With a cost of living crisis, interest rates increasing, stress tests becoming more stringent, and inflation skyrocketing, one of the best property strategies for investors to focus on in 2023 is around increasing cashflow, and that strategy is HMO’s according to Premier Property.
By implementing the HMO Strategy you are able to increase cashflow significantly, especially during these challenging times and you are also tapping in to an increasing rental demand market as more tenants are looking for HMOs.
From the experience of housing 100s of HMO tenants, There’s 3 tenant types that we believe are the best
- Students – reliable and predictable stay
- Keyworkers (especially NHS Staff) – longevity
- Young professionals who have recently graduated – use to HMO’s as students
Aim to target development deals which can be done quickly in this current climate, which have a clear exit and also commercial to residential projects that have a short time line. Larger development projects which can take over 18 months are higher risk because by the time the project is done, the market maybe in a completely different place, so you may find profits being wiped out completely, and in many cases make a loss.
The fact is despite these uncertain times property has been and always will be one of the best asset classes to be investing in. If you assess the worlds wealthiest people, they all have property portfolios.
To add to that, if we are assessing property over a 10 year time frame, there’s a number of tangible factors at play that work to your advantage, and one of those is inflation. O. Inflation, although it has a negative effect on other parts of the economy, as a property investor is has a huge benefit. Over a 10 year period, inflation compounded at 5% means: 1) an increase in property price by 63% 2) an increase in rental by 63% 3) loan reduction in real terms by 63%. a win win win.
In addition there is a fundamental lack of supply of housing in the UK, and in economics the principle of supply and demand ultimately means prices go up. To add to that the government’s levelling up scheme and bettering of infrastructure around the UK means that for a new investor it’s a good time to get in, and if you’re an experienced investor it’s time to derisk and scale.
We have a number of resources we have created for property investors, to get access them for FREE email hello@premierproperty.co.uk now with the subject ‘Show Gifts’ and we’ll send them across
Premier Property will be exhibiting at the Property Investor Show on 6/7 October 2023 at London ExCel
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