Turning HMOs into SAs is very profitable. In this episode, Kevin explains how to tap into the fact that a lot of HMO landlords have just had enough and are ready for you to come in and set them up for SA.
Kevin covers section 24 and capital allowances, how to handle current HMO tenants, and the other steps you need to go through to convert an HMO to SA. As well as telling you how to easily find HMO landlords that will want you to run their properties as SAs on their behalf.
KEY TAKEAWAYS
Running an HMO is not a hands off business model. Often, it feels like you are babysitting adults. SA is easier and more lucrative.
SA gets around the looming EPC issue for landlords.
Online portals like Gumtree are the best way to find the kind of landlords who would be interested in SA management. Kevin shares several other sources.
Work out what to do with existing HMO tenants. Kevin goes through the options.
With certain kinds of mortgages, you will need permission to convert to letting.
The language and phrases you use with lenders, the council, etc when switching is important. Kevin explains what to say to avoid the main pitfalls.
For SA Management fees of 15 to 20% are about right. But the costs and risks need to sit with the owner, not you.
BEST MOMENTS
‘I had to spend a lot of money to get it (an HMO room) back into a rentable condition.’
‘With SA management, you take the property on a straight management agreement,’
VALUABLE RESOURCES
Discovery Day Sign-Up Page - https://progressivepropertyreferral.com/serviced-accommodation-discovery-day/amb0676
The Serviced Accommodation Property Podcast - https://itunes.apple.com/gb/podcast/the-serviced-accommodation-property-podcast/id1436005279?mt=2
https://propertysoldier.co.uk/
Serviced Accommodation Success by Kevin Poneskis
Rich Dad, Poor Dad by Robert T Kiyosaki
ABOUT THE HOST
Your host Kevin Poneskis enjoys public speaking, travelling, exercising, and keeping fit. He also enjoys working with a charity called STOLL which provides accommodation and training for homeless veterans.
Kevin was in the British Army serving 24 years, mostly in a Commando unit, and retired at the rank of Regimental Sergeant Major. He left the Army in 2011 and became a full-time property investor. During most of his Army career, Kevin was investing in property and has been a property investor now for over 27 years.
CONTACT METHOD
https://en-gb.facebook.com/propertysoldier/
kevin@propertysoldier.co.uk