Many Landlords Are Suffering From The OG. Are You?
It’s the Optimism Gap!
The gap between how things are and how you want them to be.
It’s a disease that’s difficult to self-diagnose. You’re probably saying to yourself right now that you know exactly how much you’re making on your rental properties. But do you really know off-the-top-of-your-head the NET figure after mortgage, agent fees, bills, empty periods and maintenance. And now with the new tax changes, after tax! Because we all know the rent that we think we’re getting.
Emma’s 4-bed HMO
I spoke to a landlord yesterday, let’s call her Emma, who has a 4-bed HMO property on the market for £1,200 per month. It’s been empty for 3 months. Yes THREE months! If it rents tomorrow at the asking price and remains let for the next 9 months over the year Emma’s income is only £900 per month over the year. But Emma thinks she’s receiving £1,200.
Many landlords do this. And over the years the OG is MASSIVE!
David’s 8-bed HMO
David’s case is, I admit, extreme. Dave was feeling the pain because no amount of optimism is going to pay the mortgage and bills. The situation is that when we met David last year he had an 8-bed HMO that only had 3 tenants in it. It had only had 3 tenants for months. And months. And months. Not only that, but in all the 6 years he’d owned it, the most tenants in it had had been 5.
These examples show the impact of just one of the costs of managing property. The impact of empty rooms/properties can put a huge dent in your bottom line.
To mitigate the risk you need a great team to manage your property. HMOs tend to have faster turnover of tenants so for HMO management that delivers month and month and year after year returns, you need an A Team.
Your team needs to be on it like a car bonnet to keep your property lovely so that it is easy to fill when a tenant moves on.
We offer guaranteed rent to landlords so that you receive rent every single month whether or not your property is tenanted.
5 Questions to ask before choosing a letting agent
Choosing the wrong HMO letting agent can be a very costly way. Make sure you get it right by asking the 5 questions. Full details in the video below.