You don’t have to be a genius to work out that the hike in interest rates has all but killed the BRRR (buy, refurbish, refinance, rent) model.
For the time being, we’re focusing purely on high cash flow investing.
Housing, energy and water costs have seen the most substantial increase over the last year. The increase in the cost of energy was the initial catalyst for the cost of living crisis.
How do these changes impact you?
Naturally, the costs of running HMOs and short term lets has increased considerably. Whether that be as a result of energy cost increases, the increase in cost of labour and materials for refurbs or the additional % on mortgage rates.
But all is not lost!
It looks like these circumstances are here to stay for a little while so here are our top tips to ride out the property storm and show you that you don’t need to hang up your investor boots just yet! It’s also been implied that there is expected to be a shortage of rental properties due to the economic changes… Cue a surge in popularity of the HMO!
Get smart with your energy efficiency
There are a few things that you can do to improve energy efficiency in your short terms lets or HMOs.
By installing owner-controlled thermostats that can be altered remotely, you can have ultimate control over the property. Just make sure that there is a boost feature for guests or tenants to control themselves. And remember, no one wants to arrive at a freezing cold short term let after a long journey!
Motion sensors are another great way to make your investments efficient. Areas such as kitchens, hallways and landings rarely get their lights turned off. By installing motion sensors, lights will turn off and on automatically and therefore keep costs down.
Take a look to see if there are any grants or schemes that you’re eligible for to help fund your improvements.
Revisit your deal analysis
Factoring in additional and rising costs to your deal analysis is crucial.
Revisit your deal analysers and make sure they’re in line with current rates and refurbishment costs. You won’t do yourself any favours by forcing numbers!
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