Great video. Thank goodness for keeping things totally real. I recently attended a 2 day London crash course. The only thing I learnt from that was how to constantly 'high 5' and hug the guy next to me. I learnt a lot more and gained valuable tips from just 18 minutes here.
Ranjan, You bring up some good points. I've been an HMO landlord since 1987 and self managed since 1989 as the agent didn't appear to have a clue so I thought I could do a better job, I've never had to take a tenant to court and I have only lost £60.00 rent so I must be doing something right. Managing HMO"s is not always easy, you neither need a good managing agent which isn't easy to find or you self manage and if I'm really honest its not for everyone, you need to be able to have difficult conversations with people and be diplomatic you also need to know the legislation regarding letting and specifically HMO's. Makes me laugh when I see investors who have been in HMO's for 18 months running training courses and writing books on the subject, but hey what do I know. Go careful out there.
If you are in a struggling area with an HMO it stands to reason your tenants are far more likely to be struggling too. With low demand and high supply I would worry about tenants not paying rent because they know they can easily move to another HMO and do the same thing to them. So not only do you have less occupancy, you are going to have more unexpected costs and hassles too, a double whammy if you like.
@@jamesgrant3812 I do social housing in Birmingham, She is right its very difficult to find your way. It took me over a year to find the sources and the process took some doing. I have 10 properties not my own, I make £1,800 per month per house. DO NOT get more than 10. You can become very wealthy if you put in the effort. If anyone needs any advice let me know.
I like this guy and this channel, Ranjan is more honest about challenges than other property investment channels. ALWAYS do the maths, if you don't know how then get someone to do it for you!
One gripe with your rule of thumb - How are two bedrooms going to be the cost of the mortgage? An interest only mortgage on a 80k house is going to be about £250
Great due diligence advice on the essential calculations needed before purchasing a HMO especially for the inexperienced property entrepreneur. Thank you for sharing appreciate the the information 🙏🏼👍🏻👍🏻
Hi Ranjan,,I’ve just viewed your vlog suggestion on section 24,,,it’s absolute dynamite,,⚡️⚡️!! it would appear I and my partner (wife) qualify for incorporating!! 144 homes let (not hmos) I’ve been a full time landlord for 21 years, I’ve never been attracted to hmos, for the reasons you’ve so clearly pointed out, please accept my heartfelt thanks DB👍
Due diligence is a must for all investors in any sector...if you don't manage the potential risks, you will not be in business for long! good video Ranjan
Great Video Ranjan, I am still proceeding with a HMO purchase/conversion up North watching this has saved me from adding en-suites that could present a significant problem in the future. Can you do a piece on ATED and its implication for landlords. Thanks
Very good video, however, as a letting agent myself, I can somehow disagree with the point where you talk letting agents down. Yes, the bigger letting agents are super terrible, I’ve dealt with them myself and oh I’ve had some bad experiences. Whilst the smaller ones, like myself, take each property as our own and will make sure that we’ll find the best tenants, fill the voids, find best/cheapest tradesmen. However, it’s a really good video 😊
Lavinia, you sound like a rare gem! I've taken back management of my 5 bed after constant hassle and having to manage the agent and his passive aggressive behaviour...!
Brilliant can’t agree more , i really appreciate that you share this information it will help me a lot , you are really amazing and professional person , but the audio of this video is really poor hope it will get better in the future
For details of Ranjan's Commercial Property weekend workshop visit: bakerstreetworkshop.com/ To attend this months Baker Street Property Meet visit: bakerstreetpropertymeet.com/
Dealing with lots of people is a nightmare. I never buy a HMO and manage it - always give that crappy job to someone else . Only look over applicant before they put them in.
So how many room HMO you recommend we should go for. More than 6 needs full planning which is difficult and less than 5 doesn't really cover all costs and make us a profit.
Terrific video Ranjan! How does one systemise HMO management while ensuring the quality of management does not deteriorate? Do manage all your HMO property?
Thank you Rajan for very useful information for HMO property, I have renovated the property to the HMO pecification, but didn't apply for the licence yet, your information is right and I am not going to let it as a HMO property thank you for the Vidio.
Good video, but I don't agree with the mortgage costs being the same as the costs of two rooms. There are a few reasons why. Take for example you rent the room for 450 a month and another for 450 bringing the total to 900 a month. You can get a mortgage for a lot less than this a month. Also if you take a 2 bed property with for example 2 reception rooms and turn that into a 4 bed HMO then likely your mortgage will be even smaller than the typical mortgage for a HMO, while also increasing the property value significantly. In my opinion HMO's have the best return on investment from the majority of property investment vehicles at the minute.
This is the first video on the downsides of HMOs that I've seen. The UK is in the final stages of economic decline, too many taxes and regulations are just like the final days of Rome! Thanks
Thats a bit too much doom and gloom. I wouldn't go that far. I started with HMO's in 1995. It was great back then. In recent years, HMO's are just not as worthwhile as other things you can do in property; in particular commercial property
Good video but iv never understood this assumption that 2 rooms rent = your mortgage. There are so many variables to that, some people borrow more than others, some people go interest only, etc
@@ranjanbhattacharya-succeed7617 Seems like a silly thing for councils to do surely it would make it difficult for people to find a room if HMOs go back to single lets...
I do social housing in Birmingham, She is right its very difficult to find your way. It took me over a year to find the sources and the process took some doing. I have 10 properties not my own, I make £1,800 per month per house. DO NOT get more than 10. You can become very wealthy if you put in the effort. If anyone needs any advice let me know.
its great video .. but all example you given all in cheap area of income .. can you advice whether HMO will work in north west london ( £600,000) house prices 5 HMO rooms with possibility of each room £800 - 1100 PCM. kindly can you advice on that ?
I total understand you advocating lots of rooms in a HMO to obtain economies of scale however in another video regarding shop development, you were recommending converting the uppers into 2 bed flat mini HMO’s. Does a 2 bed hmo work considering all the fixed costs to pay? Interested to know your take on this as I have an opportunity to do this on some of my flats.
HI Ranjan, you have definitely rented HMO's :) there are numerous other issues too like sizes of rooms amenities etc, i hadn't come across the last little chestnut you mentioned in my area , but yes it is a tough business those who think to be a Landlord is easy should think again . One thing I would say is you can self manage from anywhere these days but it does generally mean you need to know tradespeople you trust to call out in an emergency, and at least one smart tenant.
Great video Ranjan. Since you are a fellow fan of rules of thumb, can I ask what your rule of thumb is in terms of going from gross monthly rental to net, eg, would you say it’s a 25% discount once all costs are factored in? Thanks
I don’t see how an £800 cost for an extra room generating usually £300 a month (which also allows you to lower average cost per room and still earn more than a 4 person room) with lowered risk of going into negative earnings is a bad idea?
Hi Ranjan, I have a few four bed house shares in Lambeth. Tenants are on one AST, generally uni mates that are starting out in their careers. Lambeth have just made HMOs with 3+ tenants require a licence. It would be good to get your take on it as it seems my business model hasn't been accounted for in their rules. For instance, I used the Lacors guidance for fire safety. The licence requires that I get a FRA, the FRA goes way past the Lacors guidance with weekly alarm checks etc that I will struggle to get the tenants to follow. Anyway, it feels like the admin burden is going to ramp up and I am not a full time landlord, I do this part time and it already takes up a lot of my time
I am not a massive fan of rent to rent. I have done two videos on rent to rent highlighting the pitfalls: Rent to rent pitfalls from operators perspective >>> ua-cam.com/video/sA9BganZBfs/v-deo.html Rent to rent pitfalls from Landlords perspective >>> ua-cam.com/video/CKIQCkkb3ZQ/v-deo.html
Large HMO’s over 6 rooms need planning. HMOs with more than 4 rooms need license. in article 4 area will need license and planning but will be very hard to get.
Mr Ranjan thanks for the videos , could you please use example + figures or numbers about commercial HMO total cost , ROI in small scales budgets and how long would it take to convert ?
Great stuff on HMO's Ranjan, I think one of the most obvious things is everyone starts doing something then its not so attractive. Also often ignored, is the fact that they all look wonderful after conversion at the start, but the amount of renovation and repair these will need in just a couple of years is scary. Your new HMO, by the very nature of the beast, starts to look run down, and in need of more money, very very quickly, just at the time when a couple of brand new HMO's have started down the street, taking your potential "high turnover" tenants with them. All this, and then you have to try and factor what way government and local authorities will look at these in the future. HMO's feel like a bit of a busted flush to me, anywhere outside of London and South East.
Absolutely correct. In cheaper areas there are new HMO's springing up all the time which means that your HMO looks shabby (by comparison) after one year! ...premium rents achieved on renting out a brand new HMO are no sustainable one year on
hi great video..... thanks alot. but i have a question.. if i have a 3 bedroom house and would like to rent all three i have a few questions please.. 1) do i pay council tax for all three rooms? 2) would i need to seek permission from council? 3) is there any where i can get more information about this.... this is all new to me and would love to learn more before i make the move. many thanks
Interesting content, I was always under the impression that they could only charge separate room council tax if you had both en-suite and kitchen in a bedroom??
12:20 We were all under the impression that council tax was payable only if the room was fully self-contained. However there was a recent case which went to court (in 2016), which seta new precedent whereby full self-containment was not required for individual council tax to apply. The outcome of this case was a little open to interpretation. A few councils have gone the kill and started imposing Band A on each room. Others are seem to be waiting to see the effect it has on HMO supply.
Ranjan Bhattacharya - Baker Street Property Meet Thank you for this information, I also use the same rule as you and buy more expensive houses to create HMO’s in much better areas and it truly helps to keep off competition
Thanks for the candid video I guessed it is not all rosey as they wants us to think🙄. I would be interested to attend The Baker st workshop sadly i'm far from London. Is there any other cities you do it also? I live in East Midlands area.😊
Hi. Feb workshop is fully booked. Next one is May. Unfortunately, I only do them in London. But so far we have had people fly in from Estonia, USA, South Africa & Malaysia to do the workshop. Look forward to seeing you at a future workshop. www.bakerstreetworkshop.com
I am suffering from those pitfalls you describe in Norfolk. The thing is I have a full license for both of them but the rents have been stagnant for almost 10 years and the local councils demand more and more. What do you advise I should do? Give up the hard fought licenses (I understand the local council is not giving any more licenses) and covert to single family homes or hold onto the license, tenant them to the maximum possible and then sell to an investor @ a premium?
I assume you have time? But little money? If that's the case, you need to acquire the knowledge to find deals where the equity is in the deal and doesn't require you to put it in, by way of a cash injection. The best opportunity I see to do this is in commercial property. To see what I mean, check out this video: ua-cam.com/video/J_k_rqMfOOw/v-deo.html
Great videos! I have a question, would appreciate any help! I am looking at 2/3 bed houses to convert to larger HMOs and one thing I am struggling with is knowing what to look out for in terms of what indicates good potential to convert. I'm finding it rare to see floor plans that have multiple reception rooms for example, is it the sqft i'm meant to be looking at or is it something else? Any help appreciated!
Ranjan and great fans , i have a 4br flat with HMO. Uni Tenants have left, it is near the university so considering renting out airbnb to a airbnb company to manage, currently have a letting agent manage though considering doing myself. Which generally gives better returns, Thoughts?
Really depends on where you are and the short term rental demand in that area. Aribnb and short term rentals are at a low now due to covid-19. But in normal conditions, the issue with airbnb is occupancy. if you are close to 100% throughout the year then it will be great. But most won't be and once management charges are taken into account, you may work out pretty similar to HMO returns
Generally speaking lower value areas where house prices are below the national average, are saturated with HMO's because of too much supply and not enough tenants
that's a little harsh. HMO's can work quite well if you do the larger ones, ie 8 beds or more, include communal spaces etc. That's because you have a bit of scale to spread your fixed costs over, which you don't have on a smaller hmo. (but larger ones need planning permission)
@@RossKayy97 there's a reason that there are plenty of HMO properties for sale in one area, but that's not to say don't look into it if its what you want. There are plenty of agents around the university who will advise you.
R K I’m from Hull, Hull Uni has built lots of student flats next to their exam centre, inside the university: 1-2 minutes walking time to lecturer, student Union, tutorial, Library; it’s nicer than HMO in Newland (lots HMO in Newland area are old, and you share bathroom and toilet with other 2 or 3 people) ; more privacy, safer than HMO outside Uni (crime problem in that area),; competitions (I know two companies are also building student flats); price is good (realize the profit, price may not be good in the future because family don’t like these HMO, no exit strategy),..... to be honest, the yield is not that good, many are overpriced (personally think). If I invest in HMO, I want plan B as well: so if it doesn’t work, then I can do single let
really sorry. Can't offer any advice on this. Tax, tenancy law and local regulation change market completely from country to country. If you want to do it in Ireland, follow local advice only.
We only run the commercial property workshop 3 times a year. The October session is fully booked. The next one is 18th/19th Jan. Visit www.bakerstreetworkshop.com (There is an early bird discount code which is valid till end of October. Enter ‘BSPMVIP’ on the checkout page)
Great video. Thank goodness for keeping things totally real. I recently attended a 2 day London crash course. The only thing I learnt from that was how to constantly 'high 5' and hug the guy next to me. I learnt a lot more and gained valuable tips from just 18 minutes here.
LOL, High Fives and Hugs!
How much did you pay for the course may I ask? And was it Samuel Leeds?
Couldn't agree more. Just keep on mind that Ranjan is also selling a course. Everyone ha a a motive. Mr Leeds obviously is the worst in that sense.
Ranjan, You bring up some good points. I've been an HMO landlord since 1987 and self managed since 1989 as the agent didn't appear to have a clue so I thought I could do a better job, I've never had to take a tenant to court and I have only lost £60.00 rent so I must be doing something right.
Managing HMO"s is not always easy, you neither need a good managing agent which isn't easy to find or you self manage and if I'm really honest its not for everyone, you need to be able to have difficult conversations with people and be diplomatic you also need to know the legislation regarding letting and specifically HMO's.
Makes me laugh when I see investors who have been in HMO's for 18 months running training courses and writing books on the subject, but hey what do I know.
Go careful out there.
If you are in a struggling area with an HMO it stands to reason your tenants are far more likely to be struggling too. With low demand and high supply I would worry about tenants not paying rent because they know they can easily move to another HMO and do the same thing to them. So not only do you have less occupancy, you are going to have more unexpected costs and hassles too, a double whammy if you like.
excellent point
@@ranjanbhattacharya-succeed7617
ranjan bhai, are you bengali ?
@@ranjanbhattacharya-succeed7617 is Swindon a good area for hmos ?
@@jamesgrant3812 Lot's of hmo's in Swindon.
@@jamesgrant3812 I do social housing in Birmingham, She is right its very difficult to find your way. It took me over a year to find the sources and the process took some doing.
I have 10 properties not my own, I make £1,800 per month per house. DO NOT get more than 10. You can become very wealthy if you put in the effort.
If anyone needs any advice let me know.
I like this guy and this channel, Ranjan is more honest about challenges than other property investment channels.
ALWAYS do the maths, if you don't know how then get someone to do it for you!
I tottaly agree with you of all the 5 pitfalls you have mentioned in the vedio .
Thanks alot
Thanks. Being new to property Investing this confirmed alot of my suspicions.
One gripe with your rule of thumb - How are two bedrooms going to be the cost of the mortgage? An interest only mortgage on a 80k house is going to be about £250
MMA Via depends where you live and how your mortgage is
based on a 4% interest rate and 20% deposit i would say its less than 250 on 80k house
@@nassah2010 What are you charging per tenant a month
@@jackjill3205 around Merseyside where this type of property is common average rent can vary from 280 to 340
Great information Ranjan, I have been thinking to get next property as HMO. Like you said nobody share these information.
An EXCELLENT video Ranjan 😊
🙂 Thank you. Do let me know when you are next London way.. Would love to meet up
Great due diligence advice on the essential calculations needed before purchasing a HMO especially for the inexperienced property entrepreneur.
Thank you for sharing appreciate the the information 🙏🏼👍🏻👍🏻
This is why I'm subscribed to Ranjan 👌
Very interesting and I agree, why is government continuously stamping on landlords lately? Just doesn't make sense to me!!
Chris Johnson
Hi Ranjan,,I’ve just viewed your vlog suggestion on section 24,,,it’s absolute dynamite,,⚡️⚡️!! it would appear I and my partner (wife) qualify for incorporating!! 144 homes let (not hmos)
I’ve been a full time landlord for 21 years, I’ve never been attracted to hmos, for the reasons you’ve so clearly pointed out, please accept my heartfelt thanks DB👍
ua-cam.com/video/leNe-zWamIU/v-deo.html.
Due diligence is a must for all investors in any sector...if you don't manage the potential risks, you will not be in business for long! good video Ranjan
Great Video Ranjan, I am still proceeding with a HMO purchase/conversion up North watching this has saved me from adding en-suites that could present a significant problem in the future. Can you do a piece on ATED and its implication for landlords. Thanks
Very good video, however, as a letting agent myself, I can somehow disagree with the point where you talk letting agents down. Yes, the bigger letting agents are super terrible, I’ve dealt with them myself and oh I’ve had some bad experiences. Whilst the smaller ones, like myself, take each property as our own and will make sure that we’ll find the best tenants, fill the voids, find best/cheapest tradesmen. However, it’s a really good video 😊
I would agree with that
Lavinia, you sound like a rare gem! I've taken back management of my 5 bed after constant hassle and having to manage the agent and his passive aggressive behaviour...!
There seems to be an abundance of cheap HMOs in Hull. Maybe the owners are trying to get rid for some of the reasons you mention.
One year on and Hull is still cheap
This isn't the best presented vid b but the info is gold and you've got a nice vibe about you. I appreciate that you did this.
Great video Ranjan. These pitfalls are hardly ever mentioned by others. Thanks for sharing.
Kind Person for giving advice. He is not jealous and selfish. God blessed Him 💖🌈🙏
I have listened to many but this guy talks sense, with out high fives and hugs
Spectacular video
Ranjan i think you are very honest person. Hard to find.
I just told a property developer about your chanel today.
Hope to meet you one day.
Awesome video.
Great video Ranjan - refreshing to see someone talking reality 😄👍🏻
Great Content from Ireland 🇮🇪
What a fantastic video and advise. I’m looking to purchase my first and so this was mega useful. Thank you!
Great video! Clear and concise
Brilliant can’t agree more , i really appreciate that you share this information it will help me a lot , you are really amazing and professional person , but the audio of this video is really poor hope it will get better in the future
There was nothing wrong with this video's audio...Maybe you have a problem with your microphone...or your phone! Maybe even your ears...(sorry)
Lol
A very realistic honest video make absolutely sense
For details of Ranjan's Commercial Property weekend workshop visit: bakerstreetworkshop.com/
To attend this months Baker Street Property Meet visit: bakerstreetpropertymeet.com/
Dealing with lots of people is a nightmare. I never buy a HMO and manage it - always give that crappy job to someone else . Only look over applicant before they put them in.
Who do you get to manage it? I'm about to buy a HMO but no idea who to hand it over to for management. Thanks.
So how many room HMO you recommend we should go for. More than 6 needs full planning which is difficult and less than 5 doesn't really cover all costs and make us a profit.
Thank you Ranjan - I've been watching a lot of your videos and they have all been incredibly insightful as this one has!
Brilliant thanks 🙏🏽 for your info 👏🏾👏🏾
Terrific video Ranjan! How does one systemise HMO management while ensuring the quality of management does not deteriorate? Do manage all your HMO property?
Yes piftalls... the poor hardworking home owning neighbours whos lives a made a nightmare
Thank you Rajan for very useful information for HMO property, I have renovated the property to the HMO pecification, but didn't apply for the licence yet, your information is right and I am not going to let it as a HMO property thank you for the Vidio.
Another great insight. Keep them coming.
Thank you for the valuable advice I appreciate it
Nice advice
Good video, but I don't agree with the mortgage costs being the same as the costs of two rooms. There are a few reasons why. Take for example you rent the room for 450 a month and another for 450 bringing the total to 900 a month. You can get a mortgage for a lot less than this a month. Also if you take a 2 bed property with for example 2 reception rooms and turn that into a 4 bed HMO then likely your mortgage will be even smaller than the typical mortgage for a HMO, while also increasing the property value significantly. In my opinion HMO's have the best return on investment from the majority of property investment vehicles at the minute.
This is the first video on the downsides of HMOs that I've seen. The UK is in the final stages of economic decline, too many taxes and regulations are just like the final days of Rome! Thanks
Thats a bit too much doom and gloom. I wouldn't go that far.
I started with HMO's in 1995. It was great back then. In recent years, HMO's are just not as worthwhile as other things you can do in property; in particular commercial property
Good video but iv never understood this assumption that 2 rooms rent = your mortgage. There are so many variables to that, some people borrow more than others, some people go interest only, etc
Thank you Ranjan for this information.
Great comments, very helpful thoughts that I need to be mindful about!!!
Thank you Ranjan fantastic video 👍🏽
council tax just makes no sense. because you have bathroom in your room then the house pays 2-3 times more than another house in same street.
Agreed. But more and more cash strapped councils seem to be heading down that route.
@@ranjanbhattacharya-succeed7617 Seems like a silly thing for councils to do surely it would make it difficult for people to find a room if HMOs go back to single lets...
what a video great
I do social housing in Birmingham, She is right its very difficult to find your way. It took me over a year to find the sources and the process took some doing.
I have 10 properties not my own, I make £1,800 per month per house. DO NOT get more than 10. You can become very wealthy if you put in the effort.
If anyone needs any advice let me know.
its great video .. but all example you given all in cheap area of income .. can you advice whether HMO will work in north west london ( £600,000) house prices 5 HMO rooms with possibility of each room £800 - 1100 PCM. kindly can you advice on that ?
Hmm interesting
Thanks Ranjan. Very useful info..
Amazing. Thanks 😁
Business mortgage is higher compared to personal.
3000 is mortgage so how can I make profit on that
I total understand you advocating lots of rooms in a HMO to obtain economies of scale however in another video regarding shop development, you were recommending converting the uppers into 2 bed flat mini HMO’s. Does a 2 bed hmo work considering all the fixed costs to pay? Interested to know your take on this as I have an opportunity to do this on some of my flats.
HI Ranjan, you have definitely rented HMO's :) there are numerous other issues too like sizes of rooms amenities etc, i hadn't come across the last little chestnut you mentioned in my area , but yes it is a tough business those who think to be a Landlord is easy should think again . One thing I would say is you can self manage from anywhere these days but it does generally mean you need to know tradespeople you trust to call out in an emergency, and at least one smart tenant.
Excellent video thank you.
Good job mate great real advice. Thank you 🙏
Thank you
Thanks for the video..
Thanks mate
hmo voa in individual rooms i think it is if all rooms are ensuite, if it is a mix it is less likely.
Great content! Subscribed
Another great video thank you.
Great video Ranjan. Since you are a fellow fan of rules of thumb, can I ask what your rule of thumb is in terms of going from gross monthly rental to net, eg, would you say it’s a 25% discount once all costs are factored in? Thanks
I don’t see how an £800 cost for an extra room generating usually £300 a month (which also allows you to lower average cost per room and still earn more than a 4 person room) with lowered risk of going into negative earnings is a bad idea?
Well said, good common sense as per usual
Hi Ranjan can you do a talk on social Hmo's plz, its something I'm intrested in doing in the future. Thank you
good to highlight the bad, too many harp on about positives only.
Hi Ranjan, I have a few four bed house shares in Lambeth. Tenants are on one AST, generally uni mates that are starting out in their careers. Lambeth have just made HMOs with 3+ tenants require a licence. It would be good to get your take on it as it seems my business model hasn't been accounted for in their rules.
For instance, I used the Lacors guidance for fire safety. The licence requires that I get a FRA, the FRA goes way past the Lacors guidance with weekly alarm checks etc that I will struggle to get the tenants to follow. Anyway, it feels like the admin burden is going to ramp up and I am not a full time landlord, I do this part time and it already takes up a lot of my time
What do you think of rent to rent management or guarenteed rent schemes for landlords? Great video-thanks.
I am not a massive fan of rent to rent. I have done two videos on rent to rent highlighting the pitfalls:
Rent to rent pitfalls from operators perspective >>> ua-cam.com/video/sA9BganZBfs/v-deo.html
Rent to rent pitfalls from Landlords perspective >>> ua-cam.com/video/CKIQCkkb3ZQ/v-deo.html
Useful info. Do all HMOs need planning or only large HMOs? Is this set-out in NATIONAL legislation?
Large HMO’s over 6 rooms need planning.
HMOs with more than 4 rooms need license.
in article 4 area will need license and planning but will be very hard to get.
What if we rent hmo to council?
Mr Ranjan thanks for the videos , could you please use example + figures or numbers about commercial HMO total cost , ROI in small scales budgets and how long would it take to convert ?
How many bedroom house need hmo or don't need ?
Great stuff on HMO's Ranjan, I think one of the most obvious things is everyone starts doing something then its not so attractive. Also often ignored, is the fact that they all look wonderful after conversion at the start, but the amount of renovation and repair these will need in just a couple of years is scary. Your new HMO, by the very nature of the beast, starts to look run down, and in need of more money, very very quickly, just at the time when a couple of brand new HMO's have started down the street, taking your potential "high turnover" tenants with them. All this, and then you have to try and factor what way government and local authorities will look at these in the future. HMO's feel like a bit of a busted flush to me, anywhere outside of London and South East.
Absolutely correct. In cheaper areas there are new HMO's springing up all the time which means that your HMO looks shabby (by comparison) after one year! ...premium rents achieved on renting out a brand new HMO are no sustainable one year on
Insightful.
hi great video..... thanks alot. but i have a question.. if i have a 3 bedroom house and would like to rent all three i have a few questions please.. 1) do i pay council tax for all three rooms? 2) would i need to seek permission from council? 3) is there any where i can get more information about this.... this is all new to me and would love to learn more before i make the move. many thanks
Great video good info
Interesting content, I was always under the impression that they could only charge separate room council tax if you had both en-suite and kitchen in a bedroom??
12:20 We were all under the impression that council tax was payable only if the room was fully self-contained. However there was a recent case which went to court (in 2016), which seta new precedent whereby full self-containment was not required for individual council tax to apply. The outcome of this case was a little open to interpretation. A few councils have gone the kill and started imposing Band A on each room. Others are seem to be waiting to see the effect it has on HMO supply.
Ranjan Bhattacharya - Baker Street Property Meet Thank you for this information, I also use the same rule as you and buy more expensive houses to create HMO’s in much better areas and it truly helps to keep off competition
What about if I just gave my 3 bed house to 3 single tenenta ? Is it still worth or not ?
very good points
Thanks for the candid video I guessed it is not all rosey as they wants us to think🙄. I would be interested to attend The Baker st workshop sadly i'm far from London. Is there any other cities you do it also? I live in East Midlands area.😊
Hi. Feb workshop is fully booked. Next one is May. Unfortunately, I only do them in London. But so far we have had people fly in from Estonia, USA, South Africa & Malaysia to do the workshop. Look forward to seeing you at a future workshop. www.bakerstreetworkshop.com
I am suffering from those pitfalls you describe in Norfolk. The thing is I have a full license for both of them but the rents have been stagnant for almost 10 years and the local councils demand more and more. What do you advise I should do? Give up the hard fought licenses (I understand the local council is not giving any more licenses) and covert to single family homes or hold onto the license, tenant them to the maximum possible and then sell to an investor @ a premium?
Hey Ranjan,
Great video. What would you recommend for someone who is new in the property business with little money to invest.
I assume you have time? But little money? If that's the case, you need to acquire the knowledge to find deals where the equity is in the deal and doesn't require you to put it in, by way of a cash injection. The best opportunity I see to do this is in commercial property. To see what I mean, check out this video: ua-cam.com/video/J_k_rqMfOOw/v-deo.html
What if your HMO are individual rooms NOT incorporating shower/wc, are we still liable to pay council tax for individual rooms?
Surely Interest only is the way for HMO as mortgage payments are cheaper PM??
when are you starting workshops again Mr Bhattacharya?
Thoes councils charging Band A council taxes for each room for HMO's are they also charging hotels with ensuites?
Great videos! I have a question, would appreciate any help! I am looking at 2/3 bed houses to convert to larger HMOs and one thing I am struggling with is knowing what to look out for in terms of what indicates good potential to convert. I'm finding it rare to see floor plans that have multiple reception rooms for example, is it the sqft i'm meant to be looking at or is it something else? Any help appreciated!
Perhaps a house that has space on one or both sides and large gardens, front and/or back to build extensions to get more rooms.
Single let is best?
2021 theres even more probblens
Ranjan and great fans , i have a 4br flat with HMO. Uni Tenants have left, it is near the university so considering renting out airbnb to a airbnb company to manage, currently have a letting agent manage though considering doing myself. Which generally gives better returns, Thoughts?
Really depends on where you are and the short term rental demand in that area. Aribnb and short term rentals are at a low now due to covid-19. But in normal conditions, the issue with airbnb is occupancy. if you are close to 100% throughout the year then it will be great. But most won't be and once management charges are taken into account, you may work out pretty similar to HMO returns
Where are these HMO over subscribed areas? Just so I don't waste my time looking in that area. Thanks
Generally speaking lower value areas where house prices are below the national average, are saturated with HMO's because of too much supply and not enough tenants
Pitfall number 1: get into HMO investing in the first place. Absolute mugs' game.
that's a little harsh. HMO's can work quite well if you do the larger ones, ie 8 beds or more, include communal spaces etc. That's because you have a bit of scale to spread your fixed costs over, which you don't have on a smaller hmo. (but larger ones need planning permission)
I live in Hull and there's loads of empty HMO and student let's for sale.
Chris Lee really ? I was thinking about investing there, is it a bad idea if I brought a hmo next to the university?
@@RossKayy97 there's a reason that there are plenty of HMO properties for sale in one area, but that's not to say don't look into it if its what you want. There are plenty of agents around the university who will advise you.
R K I’m from Hull, Hull Uni has built lots of student flats next to their exam centre, inside the university: 1-2 minutes walking time to lecturer, student Union, tutorial, Library; it’s nicer than HMO in Newland (lots HMO in Newland area are old, and you share bathroom and toilet with other 2 or 3 people) ; more privacy, safer than HMO outside Uni (crime problem in that area),; competitions (I know two companies are also building student flats); price is good (realize the profit, price may not be good in the future because family don’t like these HMO, no exit strategy),..... to be honest, the yield is not that good, many are overpriced (personally think). If I invest in HMO, I want plan B as well: so if it doesn’t work, then I can do single let
So do you need a hmo license for a 2 bed flat renting out to uni students ?
may depend on area an local rules
ranjan im looking into HMO'S here in ireland and renting out to students any advice??
i know the property market is quiet different to the uk.
really sorry. Can't offer any advice on this. Tax, tenancy law and local regulation change market completely from country to country. If you want to do it in Ireland, follow local advice only.
I would love to attend your workshop this month. How do I reserve my place? Also I would love to meet you as one 2 one.
We only run the commercial property workshop 3 times a year. The October session is fully booked. The next one is 18th/19th Jan. Visit www.bakerstreetworkshop.com (There is an early bird discount code which is valid till end of October. Enter ‘BSPMVIP’ on the checkout page)
Sobering !!!...