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HMO | What is a HMO Property Investment? - YouTube
Channel: Samuel Leeds
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hey Samuel leaves here and I want to
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show you so much that just blows my mind
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in property you see there's two houses
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right next to each other this house
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right here with the with the black door
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gives a total rental income of 12,000
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pounds a year but the house next door to
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it which is actually cheaper house
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because it's a mid terrorist rather than
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terrorists the house next door brings in
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thirty thousand pounds a year more than
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double the rent how on earth does the
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house next door bring in more than
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double the rent so how it does it is
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because it's used as a HMO HMO is simply
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when you rent out a house rather than
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renting out as a whole house to a family
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you went out on a room-by-room basis now
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if there's five or more rooms rented out
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we call that a hate mo if there's three
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or four rooms rented out like a mini HMO
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we just call that a multi let property
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and the reason HMOs are so popular now
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in the UK is because you can literally
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turn a normal house into a cash cow so
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it's giving you serious money each month
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and there's a few things you need to
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consider when buying a haitch mo firstly
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you need to be like right now we are
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right in the city centre we're in
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Litchfield so we are like maybe a five
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minute walk from a city centre which
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you've got to be if you're buying a
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property the rooms will not rent out if
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you're in the middle of nowhere if
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you're in some field in Wales it's not
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gonna work so it needs to be close to
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city centre number two if you're renting
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rooms out they can't be little cot rooms
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because it's just it's just not legal if
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it's got five bedrooms or more you're
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gonna need a license so the house has to
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be fit it has to be the bedrooms has to
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be a minimum of 70 squared feet or six
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and a half meters and you've got to have
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decent sized kitchen where they gonna be
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sharing the kitchen half a meter of
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worktop space per tenant there's gonna
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be a decent sized house don't worry
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about the garden don't worry about Drive
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it does need any of that stuff but
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actually inside it's gonna be fit it's
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going to be habitable you're gonna have
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a license for the property so anything
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there with five or more people you need
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to get a license and I hate Shamu
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licence will cost you around about
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anywhere between sort of five hundred
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and twelve hundred pounds
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but you'll have to renew every five
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years number three the house is gonna
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have to be a mint-condition
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now I personally like to either buy
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properties that are already in mint
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condition or add a lot of value and then
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we finance them but if you try and rent
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out a HMO a room and the houses a shabby
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and the rooms are shabby and the
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furniture is shabby what's gonna happen
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is you're going to attract shabby
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tenants a dog kennel attracts dogs so
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you've got to make sure your HMO is nice
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its professional so you get the best
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kind of tenants number four is it's got
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to be managed by somebody because hey
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chairs are quite difficult to manage so
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you need a letting agency in the area
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that are close by and happy to manage
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HMOs now you can't just find a
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run-of-the-mill high-street letting
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agency it needs to be someone that
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specializes in hmm oh and that's what's
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going to bring you your true passive
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income so where would you find someone
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that specializes in hmm management or
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you can look on spare room code at UK
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and you can see other people's HMOs and
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who they're managed by and bring them in
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the area or you can google it or you can
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ask referrals or you can go in a high
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street but just make sure if you do find
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a high street letting agency they really
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do have experience in HMOs ask them how
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many current HMOs have got in their
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books and get a real understanding if
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they know what they're doing or not I've
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just gone into a high street and I've
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just said to them hey do you know any
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letting agents in this street that deal
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with HMOs and specialize in HMOs and
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they've said that do so I'll go in and
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ask just ask the question put all your
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cards on the table so let's see what
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[Music]
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so I've just spoken to they do manage
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HMOs but then when they saw we had a
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camera they got a little bit even the
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camera wasn't what happened there HMOs
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and they said yeah absolutely come and
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sit down and then I said do you mind if
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we film and then we literally got thrown
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out but they were just like no please
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leave I said look I'm just only filmed
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me you know what this is the stuff that
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sometimes we have to go through as
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camera people documenting the journey
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but it's all good anyway go into later
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agents ask them this is why it's
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sometimes better finding HML managers on
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on spare-room maybe just be hunters they
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don't do HMOs but they were more
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friendly than in fact the the manager
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there said you've read my book and was a
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big fan so that's kind of cool did you
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get that video name dude let's try one
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see this is it man this is what you have
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to do sometimes
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I've got properties in Birmingham so I
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know how they work but what's the
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demands do they rent out quickly or do
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they take a while what's the is it so if
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you put five rooms on that road would
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you expect them to go out weeks or
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months before they went yeah
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cool thanks James take it easy mate so
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just four into the estate agents Jamin
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have told me that the demand is really
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strong in Litchfield you're gonna get
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between 400 and 450 very easily per room
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which is great
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and he said that the rooms went out
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really really fast here so I've had to
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literally go into all these different
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agents in Litchfield or I actually have
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my own letting agency so if I was doing
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it I wouldn't need to do that but I'm
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doing this to show you what you need to
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do so step 5
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should include things is how much you
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actually gonna be putting down in the
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first place now I have a rule that says
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30,000 pounds per letter Ballroom is
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about as high as Olga so for a four-bed
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Heights MO 120 is about as high as I'll
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go if it's a 5 bet I've got to 150 in
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Litchfield isn't it possible maybe if
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you know how to get below market value
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deal which I deal with some of our other
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videos you can check those out so that's
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basically it make sure that the property
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is in good condition when you rent it
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out there's at least four little rooms
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there's a hmm management company in the
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area you're buying it at the right price
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and lastly it's very close to the city
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center like these properties are I hope
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that's been helpful don't forget to stay
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tuned for our next video
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god bless peace out the stuff we put
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ourselves through you know what bringing
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this go around with me in Litchfield
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with this big thing people freaked out
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that when people see there's a camera
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they think that you're there to like
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ship them up and expose them on some
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secret documentary most most people that
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are successful in property they keep
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their cards close to their chest they're
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like you know people say how do you do
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property they like keeping it close I
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teach you guys everything and put myself
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through this so you better freaking
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subscribe man you better frickin go
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around with this camera like it is not
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easy trust me but I want you to see why
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I was still in the real world so
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subscribe right now I'll see you next
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time thank you so much
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