I spent all of last weekend at the Property Investor Show in London, which has great fun and very interesting.
It was pleasing that record numbers of people came to hear me speak at the show and my own private seminar last night was well attended too.
These events all require (and then generate) a lot of work for me but they are fun to do - and it is nice to help people and meet bright clued up investors – which I’m pleased to say is the kind of people we always seem to attract.
And I also always learn a thing or two from the other speakers and from people who come to the stand and the seminars.
Anyway, today is a beautiful day and it is nice to be back and “ready to roll” at my own property investments.
Expanding my portfolio of properties and managing those that I have already got probably takes up 80% - 85% of my time with my speaking and consulting work, (including talking to journos), accounts only accounting for 15- 20%.
But in the run up to the two big property shows in London and the ones in Manchester and Brum, there is always a lot of work to do, which means my own work as a landlord investor has to take a back seat for a few weeks.
So, it is really good to back in the saddle and looking to buy more property for myself.
Unfortunately, the opportunities now being presented to me as an investor as a result of the falling property market has meant that my own seminars and networking evenings will now only take place just twice a year.
DO get in touch if you want to arrange a private one to one consulting session. I enjoy doing them and can always fit them in.
Anyway, I’m sure you would rather speak to someone whose primary business is actually BEING A PROPERTY INVESTOR rather than someone whose main source of business is from property education.
After all, anyone in search of education about property investment should validly ask the presenter, “If you are such a good investor then why do you spend all your time running these seminars.”
A fair question, I think!
For me the answer is that I actually get a bit bored of landlord work so from time to time, meeting people and networking is always good fun. It is just that right now I can’t afford to do too much of it.
The current property market is really exciting for me as I have not bought in the capital for 5 years (as prices have been too high) but there are signs that property is becoming more sensibly priced. So, I fully expect to make a few additions to my portfolio in 2009.
HOUSES IN MULTIPLE OCCUPATION or HMOs
One thing you get from going to the property shows is a shift in mood and emphasis on certain sorts of investments. (It’s a shame that few property journalists bother to leave their desks and go as they would be better informed for the experience if they did.)
At the show last weekend I detected an increasing number of people asking me about HMOs or Houses in Multiple Occupation
One or two new players are now on the scene advocating that you invest in these shared houses – hence the interest, I guess.
What do I think?
Well, it all depends.
A House in Multiple Occupation can certainly be a good investment and they can outperform more standard lets. There are areas where you can get a higher net rent by renting out each room separately (or you could of course put all the tenants on one agreement.)
But there are downsides, which as someone who has ran an HMO over many years, I feel well qualified to highlight. These are:
First, the management of a large shared house is without doubt more demanding for a number of reasons, principally because turnover of tenants will be higher. One eternal problem is that you will always struggle to know who is actually living in your property.
Second, there are quite a few rules and regulations to cope with and getting a licence (if that applies in your area or if the property is more than 2 storeys and 5 or more tenants) can be very expensive.
Third, mortgage finance will be more costly and harder to obtain.
Fourth, your wear and tear costs will be higher than under a standard let.
Fifth, many letting agents are not interested in letting individual rooms (if that is the way you want to manage it) so you may have to do this on your own.
So, look at multi let properties carefully and consider the increased costs and management time that you will spend on them.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of property experts’ lettingfocus.com.
I’m the author of “Successful Property Letting - How to Make Money in Buy to Let” which for the last 3 years has been the UK’s top selling property title - buy the UK's top selling landlord book.
It is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on buying property below market value.
I’m an expert property journalist, property speaker and a well known buy to let blogger
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general property investment advice
I also work as a consultant helping banks, building societies, housing associations and web portals with their buy to let and property products and services and am a regular speaker at property shows.
You can read more of my blog & find details of my networking, advice, property training programme at my website.What’s unique about lettingfocus.com is that we offer you help as an independent landlords' mentor because unlike most people in the buy to let and property “advice” business we are not linked to a property company, a developer, an agent or bridging loan financier and do not receive commissions from any of these sources.Copyright: David Lawrenson 2008. This blog is updated once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
It’s easy.
Go to the bottom of this post, and click on “Link to this post”
Our home blog page should then open & you should then see my smiling profile. Then page down a bit and on the right it will say “Site feed” - click there and away you go.
You then just copy the link that comes up into your News Reader or News Aggregator. Even a non techie like me managed to do all this.
Please note if you are thinking of reproducing material here - that’s fine but we DO require the full links shown in each blog to be included including also the links in the section “ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON” Please contact us via the Contact US button at our main site http://www.lettingfocus.com/ if you have any queries about this.
It was pleasing that record numbers of people came to hear me speak at the show and my own private seminar last night was well attended too.
These events all require (and then generate) a lot of work for me but they are fun to do - and it is nice to help people and meet bright clued up investors – which I’m pleased to say is the kind of people we always seem to attract.
And I also always learn a thing or two from the other speakers and from people who come to the stand and the seminars.
Anyway, today is a beautiful day and it is nice to be back and “ready to roll” at my own property investments.
Expanding my portfolio of properties and managing those that I have already got probably takes up 80% - 85% of my time with my speaking and consulting work, (including talking to journos), accounts only accounting for 15- 20%.
But in the run up to the two big property shows in London and the ones in Manchester and Brum, there is always a lot of work to do, which means my own work as a landlord investor has to take a back seat for a few weeks.
So, it is really good to back in the saddle and looking to buy more property for myself.
Unfortunately, the opportunities now being presented to me as an investor as a result of the falling property market has meant that my own seminars and networking evenings will now only take place just twice a year.
DO get in touch if you want to arrange a private one to one consulting session. I enjoy doing them and can always fit them in.
Anyway, I’m sure you would rather speak to someone whose primary business is actually BEING A PROPERTY INVESTOR rather than someone whose main source of business is from property education.
After all, anyone in search of education about property investment should validly ask the presenter, “If you are such a good investor then why do you spend all your time running these seminars.”
A fair question, I think!
For me the answer is that I actually get a bit bored of landlord work so from time to time, meeting people and networking is always good fun. It is just that right now I can’t afford to do too much of it.
The current property market is really exciting for me as I have not bought in the capital for 5 years (as prices have been too high) but there are signs that property is becoming more sensibly priced. So, I fully expect to make a few additions to my portfolio in 2009.
HOUSES IN MULTIPLE OCCUPATION or HMOs
One thing you get from going to the property shows is a shift in mood and emphasis on certain sorts of investments. (It’s a shame that few property journalists bother to leave their desks and go as they would be better informed for the experience if they did.)
At the show last weekend I detected an increasing number of people asking me about HMOs or Houses in Multiple Occupation
One or two new players are now on the scene advocating that you invest in these shared houses – hence the interest, I guess.
What do I think?
Well, it all depends.
A House in Multiple Occupation can certainly be a good investment and they can outperform more standard lets. There are areas where you can get a higher net rent by renting out each room separately (or you could of course put all the tenants on one agreement.)
But there are downsides, which as someone who has ran an HMO over many years, I feel well qualified to highlight. These are:
First, the management of a large shared house is without doubt more demanding for a number of reasons, principally because turnover of tenants will be higher. One eternal problem is that you will always struggle to know who is actually living in your property.
Second, there are quite a few rules and regulations to cope with and getting a licence (if that applies in your area or if the property is more than 2 storeys and 5 or more tenants) can be very expensive.
Third, mortgage finance will be more costly and harder to obtain.
Fourth, your wear and tear costs will be higher than under a standard let.
Fifth, many letting agents are not interested in letting individual rooms (if that is the way you want to manage it) so you may have to do this on your own.
So, look at multi let properties carefully and consider the increased costs and management time that you will spend on them.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of property experts’ lettingfocus.com.
I’m the author of “Successful Property Letting - How to Make Money in Buy to Let” which for the last 3 years has been the UK’s top selling property title - buy the UK's top selling landlord book.
It is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on buying property below market value.
I’m an expert property journalist, property speaker and a well known buy to let blogger
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general property investment advice
I also work as a consultant helping banks, building societies, housing associations and web portals with their buy to let and property products and services and am a regular speaker at property shows.
You can read more of my blog & find details of my networking, advice, property training programme at my website.What’s unique about lettingfocus.com is that we offer you help as an independent landlords' mentor because unlike most people in the buy to let and property “advice” business we are not linked to a property company, a developer, an agent or bridging loan financier and do not receive commissions from any of these sources.Copyright: David Lawrenson 2008. This blog is updated once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
It’s easy.
Go to the bottom of this post, and click on “Link to this post”
Our home blog page should then open & you should then see my smiling profile. Then page down a bit and on the right it will say “Site feed” - click there and away you go.
You then just copy the link that comes up into your News Reader or News Aggregator. Even a non techie like me managed to do all this.
Please note if you are thinking of reproducing material here - that’s fine but we DO require the full links shown in each blog to be included including also the links in the section “ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON” Please contact us via the Contact US button at our main site http://www.lettingfocus.com/ if you have any queries about this.
Labels: HMO, HMOs, house in multiple occupation, houses in multiple occupation, shared houses
This entry was posted by lettingfocus, on
Thursday, September 25, 2008.
