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We have couple of mortgaged flats in Luton,we are living in London.Looking for next step and have cash of £130k in bank and thinking of generating good cash flow and slowly give up full time job.
I am keen to buy in south east/west but returns are not high but could manage property myself.
So we thinking now to buy HMO in north areas for better cashflow but bit affraid where to buy and need to be good agent to look after as we need to be hands off.
We are closley looking in Hull at the moment in HU5 area along Beverley Road in Article 4 and outside too.
We found few places and done research that is good return is close to university and HU5 is good spot for easter europeans workers.
Just not sure to look inside or outside Article 4 in Hull or maybe should look in any other areas?
If there is any landlords from Hull please point in right direction.
Target is good cashflow,have not much voids and good areas with strong demand,interested only working people and possibly students.
4, 5 bedroom or 6 bedroom?We do look for ideally 5-6 beds up to £130k cash,is it all of it worth it?or its just looks good?Return in hmo in Hull tend to be 16% gross when fully let.
There was other areas where we look incl.: Barnsley,Rotheram,Doncaster but i am more into Hull but sometimes its down do right street.
There is one now on rightmove 6bed in Hull for £135k in Article 4 close to University but not sure if this is safe buy...will never be sure investing 200miles from home lolThanks for any advice.
(*Moderator note: Comment removed*).
In light of all the possible HMO regs coming in with the very likely risk of ICTB you might wish to reconsider your proposed HMO strategy.
Think room sizes etc.
Yes Hull is cheap - we used to own property in Hull - no longer thank goodness - avoid the place like the plague.
We now own & rent in Doncaster & are very happy with both our agent & the areas we are in which on the face of it look a lot worse than the areas like the one you are looking at in Hull however Doncaster has a very unique advantage over most northern towns.
PM me if you want my agents details.
Just seen this thread and I'd livlto know more about your HMO experience in Hull and the managing agent you use.
Can you please send me the agents details?
Very much appreciate!
HMOs are a very good prospect and the returns far outstrip anything from a standard BTL, several times over, when you consider Return on Capital Employed. However, the reason for this is that they are for experienced/expert investors. You have to know the rules (national and local, current and pending) inside out.
I would only invest within reasonable driving distance of where you live, or at least only in an area you know very well. You need to ensure there are no problems during the conversion and can visit the property in case of any issues once rented. If you don't manage the property yourself you must first find a reputable letting agent that specialises in HMOs. There are not many.
The new HMO rules coming into force are pretty clear - you should read through the government consultation and government response to this. Also, consult with Environmental Health at the local council with your conversion proposal. They are often very helpful and give lots of guidance. However, don't underestimate the effort it takes to do this sector well.
Rural Practice Chartered Surveyor. Experienced in estate management, residential investments, planning and development and rights for utility apparatus. All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
I would be very careful about investing in HMOs in an area you do not know and using a managing agent.See -
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Well what can I say. You are breaking all of my rules.
- know the area
- assess properties on returns net of tax
- know your product intimately
- don’t outsource your customer service
But, that’s not to say that it wouldn’t work. The questions I’d ask you if you do go ahead (on top of what’s already been said) is why would students want to live with professionals and vice-versa? And do you know/understand Eastern European culture? if not why would you choose this group as your target market?
i am a Eastern European
just thinking to invest back in my home country or put money investing in north or just paid off London mortgage.
spoke with few people some of them invest in hmo not knowing area and never regret.
i mean this is my life savings,it would be good to have university close by as well good point where eastern europeans gathering up for jobs and staff like this.
lots of easter europeans dont want to come to uk anymore or they do rent flats or houses together so if thats happend i may have then renr to students?
after reading all this i may give up whole idea investing in North as its just headache,even with good letting agend i am just not sure and all those regulations not helping at all
It just 16-17% yields gets my attention but after cold shower need to start think reality and net profit
Well I don't want to put you off. Everyone finds their own way of doing it. If you know your market - then that's a good start.
You will find that people on here will caution you - essentially advising due diligence. But you know what, I never went on a forum before starting out. Listening to advice will provide you a short-cut to getting things right. But, everyone's experience is different.
I like your thinking about de-risking things by having a fall-back plan. I think i'd want to find an agent before I bought. They will be really important in getting things right.
If you have insight into the eastern european market, I would go for that. It will give you a headstart. If there's one piece of due diligence you need to do - it's a real net-profit assessment. After voids, income tax, repairs, utilities?, agents fees, council tax, purchase costs, etc etc. How much can you really make?