Do you invest in HMOs as part of your pension plan? Property investment in general, but particularly HMO property investment, can provide an opportunity to work towards a more flexible and profitable pension pot.
In this blog post, we’ll cover HMO property investment as a form of pension and my top tips for how to start growing your HMO business towards a sizeable pension pot.
HMO Property Investment as a Form of Pension
The recently released 2021 English Private Landlord Survey has revealed that the majority of UK landlords choose to invest in property with the long-term aim of it forming part of their pension.
Among landlords, there’s also a preference for investing in property rather than other investments and to use it as a means to supplement income or earnings. And interestingly, 48% of landlords viewed their role ‘as an investment for rental income’ compared to 27% for capital growth.
Some landlords are also planning to keep their property investments to provide an ongoing income during retirement. This shows the value in property investment, and HMOs are particularly well placed for this kind of long-term investment as there’s an opportunity to earn more in both the short and long term!
5 Tips to Grow Your HMO Business Towards a Sizeable Pension Pot
While there’s the opportunity to create a sizeable pension pot through HMO property investment, there are still a number of things to keep in mind and a range of areas you’ll need to work on to start growing your portfolio today.
Here are five of my top tips to help you grow your HMO business towards the sizeable pension pot you’re striving for!
1. Improve Finding and Funding Strategies
To help you get in a position where you can find and fund HMO deals, you need to work on your strategies for these parts of your business. For starters, formulate a plan for finding deals. Write this down, and set goals to keep yourself accountable. You need to make sure you’re setting enough time aside to effectively tackle this.
Then, to get in a position where you can always access the money you need to buy the properties that you want, work on mastering the four pillars of funding, including knowing your numbers, raising private finance, recycling capital, and accessing HMO mortgages.
To start with, focus on what you need to improve on the most. Then, once you get to the point where you can tap into all four pillars at any point, financing your deals will no longer be an issue, and you can start growing a sustainable HMO business.
2. Implement Structure
Structure needs to be implemented within every area of your business to help you become more profitable, efficient, and productive. This involves writing down all of the pieces on how to deliver certain tasks. Create a plan for what areas of your HMO business you need to build a structure for.
To really get the most out of your business, there are even solutions allowing you to work less, while generating better results. This includes batching your processes and finding areas you can eliminate, simplify, automate, and delegate. Then, this will allow you to free up more time to work on the higher priority tasks and activities, which will in turn help you scale your business.
3. Reinvest Profits Into Systems and Staff
Instead of only investing into your next property straightway (or paying yourself a wage), reinvest your profits into systems and staff. Of course, you want to build your property portfolio and generate more cash for your pension; however, you need to reinvest into these areas in order to grow your HMO business.
This will help you continue striding towards scaling your portfolio and will even help you be able to eventually step out of your business!
4. Surround Yourself with the Right People
The people you surround yourself with can help you accomplish your goals. There is a significant amount of value and power in building a diverse network, so make sure you put time into building relationships in HMO and business networks.
If you haven’t already, join our Facebook Group The HMO Community, which is packed full of people just like you. You can get support, insights, and advice right from people with hands-on experience in the HMO industry. Come join us!
5. Build a Roadmap
In order to create a sustainable and profitable HMO business for the long term, there are a number of key areas you need to focus on. These crucial steps include doing your own due diligence and research, creating and updating your business plan, and setting KPIs and priorities.
Focus on how you can keep your business moving forward. Building any business is an evolutionary process, so create a roadmap and keep coming back to it as your business grows.
A good place to start is by becoming a member of The HMO Roadmap! We have in-depth and practical lessons, case studies, and worksheets to help you start, scale, and systemise your HMO business. Using these valuable resources can help you take your portfolio to a sizeable pension pot!
About the Author:
Andy Graham is the founder and the lead trainer at The HMO Roadmap! He is also the co-founder of The HMO Mastermind and Smart Property, a specialist HMO property investment and management company. He writes as a regular columnist in different magazines about a variety of HMO topics and is the host of The HMO Podcast! Follow Andy on Instagram!