How Does the Cashflow from HMOs Compare to Buy-to-Lets?

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In the final part of this series with Dale Wild of Pegasus Property Investments and Landlord Funiture Co., Dale and Amy talk about the importance of cash flow over capital gains when it comes to building an investment portfolio and more importantly whether cash flow is better with HMOs or with buy-to-let.

Property Expert Series: Dale Wild from Pegasus Property Investments & Landlord Co.

• Part 1: Introducing Dale Wild from Pegasus Investments and Landlord Furniture Co.
• Part 2: What Projects Are Pegasus Investments Working On and Why?
• Part 3: What Is An HMO?
• Part 4: What Furniture Should You be Providing in an HMO?
• Part 5: What Colour Schemes Work Best for HMOs?
• Part 6: Is it Better to Put Up Blinds or Curtains in an HMO?
• Part 7: What Type of Beds Should Investors Use in Their HMOs?
• Part 8: How Much Should a Landlord Budget to Furnish an HMO?
• Part 9: How to Give Your HMOs the WOW Factor
• Part 10: How To Invest in HMOs
• Part 11: What Do Landlords Need to Know About HMO Licensing?
• Part 12: What Has Been Your Biggest Mistake in Property Investment?
• Part 13: What Has Been Your Biggest Win in Property?
• Part 14: How Does the Cashflow from HMOs Compare to Buy-to-Lets?

Transcript

Amy: Dale, would you say HMOs are better investments than bog-standard buy-to-lets, vanilla buy-to-lets?

Dale: I would, personally, because we just do this for cash-flow.

We do a few things differently to what other investors do, in terms of the investment and how we pay off the debt.

But for us, it is literally about monthly cash-flow and in 20 years time we will have x-amount of millions of pounds worth of property, all paid off because that’s just how we’ve done it.

I mean me and my business partner.

The rent is covered, quite easily. We make decent money, across the portfolio. If we had the same amount of single-lets, then we wouldn’t.

Bear in mind, we’re investing in the North West, where you’re probably not going to see a massive amount, certainly, in Oldham, there’s not going to be any capital gains there or not a great deal.

Amy: Not a huge deal, yeah. It’s not London.

Dale: No, it’s not. I was speaking to a London investor the other day and he said, ‘It’s great’. He’s obviously quite a wealthy guy.

He buys properties and then, he was saying, every five or six years he just refinances, pulls a bit more money out and then goes and buys another one. And I was like, ‘That’s pretty crazy’.

But, everyone is different.

Amy: And every strategy is different. That’s why it’s great to talk to different people and find out what everyone is doing and share techniques and ideas.

Dale: There will be people watching this no going, ‘No no no no no….’

Amy: But that’s what works for you and that’s how you build your business and I know a lot of investors who have followed a similar model and they’re not looking for capital growth.

They’re not interested in spending half a million pounds on a shoe-box in London. They want fifteen properties, they want to own a whole street in Blackburn.

Every investor is different.

As I say, it’s the beauty of speaking to so many people and finding out about their strategies and what works for them because ultimately, we will have investors, who are watching this now, who are going, ‘Perhaps I could adapt my strategies to do this or perhaps HMOs could work for me.’

So, yes, it’s great. Thank you.

So, thank you so much for joining us today, Dale and sharing your experience and everything you’ve been up to.

If you want to know more about what Dale does, you can visit his website or check out his Facebook shop for furniture he does for HMO landlords.

Thanks again, Dale and we will see you soon.

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