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Article > Thinking about Investing in a high Cash Flowing HMO? - Part 2



Article kindly supplied by Matthew Moody

www.Millenniaproperty.co.uk

www.hmosurvivalguide.com

 

Last month we took you through the planning cycle of how we at Millennia Property turn a single let dwelling into a high cash flowing HMO. This month we will concentrate on how we manage the physical work of turning the humble three bed terraced house into the 6 bed HMO.



The Figures of the project are

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

After all the planning we know that the area works, we have employed the right contractor and architect for the drawings and have cleared with the council regarding building regulations what we need to do to the property and we have now purchased the property it is time to start the physical work.


Procurement of Building Materials
When we at Millennia Property do any project either for ourselves or for any of our investors we pay meticulous detail to the purchasing of materials. Even though we have employed contractors to do the job we still are involved in all purchasing; for a project this micro management of costing allows us to save us and our investors thousands of pounds on every project. One of the many processes we use for procurement that saves us up to 30% on some items is simply phoning three of the same builders merchants like Travis & Perkins in three local towns and asking for quotes on certain products like fire doors or door handles. We generally find that we get three different quotes and can also sometimes get the local store to match the store with the best price therefore keeping costs down significantly across the project when this process is applied to every purchase.

 

HMO Survival Guide

If you're serious about your property business in 2011, you will get this report, right now and read the report today.

Imagine, month after month, having dozens of £400 deposits in your bank account,with almost no chasing the rent and little tenant support—ever. What an easy way to earn a living that would be! You can have that life. I'll show you how.

  • Why HMO's Are The Perfect Property Investment
  • HMO's Are Not Problem Free
  • Why HMO's Are More Than Just a HMO
  • The HMO Survival Guide
  • Managing Your HMO Effectively
  • Make Money With This Report


Starting the Building Works

With 97 Student Row we are going to put a dormer on the attic and turn that into a bedroom. Tank the Cellar and do the same there and also turn the sitting room into a bedroom and add another WC and Shower to the property to make it work for HMO use. This will involve a lot of work and much of it will be messy and noisy and impact on the neighbours.

Whenever we start a project we know exactly how long the project will take and also we know what days and times of days are going to be the noisiest and therefore impact on our new friends the neighbours. We always talk to the houses next to where we are working to let them know how long we are going to be on site, what days we will have machinery working so that they can make plans to go out on those days and we also give them an idea of how nice the property is going to be and how nice the tenants will be and they will know that if they have a problem with anything we are doing they just need to knock on the door and chat to the foreman and we will if possible work around their needs. For us at Millennia Property It is important that the people who live around the property have as little impact on their lives as possible for example if the neighbour works nights we hold of the noisy works till the afternoon.


Project Management

Every project needs a realistic Project Management plan agreed between ourselves and the builders. There is no point in building an unrealistic plan as this will only lead to miscalculation on the coatings and times and will always result in the project running above budget. At Millennia Property we us the project plan as the bench mark for paying our contractors. We never pay up front for any works but always pay on time when a milestone is reached on the project plan.

Even though we have faith in our building contractors they know that we will be checking every day for an update on every project to make sure that works are on time and that the expected completion date is still going to happen.


Every Day Management

This is the most important aspect of what we do on any project. Our builders know that at any time of any day we are available for any questions or queries that crop up. There is nothing more annoying to find out that your building crew is not making any progress on site because they need an answer from you due to an unforeseen problem. We at Millennia Property also make sure that we are on site every day to check progress and see what is happening and is also a gentle reminder to the building crew we are on the case.


Building Your Portfolio
We at Millennia Property are helping many people build their future wealth with high cash flowing HMO’s. We have found that over the many years we have been involved in refurbing a property no project is ever exactly like another and therefore it is important that every detail of the refurbishment and capital works carried out is micro managed. This not only safes time and money but will also eventually increase cash flow.

 

HMO Survival Guide

If you're serious about your property business in 2011, you will get this report, right now and read the report today.

Imagine, month after month, having dozens of £400 deposits in your bank account,with almost no chasing the rent and little tenant support—ever. What an easy way to earn a living that would be! You can have that life. I'll show you how.

  • Why HMO's Are The Perfect Property Investment
  • HMO's Are Not Problem Free
  • Why HMO's Are More Than Just a HMO
  • The HMO Survival Guide
  • Managing Your HMO Effectively
  • Make Money With This Report

 

If you would like to know more about how we at Millennia Property can help you create your future wealth with an excellent HMO portfolio or would like us to help you with any part of your own building projects whether it be sourcing, planning, project managing the build or purchasing the right type of furniture for your HMO please contact Kenny Ranns at the office on 01604 521 305 Mobile 07795 597 305 or email kranns@millenniaproperty.co.uk for more details.

 

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Matthew Moody

About The Author:

Matthew Moody is one of the UK’s top HMO experts and the founder of www.yourhmoexpert.com a website dedicated to providing property investors with free information about investing in high quality professional HMO’s.
He runs regular workshops and speaks at events around the country.
He also runs a HMO management agency with offices in Northampton, Leeds, Lincoln, Hemel Hempstead and Colchester together with a property sourcing and education business, and a furniture package supplier.
For more details, please contact Matthew on 01933 460270/01604 521301 or info@yourhmoexpert.com

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