HMO Liverpool advice please

HMO Liverpool advice please

16:07 PM, 14th September 2017, About 7 years ago 24

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Dear All

16 months ago I bought a 6 bedroom HMO in Liverpool for 145k (105k interest only mortgage with Paragon, 5 year fix); I live in Somerset so it’s managed for me. I’m 54 and planning to retire in a couple of years.

Unfortunately, the expected tenants didn’t materialize, (or at least not enough of them) so I looked at another management company. The 2nd company tell me its location is good, as are the room sizes, but it’s in need of “doing up” i.e. new floors, new bathrooms, (only 2 at present ), new furniture new kitchen and decorated throughout – around 20k. I recently visited the property and noticed a couple of properties nearby which were boarded up, that wasn’t the case when I bought it.

I seem to have 4 choices:

A) Sell and loose maybe 40k- perhaps more.
Its my only property in my company so could sell it and the company together. At least it is a clean break with a city I probably shouldn’t have invested in, (I lack local knowledge). I’d stop worrying about it and focus on the successful properties in my small portfolio.

B) Rent to rent.
This would cover my mortgage but nothing else, worried that the person I lease it to may not look after the property, do the necessary smoke alarm checks etc, at worst case end up leasing to someone who ignores legal requirements and perhaps I end up in court!

C) Spend 20k-30k doing as the 2nd management company suggested, rooms would let out at £300 per month (maybe).
Might work but perhaps I could be putting good money after bad and end up selling at a bigger lose in a couple of years.

D) Invest 110k
A project manager has recommended I spend 110k upgrading the 6 bedrooms so that they are all on suite. I think it would probably rent out at £430 a room, however I don’t want to over extend myself and the profit is a little tight –total monthly costs £1,600, total projected income £2,580. In these figures I’ve assumed each room rents out 100% of the time! After re-mortgaging the total amount of my money in the project is £100k.

Any advice would be brilliant – I’m now having the odd sleepless night worrying about this property!

David


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Rob Crawford

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13:11 PM, 19th September 2017, About 7 years ago

Hi David, what do you think about the condition of the property? Do you feel that it needs the degree of work implied? Maybe ask Some tenants from other local properties for their opinion? Also (back to basics) do you know how your properties are being advertised? Zoopla, Rightmove and On the Market are used by most management agents, especially those moving into the HMO market with little experience. These are not necessarily the best site for HMO's. From my experience, Spare Rooms and Gum Tree tend to be the most popular sites for HMO tenants.

Joe Gervin

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12:52 PM, 11th June 2018, About 7 years ago

David

Did you get your property issue resolved? If you would like to drop me an email, I own an estate agency (www.liverpoolpropertysolutions.com), have a number of BTL properties and develop also. Always happy to help out if I / We can.

Joe @ LPS

chager

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8:36 AM, 2nd February 2024, About 11 months ago

Reply to the comment left by None at 15/09/2017 - 08:19
Hi,
I came across this thread from sevral years ago.
I am looking to purchas an HMO in liverpool, need advice on a couple of things.
Do you know someone that would be have somone that knows the areas and could help?
Would be happy to pay for this..
Thanks!!
C Gerber

Reluctant Landlord

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10:37 AM, 2nd February 2024, About 11 months ago

thinking totally outside the box, what about just letting it as a single let? I appreciate that income may be reduced but with a family in situ then less regs (compared to HMO anyway) and less risk of voids?

There are families who need accommodation and I am sure you will be inundated. An agent to manage but be there yourself at a block viewing so you can see the candidates yourself, have an input. Shows not just the tenants you are interested as a LL and not hands off entirely, but makes the Agent know you are watching them too!) Have a look on Open Rent/rightmove to see what family properties are available and you might find a total lack.

Even see this as a holding plan for a couple of years - then go back down the HMO route if you decide to.

Even if you sell easier to get full possession if its a single let OR another investor may be happier to take on a single let?

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