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How to Replace Your Job with a Passive Income and Build Your Pension Pot

The dream of making a substantial passive income that builds a pension pot, doesn’t come with a basic pay job, with that you will only be stuck in a rat race until your 65 wishing you invested your savings in something more substantial, such as property.

Are you the common 9-5 Joe, looking to achieve more out of life?

A lot of people end up spending their entire lives stuck in a 9 to 5 job they don’t particularly enjoy and just pay the bills, enjoy a little and build up saving little by little all their lives into a very low interest paying ISA which the banks use to make more than you. This strategy will hardly give you much return on your efforts and investment nor the financial freedom that you may want.


There’s a commonly known saying “You can never lose out on property”, and we stand by that.  But if done well you can make a lot of money.

You don’t need to buy an investment property out right nor fund the renovation to increase its value for resale or to rent it out. There are many ways to cleverly finance your property portfolio.

It turns out that investing in property is nowhere near as costly as people imagine. You don’t need a vast sum of money to get into the business – just a minimum investment as a 20-25% deposit and enough equity to finance renovation work. And once you start the ball rolling, the gains build fast and you will see yourself doing one project after the other and there will be no stopping you.

Today we’re going to look at a few principles for building a property investment portfolio and the HMO strategy in particular and how it can bring you in the passive income to replace your job and build equity for your dream pension pot.

1.  Committing to the business

Getting into the HMO market and making a success of it requires a full-time commitment. A lot of investors try to replace their job with passive income by working by day and then investing in property by night, but this is rarely a path to success. If you want to beat everyone else in the market, you need to make it a full-time occupation. Half measures simply won’t suffice in the long-run.

Going “all in” is something that all entrepreneurs have to do at some point in their careers. As an HMO investor, you’re essentially no different. The time will come – usually pretty quickly – where you reject “a job for life” and go for the money you know you deserve.

2.  Understanding the Risks

HMOs or houses of multiple occupancy, are one of the most promising areas of the property market for generating the sort of returns that are likely to get you excited about your future. Offering accommodation for unconnected tenants who share a toilet, bathroom and kitchen facilities can quickly provide the income you need to replace your unfilling day job.

HMOs aren’t an airtight strategy to make money. Some investors actually lose capital if they fail to find genuine opportunities in their area.

Working with companies like Red Brickz that have over a decade of experience help to reduce that risk and provide valuable insight that would otherwise cost people a lot of money to learn over years of risky investment.

Investors, however, can mitigate the likelihood of losses by conducting proper research to find out what the local market demands. As with any commercial opportunity, you need to define your target audience, and then figure out what they want.

In areas where there is a high population of young professionals, you often find a lot of demand for maisonettes and studio flats. In communities with young couples, people want homes that offer communal outdoor areas. The trick is to find out where demand is coming from and capitalise on it.

3.  CashFlow

Most people on modest incomes don’t have a significant cash pile they can rely on to see them through the first few years of their property investment careers. More often than not, they need money now. Cash flow is a real and immediate issue.

Investors typically believe that they need to save capital before they can begin making money from rental units, but this isn’t true. The rent-to-rent model lets you rent out the property from the owner of serviced accommodation and then get a second renter to pay a premium, generating instant profit. This setup allows people to start making a passive income immediately, instead of having to accumulate sufficient funds for a deposit.

4.  Raising Finance

While starting on an HMO investment career is low-cost, some people may struggle to raise finance on their first deal. As with any investment project, there’s a steep learning curve. You need to learn the tricks of the trade to make the process of acquiring capital straightforward.

Some investors, for instance, leverage their existing accommodation to drum up funds. They approach people with capital in adjacent properties and ask them whether they’d be willing to invest in extensions and then share in the profits from the added rental income. Often, if they have money lying around, they’re more than willing to put up the capital.

These days, many investors use social media to drum up interest in HMO projects. Investors go to network events and conduct meetings, showcasing their property portfolios and telling other people how they can make money through joint ventures. Ultimately, you get capital by proving to investors that you can give them what you want. Once you get the ball rolling, there’s no stopping it.

5.  Switching Priorities

When you decide to replace your job with passive income, you’ll likely receive some pushback from the people around you. Often, they won’t understand why you want to leave a stable job for some “hair-brained scheme.”

Switching priorities is a tough thing to do. Our education, parents and colleagues all programme us to take our lives down a particular route. It is only when we break out, though, that things work out differently for us. We finally realise our potential.

6.  Quitting Your Job

Quitting your job can be a terrifying prospect, but it is something you need to overcome if you’re ever going to replace your current lifestyle with one that you want. Some people put their letter of resignation on their fridge door so that they can remind themselves of their commitment to change their lives every time they go to get food. Gestures like this make it more real. Often you can start generating substantial income after just a few months, giving you the confidence to quit your underpaid day job.

7.  The Transition to Properties

Transitioning to properties involves some work upfront. But you don’t want to replace your current full-time job with another better-paid job that takes up your time. That undermines the entire concept of generating passive income.

At first, you’ll need to do a lot of donkey work. But over time, smart investors build systems that save labour and free up their time. Once you get to around twenty-five properties in your portfolio, you can hire a manager to take care of the day to day stuff for you. You can also use management software that automates HMO admin and utilise customer service reps who can deal with clients on your behalf. Compared to the money you generate through rent, these costs are small.

8.  Retirement

Many people who go into HMO investing do it because they want to create a stable retirement income. But the more they get into it, the more they enjoy it. The thrill of making deals is real. Eventually, the very idea of retiring falls by the wayside, and they just start loving their life. Life is for living, they say, not for counting down the years to get your pension.

“The UK’s HMO market is worth over £2 Billion”

1000’s of Investors are enjoying OVER 10% YIELDS

  • £1,859 p/m PROFIT from an HMO
  • Properties from £150k + Conversion Costs
  • Portfolios with 200+ tenants within 10 years


See our work. We have a proven track record with REAL CASE STUDIES in our portfolio

You can become a savvy investor with HMOs


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