Tip 1: Single Lets Just Do Not Work

Single-let properties often fail to generate sufficient rental income to cover mortgage costs. As a result, many landlords are considering alternative investment strategies or even selling their single-let properties altogether. This shift in the market is prompting investors to explore new avenues, such as HMOs, serviced accommodations, or other creative approaches to maximise returns and mitigate risks.

Tip 2: Cash Buyers

Aspiring buyers should keep an eye out for attractive cash discounts, typically around 10% of the sellers need cash ASAP.

Tip 3: HMOs Not Only For Students

For new investors venturing into HMOs, it's essential to understand that this strategy is not limited to renting to the students only. Exploring various tenant options, such as young professionals, working individuals, and charities, can open up new avenues for profitable HMO investments.

Tip 4: Impact Of Section 24 

Section 24 has had a significant impact on the property market, with only a small percentage of landlords opting to incorporate, as indicated by Property 118 figures showing approximately 8-10% have chosen this route. This change in the tax landscape has led many landlords to reassess their strategies and look for decreasing their portfolios. 

Tip 5: PLO - The Most Powerful Tool

PLO is not just a strategy, but a powerful tool that is often overlooked and underrepresented in the property market. Many sellers may not need immediate cash but want to get rid of the property, making them open to PLO deals. For example, retiring landlords or those who have inherited properties might not be in a rush to sell and can be flexible about the terms. There are also some unique circumstances where (most often) landladies, who inherit properties after the passing of their fathers or husbands, may be open to PLO deals to avoid the hassle of property management. Rather than negotiating the price down, investors can offer to meet the seller's desired price if they agree to their terms. This can be an advantageous approach, especially when the market is recovering, as it allows for potential “discounted price” in the future. Moreover, transforming a single let into a HMO or SA can be explored as viable options to increase property value and cash flow.

Tip 6: High-End Co-living 

High-end co-living HMOs are experiencing a surge in demand. As the housing landscape evolves, there is an increasing preference among tenants for luxury shared living spaces that offer not just accommodation but also a sense of community and modern amenities. Investors who tap into this trend can capitalise on the growing demand for high-quality coliving experiences, generating attractive returns and establishing a sought-after niche in the market.

Tip 7: The Future Of SA

SA is set to face governmental regulations in the near future, presenting a unique opportunity for professional operators to thrive while eliminating part-time competitors from the market. By adhering to new regulations and providing a top-notch, compliant service, seasoned SA professionals can build trust with guests and investors alike, creating a sustainable business model with higher profitability and a competitive edge in the evolving accommodation landscape.

If you feel Simon’s tips and prognosis about current property market trends were valuable to you, check Episode 10 of DFC here and see how Simon was guiding Ewen and Sarah on their search for PLOs deals in Lester.