The Real Cost of Voids In HMO Properties
So many investors…both new and old do not fully grasp the real cost of voids. The cost of voids eats into your profits and in some cases makes the property a negative cash flow machine.
Do not be deluded by HMO yields of 15-20% gross.
Be concerned about NET returns.
Good Management reduces voids however does not eliminate them. We learned the importance of avoiding voids and maximizing our profits. We do this by only renting our HMO properties for Social Housing. We enter into 5 year contracts with no voids…no management…maintenance covered up to 5,000 per year. I have had countless emails that said they do not believe it…Well it is true. There are government social housing programs as well as council programs that lease properties for long duration’s and guarantee no voids. We have done both….council and Government contract holders for social housing.
We greatly prefer the later as once we finish the refurbishment we hand over the keys and the rent starts. We keep some of these properties and sell some. Since the properties cash flow from day one they are extremely in demand. We have spoken to investors from China, India, the Middle East and just yesterday Gibraltar. Social housing helps the community and helps us as business people. It took a great deal of time to learn how to do this. The hardest part is getting the properties approved. Not all areas are open. Before I get a great deal of emails. I only know the greater Manchester area. We only focus in this area. If I can help in any way…I am more than willing…Just let me know…
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