Top positive review
59 people found this helpful
Good advice overall but not perfect
on 12 January 2015
I currently own two HMOs and have managed them myself for the last 8 years so I have a lot of experience in this myself. However, my experience is in management, not sourcing and purchasing the properties myself. This is the advice I was looking for and I found this book to be quite helpful in this field. Whilst it's not overly detailed it still does give enough information for you to work with and think about in this area.
The reason I do not give this book a 5, is because I fundamentally disagree with a couple of points that the author has made about managing the property. Firstly, he almost practically dismisses reference checks altogether where you're only renting a room to a tenant as opposed to a whole property. This does seem to explain to me why he seems to go through more tenants than I do. For £25-£30 you can hire a company to do a credit check, obtain an employer reference and a previous landlord reference. They will then, based on that information tell you how suitable the tenant is (though you can figure that out for yourself). The whole process usually takes no more than a couple of days. Combined with the viewings I do personally, as a result, in 8 years, I have NOT had one tenant default on rent in a HMO (that's not to say it won't ever happen, but it does speak volumes). The time and little money you spend vetting a tenant will pay off in dividends after. Don't skimp on this process.
Secondly, there is no mention of how to fund major repair work and maintenance. As an example, in the space of 3 years I had to replace two boilers (at a cost of £2500-3000 each). If it wasn't for the fact that I put 10% of the rental income I earn from a property into a 'reserve fund' (savings account) purely for this purpose, every month my monthly income would fluctuate dramatically. But thanks to this reserve fund, my disposable income remains steady throughout the year. Another example, because of the size of properties I have, insurance costs circa £700 a year (and that's after a lot of shopping around), I also pay this in a lump sum. So I do strongly recommend thinking about how you are going to finance the larger expenses.
But nonetheless I still think the author gives a lot of useful information for a HMO beginner and for that reason I think it deserves 4 stars, there are just a few minor things which I disagree with, but then everyone will have their own way of managing things. I know I can't be going far wrong as some of my tenants have stayed over 10 years, most at least a few years, unlike the 6 months to a year the author quotes.