Real Estate Investor Magazine South Africa Real Estate Investor Magazine - April 2017 | Page 45

be installed to warn each person of the impending
threat.
3 Fire blankets: these can be stored within the
kitchen to help slow down a fire
4 Emergency lighting: that aides the tenants to a safe
escape route.
5 Escape routes: when constructing a HMO you will
need to design the floor plan for an easy exit route.

The above are just a few examples of the regulations
behind the HMO strategy. It is a fantastic strategy
that provides incredible rental yields, but it can be
a mine field of risks for the uninformed investor.
Luckily, with our experience and contacts within the
UK, we have tried, tested and perfected the HMO
strategy to bring us consistently good rental returns.
Minimising the risk:
To lessen your risk, you must do two things:
Firstly, get a good letting agent on board. The HMO
strategy only works when you are receiving your
rentals. If you have bad paying tenants, you turn your
asset into a liability overnight, and will continue to
bleed monthly. Also, your letting agent knows the
www.reimag.co.za
area inside out and knows how to target the right kind
of tenants. In our investment portfolio, we only work
with vetted letting agents that provide scrutinised
professional tenants.
Secondly, get a partner who has the experience and
track record when working with houses of multiple
occupation. This strategy has many upsides and,
equally, many risks involved. Rather than investing
your money into a potential opportunity, partner
with a team of professionals who are already investing
their own money into successful HMOs. It’s a niche
market with few players in the game, but the team at
UK Property Partners can secure your investment in
a positive, cash-flowing rental HMO and provide you
with the returns you deserve.
The HMO strategy requires a high capital input to
get going, but the cash flow is incredible and we are
seeing returns of over 15% per annum. This strategy
requires preparation, planning and partnership to
make work. It’s not a beginner strategy, but a beginner
can invest with the right team.
RESOURCES
UK Property Partners
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