There are so many gurus out there promising unlimited profits with property. As much as education is important, it is important to introspectively look at your life. Through property investing one can find that so called Freedom number. I am not a guru or teacher. I am practical property investor and want to share a simple effective approach.
- Know what your monthly costs are.
- Add at least 10 percent more than the monthly costs
- You need to have money for your initial deposit or maybe you simply have the liquid cash
- Myself and my Joint Venture partners prefer Professional HMOs and Social Housing HMOs, reason being they cash flow much higher than simple buy to let
- Always look for quality areas. We do not look simply at yield. We do not make our decisions on price increases, Cash flow is king.
- We create value by renovating and making our properties “Wow”. This wow keeps tenants in the properties, gives us higher rents and maintenance is much less.
- Lastly …You know your monthly costs plus surprises…As an example a Social Housing HMO of ours generates on average 11,000- to 12,000 Net…Our Professional HMOs each en suite on average generates approx 6,000 per year. Most of our Professional HMOs have 5 en suites…so ball park 30,000 per year. It this is cash on cash…figure 25-30% less in expenses. If with a mortgage deduct your mortgage interest ( strongly suggest a capital repayment). Figure your cash on cash return.
- Decide on how many of these do you need to financially free. It is not rocket science.
Feel free to ask any questions….