If you have just started in HMOs you need to get off on the right footing! Here are some key tips on making you HMO work for you:

1. Make sure you know the complete cost of the project before you begin. Always add in a contingency figure (5% on anything over 120k).
2. Calculate the predicted ROI (Return on Investment) and if it’s likely to be less than 15% DON’T DO IT. You can get faster, cheaper returns by investing in other assets.
3. Do the Spareroom numbers: if there are any more than 3:1 rooms available to tenants looking, NOW is NOT the time to buy in that area. Too much supply.
4. Create your Key Performance Indicators (KPIs) at the start, middle and end of the project. You will invariably change what you want to measure but your KPIs will probably include: monthly rental (predicted); monthly rental (actual); occupancy, advertising costs; length of voids; maintenance spend; time spent on business.
5. Ensure you  (or your accountant) create a Profit and Loss statement that you analyse monthly.  Even if you just have one HMO this will keep you on track and get you to drill down into minimising costs and maximising income.

If you implement these first five steps in your first project you’ll start off brilliantly well! You now have the foundation to scale and grow.

To your success!

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