HMO’s appear appealing when you read the headline. HMOs are popping up as the latest property trend, but there are different aspects to it. Explore how it works and how it doesn't work before you jump on the bandwagon.
Learn more about the reasons why you should re-think HMOs here!
Hey guys. Property search... Think Gladfish. I'm Brett Alegre-Wood and this is Property Rant.
So today, it's a great question, one we get...not hugely often, but we do get it regularly enough, which is that, "I want to do HMOs," or, "I'm thinking about doing HMOs." And you know what? I'm one of the few people that I find in the marketplace that actually I don't care how you do property. You can make money in thousands of different ways as long as you know the rules of the game. And the thing that I find is that most strategies...and if I'm selling HMOs, yeah, I'm naturally going to look to other stuff and say, "They're the negatives, this is why this is better," you know. But my take on this whole thing is neither is better than the other. They're different.
And what I mean by different is the rules that apply to that game and the rules that apply to that game are different. Depends what you want to achieve would depend on whether a HMO is better or whether a buy to let, or whether a hotel room, or whether a bank account or an ISO...whatever, okay...a share portfolio...is better for you. So the key here is, you know, you want to do HMOs, great. But just make sure you know the rules of the game moving into them, because it will sound absolutely idealic and perfect, yeah, because that's what the salesperson is going to say.
You know, from my experience, I don't do HMOs. And the reason I don't do HMOs is because in my experience, they take up too much time and energy and I'm a set and forget guy. I, you know, have family, I've got four kids, I've got a career, I travel a lot, you know, and for me, I don't have the time to worry about the day-to-day management and stuff like that, okay...of an HMO. So for me, I much prefer a buy to let where I can buy it, set it and forget it, and, you know, have somebody else manage it. And if I want to sell it, I can put it on the market, there's no restrictions, there's lots of mortgages to choose from.
So for me, all those things add up to mean, actually, HMOs don't really work for me, but buy to let does, yeah. And that's a key, you know. So for me personally, I go to that. And my business is much more pitched towards people who don't have the time, you know, potentially experienced all the relationships to do it themselves. If you want to do it yourself and you've got all the time, then by all means, go and speak to some of the other companies that do that type of thing, because they will generally be better for you.
My clients are ones that don't have the time, they don't have the relationships necessarily, and they don't have the necessarily experience to do it themselves, so they're happy to outsource it because they've got a life to lead and they've got careers and they've got whatever else...passions and things like that.
They're the ideal clients that I work with, and I find that for those guys, HMOs don't really work even though the headlines that some people put out about HMOs, you know, they're very attractive and you think, "Wow, that's great! They're making such a great yield return and blah, blah, blah, blah, blah," you know. But then you add the licensing, you add the maintenance, you add the tenants and you add the...all these sort of things and you go, "Hold on a sec, it's not quite as good as the headline made it out to be." And that's with anything, you know.
That could be hotel rooms, that could be, you know, level to buy to let, even. Across the board, you can have the pros and the cons of each individual thing. The trick is to know what you want and, you know, the goals that you want to achieve, and then work out the strategy and where the market is and choose what's best for you.
All right, guys, have a great day. Live with passion.