As we speak to so many ( want to be) investors….I hear over and over again. I will wait till there is a property crash or the prices are too high. I am so glad they know when there will be a property crash in order to buy their income producing Buy to let or HMO. Prices have shifted so much recently in Manchester all of those investors who thought we were asking too much on our Professional or Social HMOs prices we asked are below comparable prices.
For example we sold a gent from Saudi Arabia several Social HMOs in Salford 2 years ago. They were 4 beds generating net 11,960 per year. We sold him those properties around the 100k mark. We had many investors tell us that prices in Salford will not go any higher and we were asking too much (9% Net return on rents was too low). Today they are worth 140k & maybe even higher. Over the past several years this property investor collected passively nice rents and has had appreciation.
What we try to do is buy value. We recently bought a 5 bed professional HMO. In 2008 that property sold for 110k. We purchased this ( to be) Professional HMO at approx 78k with SDLT. It was a slog as we kept on getting outbid…But Thank Gd we were able to convey. Buying right ensures your profits. The same is we just conveyed on a 4 bed social housing HMO for 55k. Yes we are bringing it back to the brick…yes we are investing a great deal of money in the refurb…but we have a low risk and nice potential upside….regardless if we keep the property or sell it on. Even in a very bad economy, people have to live. Professional HMOs are one of the cheaper and more social options. Social housing is always needed and even in a bad economy,there will be more need for social hmos.
More so, strongly suggest to increase liquidity and risk…is sell one or two out of every three properties. There is nothing perfect. This is exactly what we do. You might be in the situation that we left alot of money on the table…however we increased and enhanced our liquidity. There are always good deals. The hard part is that they are not easy to find. You must do your work. Sourcers, I doubt will not do that work for you. Property is not easy….But to wait for the next property crash is not a prudent course. As long as your Professional HMOs or Social HMOs cash flow, it does not really matter how the prices shift as long as you are not too leveraged or have commercial reviews.
Buy right…manage right….do not over leverage….Stay liquid…compound money via property
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