Spotlight on Robin Pilley, HMO investor – Part one of a four part story

Spotlight on Robin Pilley, HMO investor – Part one of a four part story

10:52 AM, 2nd March 2011, About 11 years ago 13

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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………………

  1. You are herePart One
  2. Part Two
  3. Part Three
  4. Part Four



Comments

by philamena george

14:01 PM, 12th March 2011, About 11 years ago

Hi Robin
I have just bought a 3 bedroom 2 story semi that is perfect to convert into 2 x 1 bedroom flats, applied and now have planning permission. The flats would rent for £500 -£550 each so good return mortgage payments will be just less than £300 per month.
But a friend has suggested to let 4 rooms at £65 per room making £1200 per month..... I have not managed a HMO before and heard it was a lot harder to manage due to the higher turnover of tenants, so I am a little sceptical..I would like
to know if I decided to go down the HMO route would it be wise to have inclusive of gas, electric, rates and broadband, charging £75 per week?
Would you fit meters in each room?
You have stated that your tenants split the bills, would this not cause the unrelated tenants squabbling?
Do you have a common room for your tenants?
Do they share kitchen and bathroom?
Do you furnish the property?
Whats your average stay?
Would be helpful if you could pass on the electric/gas supplier?
Thank you
Phil

by Ian Simpson

21:48 PM, 13th March 2011, About 11 years ago

I had been initiating a new mortgage with Paragon, as recommended on this site. I note that their "competitive" mortgage packages have jumped dramatically in the last week or so - there was a 3.3% deal available at the end of Feb, the best one they have now is 4.3% - and on a 65% LTV - are there any better deals out there?

by Mark Alexander

21:55 PM, 13th March 2011, About 11 years ago

Happy to introduce you to a good Broker if you would like to give the office a call in the morning - 0800 374611.


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