New Investor looking for HMO advice and like-minded people to bounce ideas off!

Discussion in 'HMO & Multilet Property' started by Ryan., Jul 19, 2019.

  1. Ryan.

    Ryan. New Member

    Hi all!

    Im looking to buy my first HMO. Im leaning more towards professional tenants as the amount of dedicated student accommodation has seen a large spike among the larger universities. As this would be my first buy to let, i assume buying a setup HMO would be good as i can learn through the process of owning one, and start converting houses into HMO's when i have a good team and more experience.

    Using Spareroom and similar sites I've had a look at the demand for rooms to rent but as this is my first venture, and i have nobody I know of doing a similar thing I'm a bit hesitate to make the first step and what location to start. I will not be self managing this property. Following the sale of a house ill have roughly 180-200,000 to use to purchase. My plan is to buy the first HMO outright with cash (as i cant get a mortgage yet), then once I gain experience go on to use the remaining cash to mortgage another and so on.

    Im just looking for people to bounce ideas off and learn more about this market!
     
  2. Longterminvestor

    Longterminvestor Administrator

    Fire away with any ideas and questions you may have.

    For what its worth I think buying a readymade HMO at this stage is the right thing to do. Steady cashflow (hopefully) and you can effectively learn on the job.
     
  3. Ryan.

    Ryan. New Member

    Thanks for the reply!

    For things to look out for when buying a tenanted property, is it better to talk to a solicitor that specialises in HMO's? Like the deposit, and tenancy agreements, paperwork etc? or is that something I would have to find out myself?

    Also, what are some reasons people would sell ready tenanted HMO's? Other than the odd person setting them up to sell and make a slight profit there must be something the current landlord is unhappy about?
     
  4. Longterminvestor

    Longterminvestor Administrator

    I think some people will home property as part of a long term pension scheme and may at some point need to sell-up. There are a whole host of reasons why they might sell but this should not stop you doing your own due diligence.
     
  5. Also, if you have built up an HMO with decent regular income you can also take into account the income flow as well as the value of the property when looking to sell. Cash is King, but regular cashflow is God
     
  6. Ryan.

    Ryan. New Member

    Ahhh thats one reason people sell ready built/tenanted HMO's! I think thats what im going to have to do for my first one. Bite the bullet and pay extra for a setup HMO so I can learn whilst having an income.

    By due diligence do you mean thinks like, rent arrears, deposits, contracts, tenant turnover.. etc? Is there almost a list of some kind on the forum like a check list so to say when buying a setup HMO? I know it wont cover everything but it would make good foundation to start from.
     
  7. Longterminvestor

    Longterminvestor Administrator

    Hi @Ryan. I don’t think I have seen a list on the forum but it is certainly a good idea. May be time to start one?
     
  8. Ryan.

    Ryan. New Member

    Hey, with everything running through my mind as i try to begin this venture. I'm looking for some guidance. Ive been researching and reading for a few months but what is my first step after i have the money to start. It sounds like a rather silly question but for some reason i cant answer it myself?

    Thanks
     
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