I have 3 HMO properties in Exeter. Before covid, business was great, but dwindling university numbers and increased purpose built properties have meant for the last 2 years I’ve failed to get students. Subsequently, I’ve ended up back in the Professionals market having to pay all the bills, and 7% interest rates. On top of that rents are down from £650pppm to £550 due to increased supply and I rarely have more than 3 tenants out of 5 per house. Plus 11% agent fees.
Over the 3 houses I’m losing around £400 a month. Things “might” get better next year as the University returns to normal. 1 house is already signed up with a 20K profit factored in. No bills included makes the difference. 2 remain unlet at present for 25/26 and have been reduced to bargain rates. But wiol deliver a profit if let. If they remain as shared houses, not.
If I sell all 3 in this depressed market, I’ll walk with around £700k before taxes and fees. That was £1m 3 years ago.
Its all a headache and uncertainties whilst Im pretty sure even an idiot like me can get a better return on the SP500 than go through all this. My 20 years mortgages also become due over the next 18 months so I either need to sell up or commit for another 5 years to re-finance.
Im 58 and live in Thailand. I could do with winding down in all honesty.
Its been around 25% with student’s. Now with professionals each house returned just 5k profit over 12 months. Some months up, some down. Not making enough to pay tax lol
No, not really. The best I can do is change from a 5 to a 4 bed, but its primarily a HMO market there. And no guarantees it would let as a 4 bed either, just less money
The £1m value three years ago is a mirage you can ignore.
The £700K walk away you expect is meaningless to us though without knowing how much you purchased for and how much your profit has been in the intervening years. It’s also tricky to advise you when we don’t know how much you’ve got stashed to soak up your current losses.
Your response to my ROI question makes me wonder if we’re talking the same thing. You don’t mention any a/depreciation or remaining mortgage payments.