The biggest mistakes made by HMO investors are?

[Veronica James]

Having never invested in a HMO property before what are the biggest mistakes and pitfalls investors usually make with this type of investment?

 

[Judith Beilby]

Research is the key to good property investments. An over optimistic view of the market, cost to renovate, room rates or tenant availability can leave you with a dangerous shortfall. Be realistic and do your research.
Never take the view of the estate agent as your only guide!!

 

[Michelle Barringer]

As every project is different the best way to avoid major mistakes with your project is to have a good network before you start and listen to there advice - you don't always have to take it but if you trust them and they have experience they may flag issues to you before they become a problem.

 

[lookinginvest]

I would say expecting massive returns very quickly and not taking into account running costs. Always leave some money aside for that proverbial rainy day

 

[Longterminvestor]

Failure to plan means planning for failure. Some inexperienced investors automatically assume everything is straightforward, simple with limited time, effort and money required. If it was that easy, everybody would be doing it!

Do your research, have your finances in place and be fully aware of your obligations to tenants and the regulations going forward. That is a good start.....

 

[Tracey Woods HMO]

The biggest mistakes that I have seen investors make are:

• Not doing the right research - knowing the regulation for their area and being conservative with their estimations on figures
• Not taking into account the maintenance needed on a HMO - more wear and tear
• Presuming they will get commercial valuations on rental income and not bricks and mortar valuation
• Identifying a HMO expert management team/agent. It is far more work to manage a HMO than a single let
• Trusting sourcing agents to find property - not even seeing what they are buying
• Not learning from the experts - training and education is available and should be used to learn before doing

Hope that helps. As a HMO expert for over 6 years I am happy to help as much as I can.

 

[Mark Lodge]

Due diligence! Do your homework, get creative - don't just ask a couple of agents what they think Do your own research - check out the competition. voids / maintenance costs HEATING BILLS! you need to make sure that the market is not over saturated driving down rents - then set yourself apart from the competition -- add value to your property so that tenants will want to live there! New properties always have certain appeal but you need to keep ahead of the curve and make sure that all maintenance issues are dealt with at once, the internet is always working and is super fast broadband (Virgin is the best by far at present with their fibre optic going up to 200mb). Get a great management company - ideally one that doesn't have a large HMO portfolio already (their voids will always get filled before yours do). Get training - there are some great courses that will teach you this strategy in detail so if you are serious about doing this, get an education on it!