'I have 150 buy-to-let properties: here's how I choose tenants'
05-31-2015
Jim Haliburton, the self-styled 'HMO Daddy’ who gets up to 35pc returns, gives advice on picking which tenants to pick and which to reject
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The big returns in buy-to-let have for years been coming from “HMOs” – houses of multiple occupation – and the interest in this form of property investment has soared thanks, in part, to successful exponents such as Jim Haliburton.
He's sparked controversy about his no-nonsense approach to profiting from property – and the tenants who rent it.
Mr Haliburton insists that in a world of rising property prices and comparatively stagnant rents, the only way to make “serious” returns is to carve up suitable properties into studios or bedsits.
All Mr Haliburton’s 150 properties are in the West Midlands in centres such as West Bromwich, Dudley and Wolverhampton, which he knows intimately.
But the work is hard, warns Mr Haliburton. Of his total 840 tenants almost 500 are unemployed and on a variety of benefits.
Some won’t pay rent “as a matter of course”, he claimed.
In some cases he gets tenants to agree to rent being held and paid via a credit union.
On other occasions the rent is paid directly by the local authority. But chasing money “sometimes from tenants who drink or have other issues” is an "ongoing problem".
Here Mr Haliburton’ gives advice on how to choose tenants. He says the hardest to vet are the unemployed as they often have no references.
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He is branching into formerly commercial property, too. He cites as an example an old pub which he bought for £80,000. The cost of refurbishing it and splitting it into 14 studios was a further £120,000. After that, each studio lets for about £100 per week –generating a total income from the block of £6,100 per month, or just over £70,000 per year.
That gives an astonishing yield of 35pc.
Jim Haliburton