“Will a 4-bed HMO change my life?”
“What’s the point of buying a 4-bed HMO when I could go and develop a 10-bed?”
“This small 4-bed won’t set my Insta feed on 🔥”
My thoughts on 4-bed HMOs are that they should come with different expectations which aren’t just “how quickly can I replace my income”.
A 4-bed should give maybe £500 per month if it’s well run (we’re talking in the North here) but what it gives more than that is a rite of passage, a stepping stone for someone to dip their toe in the water of HMOs either as a new landlord altogether, testing a new area or tenant type or with a lower budget and risk development/purchase.
And there’s something very important in that.
Learning slowing through experience. A 4-bed will never change your life itself but it may be the passage to growing a successful HMO portfolio, working up to 5, 6 and then 7+ larger conversions.
Starting with a 4-bed may help you figure out that HMOs are not for you, that you hate being a landlord or you’ve chosen the wrong area - best to do this on a property that cost you £150k all in (that can easily be turned back to a BTL) than make these mistakes on an 8-bed commercial conversion that hits you for £350k.
Your first HMO doesn’t have to be the one that means you can quit your job.
I see too many people jump straight to the Sui Generis HMO conversions purely because they are focused on the BRR element and the ‘commercial refinance’ - they may have the experience of the ‘theory’ but not the practical experience of having a trusted builder, knowing how to project manage, knowing their area inside out, understand how HMOs operate etc.
If they could go back and start with a wee 4-bed refurb project and do things slower they would.
4-bed HMOs are like doing an apprenticeship and they have a brilliant place in the market for investors and tenants alike.
Financial Controller @ Corplex. Re-useable and fully recyclable packaging.
5moI said to my daughter the other day while looking at the cost of student accommodation that I'd rather be a landlord than a student. Not just private rented either. The university provided rooms are not exactly cheap.