Are you spending too much time watching TV?

According to a recent survey* adults in the UK spend nearly four hours a day watching TV. This doesn’t account for the time they’re spending on social media sites like Facebook and Instagram.

I’ve got nothing against TV; in fact I can really enjoy a good Scandi murder series like anyone else! At the end of a long day, an hour relaxing in front of the telly can be an ideal way to relax before bed. The issue here is not whether to watch, but how much.

If you find you’re watching a lot of TV, you might ask yourself why? Is it valuable food for your mind? Is it just passing time, or moving wallpaper? Is it a distraction from what you really should be doing? Or is it a way of ignoring the little voice in your head that tells you your life is worth more than this?

It’s so immediate, it’s really easy to find that we just flick the switch (or these days say ‘Telly On’), slouch down on the sofa and a few hours pass by. Is it really worthwhile though? Many of us want to run away from the pain of our daily lives by escaping into other people’s lives. It’s well known that soap operas and dramas are designed to include a cliffhanger deliberately to keep us addicted to the storyline, and stay watching.

It’s often more interesting to see other people’s problems so that we don’t have to face our own. Sadly, all this does is drive us further and further away from creating a solution to our own issues.

I would like to offer you a challenge if you know this is you. I would like you to think of designing your own life so that it has all the excitement of a soap opera with less of the drama! How can you feel more alive, do something that gets you up in the morning with joy, and enables you to create the life of your dreams?

The biggest problem that stops most people doing this is money. If this is you, you will fully appreciate how much of a challenge it is to change your life, ditch your job and do what you feel passionate about. Who will pay the mortgage and the bills? Who will take on board all your responsibilities?

How would it be if you could find another way to create income that doesn’t rely on your time? What about if you gave up a couple of hours of telly watching to learn how to invest in property so that you could make money without a job?

Investing in property allows you to make money without a job. It relies instead on your insider knowledge, your expertise and your contacts. If, through what you knew you could make a thousand, five thousand or ten thousand extra pounds per month how would that change your life? You may think this is ‘pie in the sky’ but I have seen ordinary people, like you, with families, children, jobs and mortgages create thousands of pounds of extra income per month.

How? They’ve done this through investing in HMOs. Houses of Multiple Occupation. I’d love to share with you how I took an ordinary house and turned it into a 7 bed HMO making me over £1500 income per month. And how I did this with very little of my own money.

If you’d be prepared to give up a couple of hours next Sunday night at 7.30pm I’ll be sharing with you – – Why you feel stuck if you are in a job – How to buy property with other people’s money – How to achieve financial freedom with just 5 properties – How to use a simple 5 step system to build your property portfolio.

In addition, for attending the webinar I will send you my unique 7-Step ‘Investor-Ready’ Process to make sure you are prepared for raising all the money for all the property you ever want!

I look forward to seeing you there. Sunday 24th February at 7.30pm.

Please Register for your place by clicking here

What can I do if my partner won’t support me investing in HMOs?

My son Tom is ten years old, and for Christmas last year he got a magic set. He spent the first few days learning all the tricks in the box so that he could amaze all the family with his skills. A few weeks later and there are really only about three tricks that he’s remembered but he’s already close to auditioning for the magic circle. He can summon up these tricks at will, and all he needs is a pack of cards and a one pound coin.

Isn’t it great when you discover something new and exciting? When you learn a new trick, or a new approach? Especially when it’s something that will really help your family like learning how to make money or how to invest in property.

When I learned all about HMOs and realised the amazing cashflow I could make in comparison to my single buy-to-lets I was gobsmacked. I just KNEW that by hook or by crook, I HAD to get into HMOs. My nice little portfolio of buy-to-lets was never gonna make me enough money to leave my job. I just wasn’t making enough money.

So I was committed to getting into HMOs. I was certain. I knew that the way ahead was HMOs. There was just one problem. My problem wasn’t money, it wasn’t time. It was my Darling Husband, Andy! Love him to bits, but cautious? Sheesh, he redefines the meaning of the word. He was SOOOO uncertain it was untrue!! “But what if it doesn’t work, what if we can’t get tenants, what if we run out of money?” he said, his voice laden with doubts.

Ever heard those things from your partner? Or ever thought those thoughts too? Andy was exactly the same.

What I wondered was whether I could ever make this plan work without my husband’s backing. There were risks in going it alone, and I wasn’t sure that I was ready to risk my marriage for money. Deep down I needed to know that he was at least ok with me investing in HMOs, even if he wasn’t willing to do any of the work.

If you’re finding that your partner is less than enthusiastic about your new-found desire to create HMO magic, I might be able to help you.

  1. Don’t rush it. You’ve had more time to let your ideas and your new-found enthusiasm settle than your partner has. He/ she is way behind you in their thinking. They need to learn for themselves. The one way to put someone off something fast is to impose your ideas too fast, too forcibly.
  2. Make time to discuss your ideas. If your partner refuses to listen, ask them if they would allow you 30 minutes to explain your ideas and why you want to invest, without them interrupting or arguing with you. Then you give them 30 minutes to explain why they have misgivings. Then take 15 minutes to calmly discuss your feelings together. After you’ve each shared, leave the discussion for 24 hours. This takes discipline and commitment, but will let your partner see that you are as committed to them as you are to the whole idea of investing in HMOs
  3. Show them you’ve considered their objections by writing out a clear plan. In my experience, people who are cautious tend to be people who like clarity and structure. With a written plan and some thought behind it, your partner may well realise you are serious and have thought about the risks. This alone can shift their mindset.
  4. Accept that your partner’s objections could strengthen your business. Take them seriously and consider whether their reasons have weight. You might realise that if you work on addressing their objections, you could have a stronger business as a result.
  5. Don’t give up on your dream to practice HMO magic. If you are in the right relationship and your partner really respects and loves you, your persistence will pay off.

 

After a few weeks of doing none of the above and frankly nagging Andy to death, he made an excellent suggestion. Being an IT geek, he was used to launching new projects as ‘beta’ projects – trial ones that tested the core idea to see if it would work.

So we agreed that I would launch a ‘beta’ HMO – a trial small four bed HMO. It was the best way to test my idea out and see if it would work, with little risk. It made me happy and it satisfied Andy’s aversion to risk.

Thankfully the project was a huge success, and soon afterwards I could really press on with my goal to create enough HMOs to achieve financial freedom. Our marriage not only stayed intact, but was made stronger as a result.

You can create a magical income from HMOs and you can do it with your partner’s support if you are patient and kind. You never know, in future, they will probably thank you for it.

 

How Can I Get My Money Out? A guide to adding the most value to your HMO.

I speak to a lot of people investing in HMOs and one of their biggest questions at the point of buying a property is ‘How can I be sure to get all my money out?’.
Many of us have been educated to realise that the momentum of releasing money from one deal to use as capital for the next creates momentum for effective wealth-building. Changes to the marketplace, regulation and government towards investors means it is becoming increasingly difficult for investors to pull all their money out of HMO developments, especially if they are new to the market. Many lenders have tightened their criteria so that there is some ‘skin left in the game’ by the investor after the development has been completed – meaning that no matter what you do, you will NOT be able to recycle all your cash when you re-finance after the development is completed. So what can you do to avoid getting stuck with capital left in a project? And how can you best insure yourself against that happening?
Having bought, sold and refurbished nearly 35 properties worth over £5m, we have plenty of experience of developing properties that have valued up thus allowing all the money to be pulled out of the development. We have also had some developments where we have left money in the deal. I wouldn’t necessarily say that the latter were ‘worse deals’ than the former. There are ways to assess and evaluate a project which consider more than just whether you have pulled all your money out. However, there are a few key areas, that when actioned, can create a far better chance of getting all your money out.
1. You make money when you buy, not when you sell. It’s an adage that seems rather counter-intuitive, but it’s absolutely true. Buying a property at the right price is a fundamental first step to adding value. When you buy below market value, you immediately lock in value as comparative to other properties of a similar size, age and state you are already making money by buying below market value. Relying on capital gains is not a sound strategy for HMOs because it can be so volatile. There are clever ways to find properties below market value but they all depend on finding a buyer who is motivated. I suggest rather than looking for properties you look for buyers. We once bought a single buy to let at a considerably reduced price (about 24% below market value) because the tenant had moved out of the house and the landlord had no cash to bring it up to a standard whereby it would re-rent. He therefore had to sell. After we had carried out some basic renovations costing roughly £6k (new kitchen and decoration plus carpets throughout), the house valued up at over £32k more than we had paid for it, allowing us to re-mortgage and pull all our money out. During the conveyancing process on another property which we bought for development as an HMO, we discovered that the garden was hiding Japanese Knotweed! We had a full survey which estimated the cost of complete removal and destruction of the knotweed, plus remedial work on the garden, to be in the thousands of pounds. By taking this figure back to the vendor we reduced the price of the house accordingly. Once the work was completed and insured (very important if you are removing JKW) we were easily able to re-finance the HMO on a commercial basis. If you can find problems with properties, you will find deals. If you can find motivated sellers you can find deals. If you become a problem solver rather than a problem creator, you will find LOTS of deals and this is still the first and the best strategy for creating long term value.
2. Substantially alter the layout. This is a second approach which relies on heavy capital investment and thus is not always possible for investors who are starting out on their HMO investment journey. I’m referring here to putting ensuites in all of the rooms, perhaps even small kitchenettes, moving walls and re-configuring the layout so that the property is clearly only for use as an HMO and without serious work will never be used as a family house again. Getting good plans drawn up by a technically competent person (such as an architectural technician) will also allow you to explore other creative options for the property which a trained eye can spot. Larger properties would be eligible for this undertaking as you will not get the sizes required from smaller houses to make this worthwhile. There is though another risk, which is that in doing so you incur the risk of revaluation of the rooms as single buy-to-let units which in turn become eligible for council tax on their own merits. You need to know the local market sufficiently well to understand how likely this is. When HMOs have planning permission (required for properties with 7 or more bedrooms), a license (currently for properties over three storeys) and full building regulation certification, this can also help to increase the likelihood of a valuation that will recognise the value of the property as a commercial venture.
3. Extend the property. As is the case in standard residential properties, adding extra space to a house can add significant value when designed and executed well. You could add a loft extension, cellar room, or a rear extension to the property, all increasing the rental yield of the house, and adding space. Assuming your costs do not exceed more than 75% of the added value, (i.e. if the added space can add £20k in value to the property, you need to spend 75% or less of that figure to create the space or you will be leaving money in the deal). Space that is already attached to buildings such as garages, workshops or conservatory lean-tos can also be used for conversion (subject to getting the necessary consents). The use of redundant but pre-established space on the footprint of a property has been a well-used hack that developers have historically used to add many thousands of pounds of income to an HMO property. Some of our best performing HMOs are ones we have bought with additional space such as this and converted into additional living or bedroom areas.
4. Great design. Creating beautiful, contemporary and exceptional spaces in which tenants can live is an aspiration for many HMO investors. There are many inspirational ideas you can apply to do this without spending the earth. Lighting, colour, clever use of space, creative touches and unique details can all create a ‘WOW’ factor in an HMO which even valuers are impressed by! Minor improvements such as bathrooms and kitchens of course also improve the look and feel of an HMO. However, in terms of assuring cash out of the deal, this approach is more tricky and may require you to combine this with one of the other approaches I’ve outlined above to maximise the impact that good interior design can have. We developed a small ‘mini-mo’ in Stoke-on-Trent which was bought below market value at £61,000. We spent £26,000 on the refurb which was a huge amount of money comparative to its value. However, the property valued up at £100,000 on a bricks and mortar basis. We left just £2k in the deal and it nets us a profit of £650 per month. This for a small three-bedroom house! The valuer was delighted when he turned up and said it was one of the best-looking properties in Stoke he had ever seen.
5. Experience. If you are brand new to HMOs this is the one area you won’t easily be able to demonstrate evidence of – that is, running and managing HMOs. If you don’t already have other buy-to-let properties this can also be a stumbling block, which is a reason why I advise anyone to get a couple of vanilla buy-to-lets under their belt before embarking on HMOs. Lenders like to see that you are approaching this as a business not a hobby, and have considered maintenance, repairs, voids and local market conditions in your approach to the property. Writing a business plan is becoming a necessity for many lenders to ask for to know that their money is in safe hands (as well as having first charge on the property). This document will become a selling point as you can use it to create the correct impression and build a strong relationship with the lender. It will help you to consider how you will manage the HMO in detail and analyse the risks and rewards if you haven’t already done so. When we put our first business plan in place and gave it to the lender as part of the application, we had excellent feedback which assured us that this was not the normal standard of application they received. Since then we have built a great relationship with this lender, allowing us to access lower fees, lower interest rates and better deals. This takes time and is a huge benefit of HMOs that is not often discussed. Although on your very first deal you may not find that this adds any value at all to the building, as time goes on, the leverage you create when you have a positive and reciprocally beneficial relationship with a lender is huge. Remember you can re-mortgage a property more than once. Property is a long game and having a sound perspective will mean that you can plan when the next round of re-financing can take place. This strategy has tax implications that you should understand and consider, so take tax advice for your business before implementing this approach.
6. Choose the right lender. Using an experienced and well-connected mortgage broker is crucial to get the best valuation on a property. Without experience and specialist knowledge of the marketplace you may end up with an offer and a valuation that does not fully reflect the value you’ve created. By working closely with your mortgage broker they will fully understand your business, your personal situation and agree an approach to risk (again often not discussed but vital when it comes to deciding on your HMO borrowing strategy). Some lenders are happy to value on a full commercial basis (i.e. on a net income multiplier). Others are more cautious and prefer what I call a ‘hybrid’ valuation approach – a mid-way figure that sits roughly half-way between bricks and mortar and commercial. Each lender has their own policy guidance that they use to advise valuers on their panel. While this is not something you can easily influence, you can reject a valuation of a property if you feel it is not reflective of the value you have created. If you are buying with a mortgage and then plan to re-finance after the development is completed, a good plan to make this strategy work will ensure you meet all the lender’s requirements before and afterwards (especially if there is a possibility of re-financing onto a new HMO mortgage product with a different lender).
For example, Precise mortgage’s requirements include:
a. Experience: experienced landlords only. Applicants must have held a current buy to let for at least 12 months prior to application. No first time landlords
b) Occupancy: properties with up to 8 bedrooms accepted
c) Minimum valuation: £250k in London, £100k elsewhere.
d) Rental cover – Interest Cover Ratio: Bespoke ICRs based on individual circumstances to help you to maximise the loan size.
If you don’t meet these requirements you won’t be able to access this mortgage product. Another option is a bridge to term product which allows you to buy, develop and then re-finance with an end valuation in mind. Although this is not completely reliable as a determined end value, it will give you some comfort as to a potential figure. As they say, forewarned is forearmed!
7. Finally, do the maths! Do you really want a commercial revaluation to pull out all of your money? In some areas, it would be preferable NOT to get a commercial valuation if the bricks and mortar value of the property is higher than the commercial multiplier of net rents. Also you must consider the impact on your cash flow if you gear your portfolio highly. By increasing the value of a property you may be able to pull out all of your seed capital, but does it make sense to do it? If the mortgage payments result in creating a risk for your business if your HMO is not fully occupied 100% of the time, is it really right to take out all your money? If you do get a valuation that allows you to withdraw all the added value you have created what is your plan for the money? Having a good accountant and tax specialist at this stage will be vital so that you maximise the positive result you have created. Your age, attitude to risk and overall strategy will help determine the answers to these questions.
Wendy Whittaker-Large
If you would like to find out more about how I can help you realise your HMO ambitions, why not join me on my two-day ‘Multilet Income Multiplier’ Event on 2-3rd March 2019.
At a special donation price of £400 (saving £900 on RRP), with all proceeds going to the YMCA, there is no better time to learn how to systemise your HMO business for success.

Seasons in Life and Property Investing

The recent snowfall we’ve had in the last few days has made me reflect that the seasons we experience in our weather are much like seasons in a property business. Throughout the year we expect to experience different seasons. As the year progresses it would be very strange not to feel the changes in sunlight, temperature and climate. Indeed, other countries across the world have very different seasons to our own. They still have seasons and recognise the need for the rainy season and the hot sunny seasons and the dry season. Yet too often we have expectations that our journey in property can always be in summer mode – sunny, bright and positive! But that’s not reality.

Seasons create the right environment for growth. Without seasons, we wouldn’t get the fruit, vegetables and produce that we rely on to live. Yet in winter it can be hard to enjoy life in the same way we do in summer.

In a property business there are varying seasons – and you might feel right now that it’s like winter. You can’t find the deals, you can’t find the investors, you’re doing lots of viewings and maybe you feel like nothing’s happening and you’re getting nowhere. There’s no shoots, there’s no blossom, there’s no greenery, it feels cold, hard, and icy. At a time like this you need to concentrate on creating YOUR ideal environment for growth. A bit like a compost heap needs time to develop and mature, we also need the right environment to mature into successful property entrepreneurs.

What kind of people do you surround yourself with? Are you in the right group of investors? Are you focusing on expansion or contraction? Are you learning the secrets of successful entrepreneurs while you can, or are you retreating – hibernating, cos it all seems just too hard and impossible for you to achieve?

I’ve worked with many, many people who felt that they were skating on ice. They didn’t have experience, they didn’t have time. And they didn’t have the right knowledge.

Take Keith for example. He was the epitome of a successful businessman, but felt completely stuck in his well-paid job. He wanted to create a reliable extra income stream for himself and his fiancee. He heard about the exceptional returns that HMOs could bring, but had no idea how to do it. He came on my 2-day Multilet Income Multiplier event and learnt exactly how to make his time and money work efficiently by implementing my simple five-step system. In just a few months he had created 3 HMOs and done this with other people’s money! He realised that he was stuck in the winter cycle because he hadn’t taken action towards his goals. When he learnt exactly HOW to create passive income and do it with other people’s money he felt like spring had sprung!

The good news for you is that spring is around the corner. If you take action and do what’s needed you can adjust and change your results.

If you’re interested in learning more, and would like to get started but have no idea how to start, scale and systemise your HMO portfolio, then I’d like to invite you to my next two day event on March 2nd and 3rd. The usual price is £1497 but I am running a unique charity weekend to raise money for the YMCA – a charity that supports young and vulnerable people who are homeless. The special weekend price is just £400! Yes that’s right a discount of over £1000! All money raised will go to the YMCA.

You’ll learn the very same 5 step system that Keith learned and implemented, and is now making him thousands of pounds income per month. You’ll also learn how to sow the right seeds at the right time and in the right way, to get the best deals and to grow your portfolio fast. If you know that this year you really must start to learn how to make this a reality in your life, and make winter turn into summer – then I would urge you to book your place now. At this price, I know the seats will fill up fast, and I wouldn’t want you to miss out.

Click Here to Book up NOW

Just like in the natural world that we see around us it won’t be long before you’ll start to see those green shoots that are evidence of your activity paying dividends. You’ll start to see the trees budding, and blossom appearing.

Perhaps right now vendors aren’t willing to negotiate with you. Maybe estate agents haven’t got the stock on their books. There’s lots of other economic factors at work that are making it feel like winter, but it will change. If you are in it, if you know what you’re doing, if you know what you’re looking for, if you’re practicing, then when spring comes, you’ll be ready.

And then up ahead is summer! Just think about the summer you’re going to have – the kind of rewards you’re going to have and the amount you’re going to be able to reap because you have sown seeds at the right time in the right season. That’s why I’m a big believer in educating yourself about property – how to spot when a deal is a deal, and how to see the conditions for an effective transaction.

When autumn comes, that’s the time for looking at your portfolio assessing how well it’s working and whether you’re getting the returns you expected. Perhaps you need to prune it a little bit. Perhaps you need to cut back a bit here, or you need to push forward a bit there, or you need to focus a bit more in another area. Then, of course, there’ll be time for winter again. You’ll be better prepared next time because you’ve gone through it once already and will know exactly how to approach it and how to behave.

Seasons are natural and rhythmic but I believe that if we act despite what the weather and our feelings tell us, then we can still make the most of our situation to produce great fruit when the time comes!

So don’t let this winter dictate your activity – plan for a fantastic spring and summer, and plant the right seeds in your life now –

Click here to find out more!

To your growth

Wendy

Top 20 Questions for your Potential HMO Agent

If you’re considering HMO’s as your next property investment, have you thought about how you will ongoingly manage them?

If you intend to use an agent, how do you know how to benchmark them against each other?

Top 20 Questions to ask your potential HMO agent…

1. What experience do you have in renting out properties like this HMO?
2. What is the type of HMO you specialise in?
3. What is the average room rent you achieve?
4. What is your average void period?
5. What is your average type of tenant?
6. How do you advertise the properties?
7. On average how long does it take you to rent a room?
8. What percentage of rent advertised do you achieve?
9. Do you rent any licensed HMOs?
10. Are you the manager of any licensed HMOs?
11. What does your service actually include?
12. How do you deal with maintenance and repair jobs?
13. How do tenants contact you for emergencies?
14. How do tenants report issues or general queries?
15. How often do you/your team visit the property?
16. How do you deal with rent arrears/missed rent payments?
17. How do you ensure the cleaner is managed well?
18. Which KPIs do you gather and supply to your clients each month?
19. What is your inventory process?
20. What advice would you give to an HMO landlord?

From stay-at-home dad to millionaire!

Mick Regan was a stay-at-home dad with a busy schedule when I first met him. He had been made redundant from a well-paid job, and was now able to to spend more time at home with his children, which was great. However, he realised that unless he did something soon, his redundancy money would soon be spent!

While it feels nice to buy all those things you’ve always wanted, Mick knew that he needed to replace his income FAST. His redundancy pot was not massive, and he knew that he could fritter it away if he didn’t have an investment plan.

He didn’t know much about HMOs except that they could make him much more money faster than a single buy to let property. So he joined me on my HMO Magical Mentoring Programme and started to look for his first property. Using the knowledge, information and systems from the programme he found an amazing deal almost straight away.

It was a three storey house that had been neglected, and included the bonus of a basement flat conversion. By this time his confidence had grown enough to put in a cheeky offer, and it was accepted. Here are the figures from this, his very first deal:

£178k purchase price

£82k refurb costs

£300k re-valuation

£35k left in the deal

£2500pcm (5 units @ £500pcm)

£600pcm (basement flat)

£3100pcm Gross income (£37200 pa)

The amazing thing that happened to Mick was that after this experience he just got bolder and bolder. He continued to raise money and do deals and he now has a portfolio worth over £1m.

Here’s what he said about working with me’

I started out knowing nothing about HMOs. Wendy taught me how to find the right ones in the right area, and rinse and repeat it. My first HMO makes me £1600 profit per month (fully managed in Stockport) and I now have a pipeline of deals worth over £600k”

It all started with a small investment pot and a desire to create income with what he had.

Could you do that too? Yes you could…

Contact me NOW if you want to find out how you can achieve the same things that Mick did.  I offer a FREE 30 minute consultation call to explore your options and see if mentoring is right for you.

Here’s the link to book your call: https://fwfozt-free.10to8.com/

Books for Christmas!

What’s on your gift list?

Do you have a book you’re hoping someone will buy you?

These are the books on my list (hint hint) … anyone??!!

The 80/20 Principle: The Secret of Achieving More with Less by Richard Koch

ReWork: Change the Way You Work Forever by Jason Fried (Author), David Heinemeier Hansson (Author)

Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist Kindle Edition by Kate Raworth (Author)

What’s on your book list?

Education: A Dirty Word?

I hated school. I really did. Ask my parents, and they’ll tell you how much I resisted getting up in the morning, I resisted getting dressed. I resisted homework. In fact I was pretty good at finding a number of reasons why I should not have to go to school. I didn’t think that school was important, or that I was learning anything useful and I believed that the subjects were completely irrelevant to my life.

And the end result: I failed miserably at my ‘A’ Levels. A year later, with some theatrical experience under my belt, I scraped into a college of Higher Education to do a Drama degree.

What astonished me immediately, was how much I enjoyed it. I bounced out of bed in the morning. I rushed to my lectures to be there on time (gasp!). I spent time in the library, reading and applying myself. Even when I was struggling, I somehow found the focus to keep going. I ended up getting a BA (Hons) 2:1 in Creative Arts. When I phoned my parents to tell them, I think my mum nearly fainted with amazement.

What I realised was this: to learn at your best and your highest level you need to find out what intrinsically motivates you and then spend time learning this on your own terms. I chose the college I attended, I chose the course, and I chose the time commitment. Somehow these three factors had a massive impact on me, to the extent that on the day of graduation, I said “I could do that degree all over again. I LOVED it”.

Fast forward many years later and I felt as equally trapped as I had done at school. Only ironically I was now the teacher, and had a teaching role in Higher Education! In truth, I loved teaching and sparking the process of an amazing lightbulb moment where a student grasped a new concept or understood a theory for the first time. Working directly with students was what I loved best. There were much wider political and structural forces at work, though,  that meant I was often drawn into debates and challenges that had really nothing to do with teaching. I began to feel that there were no other options but to pursue this career to the exclusion of all else. Forever, until I retired. And that I resented.

Now, at the age of nearly forty, I could feel that same resistance I felt when I was a teenager. “I don’t want to get up. I don’t want to get dressed and go to work. I want a hot dinner not a packed lunch”!

I took a long hard look at my life and realised that I had stopped learning. I had cornered myself into a small place and it was time to expand my mind and my reality. As a side-line and a future legacy for my children, I had been developing another small income stream from a few single buy-to-let properties. But I had ignored it, and become rather blase about this small portfolio. This moment of emptiness with my job made me realise that the time to make a change was now. If I didn’t take the leap now (even with a job and four children to manage) I would never do it.

So I started to educate myself. I attended loads of webinars and networking meetings. I read books and subscribed to relevant magazines. I asked lots of questions and attended courses. And more courses!

And I started to buy bigger houses to convert into Houses of Multiple Occupation.

I began to apply what I was learning, and this made me hungry for more. My resistance lowered. I WANTED to learn, I wanted to read and know and I wanted to be AN EXPERT at what I did. I recognised that I was intrinsically motivated to learn how to create HMOs, how to create passive income and how to become financially free…

It’s true that for me, traditional education felt like a waste of time. Only learning what I was self-motivated to learn has ever inspired me enough to maintain my interest. Staying the course depends on you having the interest and aspiration that you feel for the subject matter.

Since that time, I recognise that I love entrepreneurship, business, communications, and people. These are the areas of life that I could study all day long.

It makes it even more fun when I apply it too.

You have to take risks when you are learning something you’re motivated to learn that’s not a school subject. People will think you’re a bit crazy, stupid or mad. No worries. Let ‘em think it.

  • Stay centred on your passion.
  • Make time for learning – theory and practice
  • Keep applying what you’ve learned to make it fresh and real (practice)
  • Take a break when you need some space to cogitate
  • Invest wisely – books, courses, materials.

And above all, find something you are intrinsically motivated to learn. Whether it’s crochet, cookery or computing. Patchwork, pottery or property. As Ray Croc, the McDonald’s owner once said ‘When you’re green you’re growing, when you’re ripe you rot’!

Saturation, Supply and Shifting Sands

If anyone tells you that the laws of supply and demand don’t apply to property, be very careful to analyse their motivation! Whilst property prices are much more linked to the supply of mortgage lending rather than the supply of properties, when it comes to rental availability there is a clear correlation between supply and demand.  In any market place, where there is an over-supply of product there will be an impact on the strategies used to sell that product. This might result in lowered prices, or better deals, or an improvement in quality. HMO rooms are no exception to this rule. If you are investing in HMOs you might have seen some changes to local supply. The fact is that in some areas of the UK there are more rooms than demand at present, and landlords are struggling to fill their HMOs. Why is this?

  1. The first reason is that investors have realised that the only way to maximise their portfolio income has been to invest in HMOs a) to counteract the pernicious new tax laws that are being introduced b) to benefit from higher monthly cashflow c) to leverage commercial finance and d) to protect against potential voids. With access to better information, training and support, more and more investors are recognising the power of HMOs for long term wealth and immediate profits.
  2. Secondly, the introduction of stamp duty on second properties over the price of £40,000 has meant that smaller, single buy to let properties are proportionately more expensive to buy. Coupled with the minimum mortgage or purchase price requirement from lenders where investors are investing via a limited company has lessened the appetite for cheaper properties, and increased the need for a higher return linked to a higher purchase price. HMOs make the perfect foil to these prerequisites.
  3. Brexit and immigration. Certain parts of the UK have already felt the negative effects of Brexit, with many Eastern Europeans migrating back to their home countries. According to Migration Watch UK ‘Although we have seen a fall in net migration of EU8 citizens there have been continued increases in immigration from Romania and Bulgaria, so it is too early to say what effect the referendum result has had on long-term international migration’. In other parts of the UK there is a growing immigrant population. Predictions are that immigration will stay steady in terms of net figures, but that certain immigrant communities may change substantially in terms of culture and mix.
  4. Student housing impacts. In many traditional University towns, an enterprising landlord could make a good living from students renting rooms in the locality. Recently there has been an explosion of high quality, contemporary purpose-built student accommodation wiping out the demand for individual HMO housing, necessitating a shift in market offering from landlords still wanting a profitable return. In many instances, they have adapted and upgraded their HMOs to attract the professional market, and this has in turn impacted the current professional HMO stock.  

These factors have created excess provision in some areas especially where investors have failed to understand the forces at work in the local economy and the necessity to adapt and change to the marketplace. So what can an investor do who is facing competition and wants to resist the lure of price reductions just to fill rooms?

  1. Ensure that you are creating a product that not only offers great value but also has a niche offering. Whether you offer personal service with a smile, have wonderfully designed interiors, or make HMOs great communities, you need to identify what it is you are good at and tell your market place about it. In this day and age, unique and niche brands get people talking and sharing, and your HMO business is no exception.
  2. Tell everyone what you do. Use social media like Instagram, Facebook and Pinterest to share your message and learn how to create advertising copy that sells your rooms (linked to the ideas above).
  3. Work with local businesses and estate agents to create win-win referral deals that benefit them too. Incentivise your tenants to give you referrals and ensure you get plenty of feedback that you either act upon or share!
  4. Respond fast and flexibly. If you cannot respond to a viewing or request quickly, in a competitive market place you will probably wait much longer to fill your rooms.
  5. If you are unsure about consistent supply of tenants, always have a plan B. What else might you do with an HMO that you just can’t fill? Might this present another opportunity that you have missed?

The ebb and flow of supply and demand in HMO rooms is constantly shifting. As investors we not only have to adapt to survive but also to thrive. In this changing landscape of rooms and provision, the creative, savvy and determined investor has the edge. Make sure you’re one of them!