Ten Percent Plus Buy to Let Yields in Cambridge For HMO Investors Investing in a property and letting it as a multi

room let can offer a great ret urn on the capital employed. Unfortunately if such a project is not managed prof essionally it can also expose the investor to significant penalties, fines and e ven a custodial sentence. This article explains how to avoid these pifalls and m ake a success of investing in HMO's Cambridge, Cambridgeshire, UK, July 11, 2012 -- Investing in a property and lett ing it as a multi room let can offer a great return on the capital employed. Unf ortunately if such a project is not managed professionally it can also expose th e investor to significant penalties, fines and even a custodial sentence. Properties occupied in this manner are known as houses in multiple occupation (HMOs ). Depending upon the local council regulations some will need licensing. All HM Os will need licensing if they have 3 or more stories (including basement, shops or loft conversions) housing 5 or more persons forming 2 or more households. Even though there are additional issues involved investors should not be put off by licensing or the investment needed to ensure properties are safe and warm. T hey should however seek professional advice. Terry Lucking an experienced Cambri dge lettings agent is pleased to help investors understand what is required to s elect, prepare, market and manage a multi let investment professionally and safe ly. Demand for well presented professionally managed rooms in Cambridge is very high . It is not confined to solely to students who want to rent rooms. The key is se lecting a property that will work as an HMO. This is not so easy and requires so me experience in the HMO market and also of the specific location being consider ed . As more investors enter this market the competition for the best tenants is grow ing. Providing tenants with a great living experience is essential in Terrys opin ion. To find the right property Terry often visits 20 properties before finding the one where the floor plan allows for sufficient space for the changes that ne ed to be made and the accommodation to be offered. If done correctly the rewards for the property investor can be extremely worthwh ile as this real example of a property Terry was involved in shows. Ashvale Cambridge HMO Property 14.7% Return on Capital Employed based on a 25% deposit Net income pre tax 14k Gross capital used 94.7k 8.3% Return on Capital Employed based on a cash purchase Net income pre tax 22.5k Gross capital used 272k What Is Involved in Setting Up An HMO? A fire risk assessment will look at fire alarm, fire containment and easy keyles s clear passage escape. In most smaller HMOs an interlinked mains powered fire de tector system will be sufficient for notifying tenants if there is a fire. Fire doors with intumescant smoke seals and mechanical closers will be required for a ll bedroom and kitchen doors to contain a fire. All bedroom and external door lo cks must be keyless exit type. Control of all common areas of a multi room HMO is the landlords responsibility n ot the tenants. This includes the hall, stairs, landing, kitchen, bath/shower ro

oms and the garden. It is the landlords duty to ensure there are clear rules relating to the tenants use of the common areas. A landlord must check the property frequently to ensure these rules are not being ignored. Terry recommends including these rules in th e tenancy agreement and having a notice in the kitchen as a reminder. It is also the landlords responsibility to keep the common areas clean and free o f food hazards. Again rules should be added in the tenancy agreement. Terry reco mmends a landlord or a cleaning contractor visits at least once each month and t o ensure all common areas and surfaces are kept clean. Terry Lucking of Belvoir Lettings Agency Cambridge recommends investors to take advice from a qualified, independent source only. Terry believes anyone or busin ess benefiting from the sale or introduction of a property to an investor is not able to offer unbiased advice as they are being influenced by other factors and not putting your interests first. For example most people would only buy a holi day from a travel agent who is a member of ABTA. Terry recommends propspective l andlords to only instruct a letting agent who is a member of ARLA. For more information contact Belvoir Lettings one of the leading letting agents in Cambridge. Terry Lucking offers free advice and free property visits to all i nvestors who are considering buying in Cambridge. Contact : Terry Lucking Belvoir Lettings Agency 143 Victoria Road, Cambridge, Cambridgeshire, CB4 3BU 01223 352225 terry.lucking@belvoirlettings.com http://www.belvoirlettings.com/Cambridge