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2020 Property Investment Guide

This is the Best Time in History to Build a Successful Property Portfolio

  • Record Low Interest Rates

  • DECLINE on Low Deposit Mortgages

  • First Time Buyers Struggle

  • DECLINE on New Property Developments

  • Increasing Demand For Affordable Rental Properties

Landlords and Property Investors are entering unprecedented times that are offering unparalleled opportunities. As we embark on the imminent “Property Gold Rush”, this is the best time in history to get involved in property.

No doubt property prices will start to increase again over the coming years but its very unlikely to see big returns like we did since the 90’s or even since the last recession in 2008. Buy-To-Lets with single occupancy is not a bad strategy but it brings low returns banking on the property value to increase over a long term. Lets be honest here, its nowhere as near as a good investment as HMO where a multi let property gross yields are far higher, in some cases 3 times than a standard buy-to-let. Statistics from Mortgages for Business show that since Q2 of 2018, the gross yield of an HMO has increased from 8.6% to 9.6% in Q2 of 2019, whereas a standard buy-to-let has increased by 0.3%.

There’s a phenomenal opportunity in a time of unparalleled economic positioning, within which high volatility and high volume presents the most lucrative landscape in a generation. Of course, there have been previous times of similar economic turmoil. However, what makes this period unique is that in addition to high volatility, we have high volume and to top it all off, highly entrepreneurial market conditions. This is the icing on the cake for those educated in this field.

WHAT ABOUT BREXIT?

In January 2018, it was expected that house prices in the United Kingdom (UK) would increase in the following years. Forecasts indicated a cumulative growth of residential property prices between 2018 and 2022 of 12.6 percent. As of July 2018, the average price for a house in the UK was 231,163 British pounds. Brexit process created concerns This forecast was released before Brexit started to appear in the news, throwing a spanner in the works for any prediction on the UK’s future. The political uncertainty surrounding the idea of the UK leaving the European Union forced a decrease in the number of property transactions in the last months of 2018 but began to rise during the beginning of 2020 before the COVID-19 pandemic hit the UK in March. Brexit has taken a back seat during the COVID-19 pandemic but it will surely begin an the property market will pick up again which makes this period a great opportunity to snap up a few properties while the tide is low.

There’s a growing demand of tenants for newly renovated and modern HMOs and with Councils turning down 90% of applications and most first time buyer mortgages being rejected, its creating an increased demand for HMO Rental Properties.

“Be fearful when others are greedy; be greedy when others are fearful.”

In times of uncertainty and change, capitalise on the discounts available for the right stock or from the right seller. There are always deals to be done. Secure these discounts” Warren Buffet

Is Property Still a Lucrative Investment?

YES, if you invest in the right areas with the right strategy. BUT if you are thinking of sitting on it to wait for the next boom in property prices, forget it. It won’t happen like it did before. You need to start generating passive income from properties and the most effective way to do that is to convert your property into HMO’s, triple your rental income. Yes that’s converting houses with multiple occupancy. A well-kept secret for decades!

London: Lowest House Price increase / Lowest Rental Yields

The doubts on the housing market especially affected the city of London. Compared to other UK regions, the capital has seen the lowest price growth after 2019 compared to the rest of the country.

Birmingham & Coventry: The Next Best Place to Invest?

West Midlands has shown much better growth in Property House Prices and rental yields. Birmingham is the next city to boom in UK and with our establishment in this city we have first hand knowledge and experience in this great big thriving city which has a lot of upside potential especially with the construction of the HS2 connecting London within 50 mins bringing more potential business, jobs and people wanting to relocate for a better quality of life from surrounding areas. In 2019 HSBC had already moved their headquarters to the Birmingham city centre with PWC following suit carving the way for the new financial district in the Midlands.

HMO Investments in the Coming Years

FACT: The demand is there. The UK’s population is continuing to grow. The Office for National Statistics reported that England’s population alone grew by 358,000 in 2018 (up 0.6% from mid-2017). With a rising number of people in the UK seeking city accommodation, the shortage of housing stock is another key driver of growth in this market.

Research on HMO’s

After carrying out extensive research and attending up-to-date high profile focus-groups then coupled this with our experience and knowledge  we’ve manage to pick out some of the main commercial drivers and surrounding economics to outline why the 2020-2025 provides this unique opportunity, and how you can capitalise on it. The UK economy and property industry are displaying emerging signs of volatility due to a market and landscape of reducing confidence and increasing uncertainty – there’s fear of recession in the headlines with the Covid-19 Pandemic changing the new norm, Brexit, landlord tax changes and increasing regulation and legislation, to name just a few. Combine this with record low interest rates, cheap finance, unregulated crowdfunding, access to a skilled worldwide labour force and government initiatives actively promoting small businesses, and you can see how the unique opportunity we refer to is fast emerging. As majority of investors, residential home buyers and corporate developers, step aside and wait for the return of stability in the market, property entrepreneurs like you with liquid cash in the bank can move in to seize this opportunity and capitalise on the most lucrative landscape in a generation.

“A market of change and uncertainty does not mean you need to sit tight and wait for the majority to decide which way we are going to move again. Act now and take advantage over the majority.”

Get access to heavily discounted properties with potential HMO conversion opportunities

This window of opportunity will soon start to close, and we strongly suggest it is something to explore through 2020.

Tighter regulations on HMO Licenses mean it’s getting tougher to convert a property into an HMO. HMO’s still bring a great investment opportunity today and you can achieve this on a small scale by investing in single residential properties or on a larger scale by converting commercial properties into residential blocks, multiplying rental revenues whilst increasing the value of your property investment.  We are not talking about new builds but HMO Conversions, which reduces planning permissions, regulations and more importantly time and money.

How to get ready for the Property Gold Rush

Approaching the year ahead, and ensuring you are well positioned to make the most of the best time in history, if you have these 4 things in place you are ready to take advantage.

Liquidity

Finance is available, but if the market gets as volatile as it could, traditional lenders and or their valuing surveyors may start to lock up. Cash is king, get liquid and it will be a VIP card to the highest-level margins.

Good Advice

It takes time to study your local market, trends, shifts, data and economics to ensure you are well up to speed with exactly what is happening in the micro factors of your local market. Find a local expert like RedBrickz who have been working with landlords and investors for a generation.

Right Team

Making sure you have a good team behind you is important in this changing times, as the masses are stepping back for a reason. Increased volatility brings increased risk and only the experienced stay on the front lines.

Perfect Timing

Timing is everything! Get liquid, get educated, take advantage where you can. The Gold Rush presents the best time in history to be a property entrepreneur. When you can work with the masters in the trade and execute with timing, the opportunities for you are endless

This window of opportunity will soon start to close, and we strongly suggest it is something to explore through 2020.

Tighter regulations on HMO Licenses mean it’s getting tougher to convert a property into an HMO. HMO’s still bring a great investment opportunity today and you can achieve this on a small scale by investing in single residential properties or on a larger scale by converting commercial properties into residential blocks, multiplying rental revenues whilst increasing the value of your property investment.  We are not talking about new builds but HMO Conversions, which reduces planning permissions, regulations and more importantly time and money.

3 Reasons to Invest in HMOs

01

Demand

  • 1.8 million full-time students in UK and around 30% rent in HMOs in their final years of education.
  • It’s traditionally a British thing to do
  • HMOs are cheaper to rent compared to purpose built rented accommodation.
  • Government has removed the limit on the number of students that can enrol at Universities which forecasts an extra 50,000 per year.
02

Supply

  • Councils are turning down more HMO applications which means there will be fewer being created which gives a rise to an opportunity to get in at the right time.
  • An HMO license on a property today will be worth more in the future.
03

Returns

  • Simple Maths: HMOs achieve better ROI than Buy To Lets (~5% Vs ~10%) Thats double on a good investment.
  • HMOs generate cash flow quickly giving you a recurring monthly passive income
  • There is no other property letting investment strategy within the UK that can offer over 9% returns.

HOW DO I GET STARTED?

If you are serious about capitalising in the year ahead, contact RED BRICKZ PROPERTY MANAGEMENT and start taking advantage today for a brighter future tomorrow.

Don't Miss Out

” You don’t want to look back 5 years later thinking i should have done it back in 2020 “

TESTIMONIAL

I was sceptical in the beginning and took a risk.  That was 3 years ago.  Now i am investing in my 4th HMO with RedBrickz. H. Williams Private Investor

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