As promised, I’ve talked below about my current projects and where I’m up to with them. It will hopefully give you a feel for what I do and may spark some ideas for you as to what you can do if you venture north!
1. 7 bed HMO in the Wirral.
This is coming along nicely and due to be complete in 10 days’ time. Now starting the final snagging and working on the decoration (you’d think that would be the fun bit but I always get my project managers to do the lot – not a clue when it comes to decoration)! Always looks cracking when finished though so I trust them.
The issue with this one at the moment (and there’s usually something!) is that the planning permission for the 7 bedrooms instead of 6 bedrooms was denied about 2 months ago. The reason was because the planning department concluded that an HMO would have a detrimental effect on the immediate neighbourhood. We’re appealing as the quality of the property will have the opposite effect and bring the neighbourhood up! It will easily be the best house on the road and is a high end all en-suite property which will only have professionals as tenants. Fingers crossed on that one. Worst case scenario though is that we lock up a room for 6-12 months and then re-apply which will be easier once it’s been up and running as a 6 bed for a while as it will have a track record.
This property will have a gross income per year of around £37,000 which will mean my investor and I will share a net income of around £1200 a month after all costs. Not bad hey!
2. 4 bed HMO in Oldham
So I wouldn’t normally look at anything less than a 5 bed but the numbers on this one made a lot of sense. There is huge demand from professional tenants who work at the Oldham hospital and the general standard of HMO accommodation in Oldham is pretty poor. I only do high end en-suite rooms for professionals which will attract the highest rent and keep people staying for longer and when the purchase price is around £60k you can’t go far wrong. Mind you, we’re spending more on the refurb and fees on this one than the purchase price but worth it to do it properly from day one. It’s being taken right back to brick so LOADS to do. We’re now about 8 weeks into the refurb and expect it to be done in about another 10 weeks all being well.
This one will gross about £26,000 a year netting my joint venture partner and I around £500 a month EACH net. You don’t need many of these in order to replace your income.
Both of these properties will be financed onto commercial mortgages, once tenanted, which will mean that my investors get most of their money back out to invest in the next property and the next…hopefully! A great way for us both to build our portfolios AND our income for life.
3. 1 bed flat in the Wirral
I blogged about this a while back but it STILL hasn’t completed! You can’t believe how long things can take, even on a cash purchase for £21,500 with no chain! My solicitor has been brilliant at chasing but unfortunately the vendor’s don’t seem to have the same urgency. Just a couple of minor issues left to resolve on this one but should be completing in a few days.
Refurb will take a week and cost around £500 (less than the £1000 we thought it was going to be)! And to top it off, we have a tenant interested at £375 a month who wants to stay as long as possible. Nice!
As I mentioned before, this will net around £300 a month after costs. An investor is part-funding it for me on a long term loan with a monthly return of 7.5%. He’s happy, I’m happy! This means I will clear around £200 each and every month on this with no work. Wouldn’t normally do 1 bed flat’s as it’s not my usual model of HMOs but when it’s 19% gross yield for such a low outlay I couldn’t say no. Will be a nice little one to add into the portfolio to tick along nicely.
If you want to know more about any of the investing that I’m doing or are maybe interested in joint venturing, then please do drop me an email – always happy to go for a coffee to chat about it some more. Never get bored of talking about property!