Those of you who are regular readers know that the business I have built up over the last 3 years has been in buying run down properties in areas across the north of England and turning them into high-end professional HMO’s (houses of multiple occupation) to maximise the cashflow and income from the property. All of this I have done remotely by sourcing, utilising and managing excellent power teams of experts that live locally to the properties. This is giving investors who work with me the opportunity to get access to something they could never achieve in the south both in terms of building a property portfolio and also being able to do so completely hands-free.
This strategy is working well and so I am now in the process of bringing in my next strategy to grow alongside the HMOs; Serviced Accommodation. Whilst remaining focussed it is always sensible to bring in another stream of income once your first one is up and running so that you are not too dependent on one strategy. Serviced Accommodation is really just the new buzz word for ‘holiday lets’ but with the rise of websites such as AirBNB and Booking.com is becoming far more prevalent as a way of taking the income from your investment property to the next level, even beyond that of HMOs. The main difference is that with HMOs you charge by the room on a tenancy agreement whereas with Serviced Accommodation you are charging by the night with money taken up front! And it’s not just tourists that can be your customers, there is now more and more demand from companies to place their contractors or re-locating employees in serviced accommodation rather than hotels. This can be for months at a time as it works out cheaper for them and gives their staff a ‘home from home’.
So, whilst this is a new strategy for me, it is something I have been researching for at least a year and slowly building the team of people I need in order to fully leverage and outsource as much as possible, very similar to my HMO model. So, I’m very excited that I have now had an offer accepted just last week on my first one and I can’t wait to see how it turns out! Needless to say, you will be the first to know but for now, here are the overhead numbers….
Two bed flat (sleeping up to 6 with sofa bed in lounge)
York City Centre
Purchase price – £195,000
Price charged per night – between £120 and £180 (peak)
Net income per month (after utilities, cleaning and agency fees) – between £1500 and £4000
I will be buying this with a mortgage and investor finance and so, after paying the mortgage payment and the interest payment to my investor (who is getting around an 8% return month on month), I will personally net between £500 and £3000 per month depending on the time of year. Not bad eh?! I’ll keep you posted on how it turns out in future blogs…..
If you’re interested in getting into property investing either actively or passively then please do drop me an email. I’d love to go for a coffee or skype and offer some help and guidance if I can. Never a charge for a chat!