To make the most from a HMO we at Millennia property aim high with our refit. We set our sights on creating the ideal home that most single room tenants only dream of living in, Therefore it’s important to consider early on which features will make the property more comfortable to live in and more valuable in rental profit . At Millennia Property we believe a HMO should not only rent well and be profitable it should also look good and serve the needs of those who live there.

In this article we have concentrated on the most important aspect of all projects the planning. Remember “If you fail to prepare, prepare to fail”

The Property - Property A. 97 Student Row
3 bed terraced Property 400 metres from the University Campus. The potential for this property is to become a 6 bed high spec student house
Total Purchase Price Including All Legal and Refurbishment Costs = £145,000
Mortgage = £737
Rent Per Month = £1800
Yield = 15%
Management Fee @ 12% = £ 260
Maintenance Provisions @10% = £ 180
Profit after all costs = £ 623

Planning - Does the Area Work
When buying a property to become a HMO we at Millennia Property know it is always important to check the area the house is situated in would work as a HMO. We were once asked if we were interested in a property that was in a University town and was a purpose built HMO. We visited the property and found that although there were large amounts of students in the area and that the house was an excellent house for HMOs it was too far away from the university so it would be hard to fill and keep filled as the tenants would look to move out and closer to their studies. We know that even if the property is a great buy and can be purchased well below what we believe to be market value, we have to make sure that for HMO purposes it fits all the criteria as an easily rentable HMO. 97 Student Row is a property that is only 800 metres from the main University Campus and so fits perfectly for what we are looking to achieve.

Working out What Works
It’s worth noting that we at Millennia Property always know exactly what we want from every property and 97 Student Row is no exception, things such as approximate size, how many rooms we need, and how we want to use those spaces. We always think about how we want our tenants to live we do not want them to live in cramped and unfriendly environment at Millennia Property we prefer to create a multiple income property that still maintains the feeling that our tenants live in a home rather than a box. We are always asking ourselves what are we trying to achieve.

Get Experts In
At Millennia Property we are good at knowing what to do to a property and how to find the property but when it comes to conversions of lofts and cellars we make way for the experts. This next stage of planning the project is deciding who is going to do the building work. This is the most important decision after agreeing to purchase. When choosing our builders we always ask three contractors and ask each for a written quote for the work. We always ask for three references and follow them up, and we check out the quality of the work ourselves. We feel this is wise to do even if the contractors come with the highest recommendation. Also at Millennia Property we always check the contractors’ insurance cover by asking to see their builder’s liability insurance certificate. In the case of 97 Student Row we chose to use a company we trust as their work is always good and always on time.

Council
Once we found the property and decided on our builders we then proceeded to work with the council building regulators to make sure that what we were doing with the property they were comfortable with and it would pass. Even though we know our plans will pass we always take the opportunity to work with the council as they are always very helpful and contribute some excellent ideas. For 97 Student row this was no exception and the building officer from the council was very helpful in suggestion solutions to some of the problems we faced with moving walls and the stairs.

As you can see there is a lot of work that goes into the planning of a successful HMO and we at Millennia Property do not leave anything to chance. Next month we will show you how we turned this average home into the right kind of property for HMO living. Then on the third instalment you will learn how we finished and refurbished the property to maximise the rental income.