Common Buy & Hold Property Headaches Buy to Let & Professional HMOs
No one really wants to speak about all the “Common Buy & Hold Property Headaches”. Been there, done that…experienced them first hand. The reality is not what is so spoken about by mentors, gurus and courses….Property is tough. You will have all kinds of experiences and issues….Issues instead of headaches if you can change the wording.
Do these seem familiar?
One resident in either a buy to let or Professional HMO is driving you crazy. Or maybe you’ve been up late, worried sick about that one property that just isn’t turning a profit, and you’re sick of losing money month after month. Or perhaps those property renovations that were supposed to be finished in three weeks are still going after three months. I learned a new word, builderitis. It is a common disease among too many builders.
As I am not local in Manchester….Worse still for the passive investor is the lack of communication you get from your property management company 1,500 miles away. It’s not due to the lack of connection— but the lack of actual effort by your management company to connect in the first place. I saw a recent post on Facebook in one of the HMO property groups that a lady from China was looking to source…refurbish and tenant a Student HMO from China remotely. All I can say, thank GD I have great JV partners who have a great deal of incentive, but trying to manage remotely is very difficult to say the least. We have had floods in the middle of the night and even a storm that blew down a wall. Unless you have great relationships you have a major issue or a headache.
One problem I see on the immediate horizon for Buy to let and Professional HMO owners..
Negative cash flow
Negative cash can easily rattle someone or put them panic mode. The world is changing for buy to let and HMO investors. Negative cash flow can happen for a variety of reasons not just because the UK Govt has changed tax laws. Maybe you had an emergency that caused a spike in property expenses, like a major repair. Maybe you’re dealing with a vacancy or a costly renovation. A few months of negative cash flow is generally okay. You should have the cushion to be able to absorb that and still manage.
If you can not manage….sell the property and move on.
Conversely…I can not find BMV deals in my area. First join the crowd. It is a sellers market currently …however interest rates could be the nail that bites rather soon. The key is to be creative and create value. Obviously in many areas properties are too expensive in the markets. But remember—good deals don’t make you a good investor. They help and they provide some cushion….but If you want to attract the best residents, attract them with the best properties. Offer residents the best service. That is why we do our Professional HMOs up to a high level with en suites. Tenants stay longer and pay more money. We try to make the best properties in our local market. I strongly suggest you look on Spareroom or the other sites and look at your competitors and make your buy to let or your Professional HMO stand out…
Another common headache is repairs. My suggestion is do not skimp on your refurbishment. Your tenants will know and it will end up costing much more money. The best advice we have is not to delay with repairs with them the right way and to thoroughly investigate your builders before moving forward. Remember my word Builderitis….You want to go with someone who will be honest and fair with their prices and who will do the job quickly and efficiently. Do your due diligence here and really shop around and learn what you can about any and every company you work with.
I hope this helps…These are my real world experiences…share yours..
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