Harringay, Haringey - So Good they Spelt it Twice!
How profitable are HMOs?
I notice that 185 Wightman Road is to be auctioned on 26th Feb by Sutton Kersh Binstock. From the published details (copy attached - SKB say the information came from the vendor) it seems that the house contains seven self contained studio flats all of which are let and produce total revenue of £58,500 pa. The guide price for the sale is "£600,000+".
Tags for Forum Posts: hmo profits, hmos
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Permalink Reply by Hugh on
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So, looks like my second go on this post wasn't so far off then.
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Permalink Reply by John McMullan on
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That is 9.7%.... I am shocked.
If you have a pension pot of £600,000 when you retire it will return perhaps 3-4% maximum on government bonds (or maybe I'll be surprised) and you may even end up having to eat into the capital. Let's say you paid the outrageous fee of 1% of THE CAPITAL each year to manage it (£6K) you could be living in this with more than £3K a month to spend on whatever the hell you wanted without touching your capital.
What on earth are my elderly neighbours thinking?
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Permalink Reply by maggie on
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....and these HMO landlords have many such houses and spend as little as possible on them. I wonder how much they admit to earning when it comes to paying tax?
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Permalink Reply by Steve Hatch on
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I can say with all confidence and first hand experience that Haringey Council are tightning up on these HMO landlords. They have recently gained some extra enforcement powers too.
I have been approached by several of these landlords, they think they are sitting on a goldmine... the truth is IMPO that many of them are way over the top with their estimation of re-sale values! They tend to go by rental incomes achieved in the past.
Just because these landlords have obtained high rental incomes for these properties in the past, does not mean the next owner can/will. Many Landlords are 'off loading' for a reason! Lower rents, repairs bills required to bring the properties upto HMO License standards, increased legislation, and forced responsibilty.
Now ALL we need to do is get the prices down to realistic figures, and attract families for these big houses (sounds easy when you say it quickly).
The area is going to change very rapidly I predict... It is happening already.
The auction results will be available after the sale. It is very difficult for investors to get funding at present so it will be interesting!
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Permalink Reply by Dick Harris on
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Thanks for these reaasuring words about the tightening up on HMOs. You may be interested to know that, according to the auctioneer's web-site, 185 Wightman Road was "withdrawn" from the sale on 26th Feb. This contrasts with the results for other properties which were "sold", "sold prior to auction", "sold after auction" or "available".
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You are most welcome, thanks for the feedback on the auction result... Interesting!
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Permalink Reply by philipjm on
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Guide prices are usually well below its reserve price, the price the auctioneer expects to receive, and its open market valuation (in that order)....I'd have expected it to go for closer to £900K if the information supplied is accurate (and £175 PW for a studio flat on Wightman Road seems a bit steep, unless it is a rather nice and large example of a studio flat)
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