10:52 AM, 2nd March 2011, About 13 years ago 13
Robin Pilley invests into HMO’s (Houses in Multiple Occupation) in the Haverhill area and regularly achieves up to 16% yields, he is also a Director of CXG Property Services, which is a Letting Agents and Property Sourcing Company. We’ve asked Robin to share his story in a four part series as these yields are so good. This is the first article in that series.
I became a property investor just 5 years ago when I acquired a couple of ex-local council 3 and 4 bed houses as investments to supplement my pension pot. I was a retailer at the time. I saw the potential in letting them by the room and placed a small advert in our local newsagents, advertising rooms to rent for £75 per week. We could have filled our first property 5 times over as in the first weekend we had over 30 calls applying to our ad. For a 50p newsagents ad I had identified a market.
The cost of 3 bed properties was under £100,000 and with a 15% deposit our mortgage payments were approximately £300 per month and the rental income was £1,300 pm which generated a very attractive return. I can still buy these very same properties today for between £100,000 and £120,000 and achieve rents of £1,300 to £1,600 a month.
At that time I purchased the first couple of properties with no understanding of HMO’s, Housing Benefit/Allowances, yields, fire and other regulations but I quickly recognised that property was a way in which my financial objectives could be achieved and I also had a passion for property and business.
I therefore persuaded my brother to sell our retail business of 5 years standing and put the proceeds into purchasing more property. This enabled us to build up a joint property portfolio of 10 properties earning us £10,000 a month net of mortgage interest. Our mortgage broker advised that with the yields we were obtaining he had a number of clients who would be interested in the model that we were developing. Here was our new business venture staring us in the face and CXG Property Services was born.
More to follow next week………………
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