Why Smart Investors Are Buying Right Now (and Everyone Else Is Quitting)

There’s a lot of fear in the market right now. Everywhere I look, investors are sitting on their hands or even thinking about selling up. The media is full of doom and gloom, interest rates are high, the Renters Reform Act is looming, and costs are up across the board.

But here’s the truth - this is exactly when real opportunities appear. When everyone else is frozen, the smart investors are looking the other way.

In this episode, I dive deep into why I genuinely believe we could be standing in one of the best buying opportunities in decades. I’ll unpack what’s really going on with the market, how to reframe your fear, and why long-term fundamentals still matter more than ever. 

If you’ve been feeling nervous, waiting for the “right time” to buy, or just unsure what to do next, this episode is for you.

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Transcript

Andy Graham: Hey, I'm Andy. I'm Andy and you're listening to the HMO podcast. Over 10 years ago, I set myself the challenge of building my own property portfolio. And what began as a short term investment plan soon became a long term commitment to change the way young people live together. I've now built several successful businesses, I've raised millions of pounds of investment and I've managed thousands of tenants. Join me and some very special guests to discover the tips, tricks and hacks, the ups and the downs, the best practise and everything else you need to know to start, scale and systemise your very own HMO portfolio now. 

Andy Graham: There's an awful lot of fear in the market right now. And everywhere I look, property investors are either sitting on their hands or considering getting out of the market completely. Everybody's waiting for things to feel better again. But the truth is, this is exactly when the real opportunities appear. Because when everybody is looking in one direction, the smart investors know to look the other way. Today I want to talk to you about why we could be looking at one of the best buying opportunities in a couple of decades. If this is you, if you're worried, if you're waiting, if you're unsure about property, today's episode is definitely one to stick around for. Please sit back, relax and enjoy today's episode of the HMO Podcast. 

Hey guys, it's Andy here. We're going to be getting back to the podcast in just a moment, but I wanted to very quickly tell you that we have got a huge sale on at the HMO Roadmap. For a very short space of time, you can take advantage of a massive 20% discount off our premium package and that gives you absolutely everything that we have got. And trust me, there is more than you could possibly imagine. We are, by far the largest vault of training and education and content and resource for HMO investors anywhere in the world. And it's not just built by me, it's built by you guys, our community. It's, unbiased, it's transparent and it covers absolutely everything and it is so incredibly rich in detail and value. Just head to thehmoroadmap.co.uk right now, grab yourself that 20% discount and start scaling your HMO property business today. Let's get back to the show. 

Okay, welcome back. I am of course your host, Andy Graham. Every week I am here to dive into the world of HMO property investing and development. The wins, the mistakes, the lessons, the things that actually make a difference. And right now, the market is at a turning point, you can feel it. The media is full of negativity. Landlords are selling up, projects are being shelved, and even experienced investors are questioning whether property still makes sense. But that reaction, it's exactly what happens at this stage of the cycle when confidence drops and fear starts to kick in. People step back. Real investors do the opposite. Real investors look in the opposite way. They see the opportunities between these cracks. The reality is prices are starting to soften, sellers are blinking, and there is less competition in the market right now. That is when you can finally buy quality assets at sensible prices. 

So in today's episode, I want to unpack with you why this market, with all of its challenges, might actually be the best we've had in years, in decades to buy, build and, hold property. So let's get into it. Let's start by asking why everybody is looking away. What is the problem? What are the challenges? Well, let's be fair. There are quite a few reasons and it's not unreasonable, that people are feeling nervous right now. The budget's on the horizon. Realistically, it's going to squeeze landlords and business owners. Again, likely to be catastrophic. But it's another round of extra tax, less relief and just more hoops to jump through. Then there's the Renters Reform Act. Still uncertain what that's going to look like, but it's unsettling. Corporations are buying up stock. Tenants are expecting more from us than ever. Refurbs and running costs are still climbing. Interest rates are still very, very high. Let's be real, margins are pretty tight. So, yeah, on paper it doesn't look great, doesn't look pretty at all. And, for a lot of people, that's enough to stop them in their tracks. And that's what we're seeing. But here's the thing, that reaction is completely predictable. And predictable decisions rarely lead to exceptional outcomes. So I want to help you reframe this fear because when you look at the past headlines, most of what people are, being put off by is short term noise. It's not the long term reality. Let's take the budget. It hasn't even been announced yet, but plenty of landlords are already talking about selling up as a further consequence to these proposed changes. When we actually model the numbers, look at the finances and the operating costs and rent levels, most landlords are in a far stronger position than they really think. They're just frustrated. I'm frustrated, you're probably frustrated. And I get

00:05:00 Andy Graham: it, I totally understand why. But you really have to look at the numbers and the data, to ask yourself whether or not it makes sense to step back. More importantly, the long term play hasn't changed at all, not one iota. Buy well, hold, collect rent, increase the value and boost profitability over a number of years. Refinance and repeat the process that has not changed, changed. It's a little bit like buying into the stock market. Stocks go up and down, property values and profitability will go up and down. And it is all linked to the economic cycle. But if you've got a long term view, the advice is and always has been to buy and hold. If you expect the best results in the first 12 and 24 months, you are probably going to be disappointed. But to get the results in the first place, you have to be in the market. And to make sure that you do get good results, you have to project over a long enough time horizon. 

Let's consider the Renters Reform Act. People are worried that it will make managing property impossible. But if you're already running high quality compliant homes and you're a good landlord with good tenants, then you're doing 99% of what is being asked of you. Are things going to change? Yes. Will the system work in a slightly different way? Yes. But are any of these challenges insurmountable? No, of course not. A lot of this legislation already exists in places like Scotland already and landlords are just fine. There will be some adjustment, there will be some adaptation. It won't be quite as easy and straightforward as it used to be, but it will be just fine. And again, if you've got a long enough time horizon, all the cost to this and all of the work and challenges involved, it will level out over time. 

Let's talk about the big corporate takeover, BlackRock, Lloyds bank and these huge institutions buying into the market. A lot of people are scared about this. A lot of people think that it is pushing the small landlord out. And I can tell you right now the only thing that that will do is push rental prices and push property values up. Both of which are good for you. As a private landlord, they're not competing with us. They are playing a completely different game. They want portfolios at scale, they want institutional grade ass. We are focusing on smaller, higher yielding properties. And we are agile, we're nimble, we are able to provide a bespoke service. And let's not forget that the likelihood of tenants preferring their landlord being either a BlackRock or a Lloyds bank versus us private landlord is exceptionally low. 

Ask yourself right now, who would you prefer your landlord to be? Do you think that getting through to your landlord, if it's Lloyds, is going to be easy to get a problem resolved? Do you think that going to be letting anything other than big white boxes? Almost certainly not, because at that sort of scale it just isn't possible to operate businesses in the same way. Let's talk about conversion costs and OPEX costs. Yes, refurbs and operating costs are still very high and everybody is feeling that squeeze. But it's forcing good investors to get sharper to value engineer projects, to think more intelligently about layouts, simplify the specs and manage build better. And here's the exciting bit. I think AI is going to turbocharge a lot of the efficiency here. AI is already reshaping how we can run property businesses. It's cutting admin, automating, communication and can manage maintenance better and analyse data better. And that's only the tip of the iceberg. In the long run, AI is going to drive OPEX down and landlords who embrace it early will run leaner, faster and more profitable operations. 

But when you pair that with a business model that's genuinely irreplaceable. Let's think about it for a second. AI will never have the ability to buy and to refurbish and to manage properties and rooms in the same way. Then I think that that combination is pretty incredible when you look ahead. Yes, again, there are going to be challenges. But I want to be in a business. I want to run a model and a strategy that is protected from AI. I don't want something that could be wiped out overnight with a new piece of technology. And I still absolutely and firmly believe that buying and refurbishing and renting houses is one of those irreplaceable business strategies. 

Before we move on, let's just quickly talk about interest rates. They're still high, they haven't come down as quickly as we all hoped and a lot of people have been waiting, waiting for these interest rates to drop. But that's like waiting for the sale to end before you actually go and buy something. People are waiting until it feels comfortable, but when it's comfortable is when the opportunity has already gone. These high rates have created a buyer's market, sellers have become more flexible, competition is lighter and agents are finally calling you back. I've seen investors picking up fantastic deals over the last 6 to 12 months, myself included, because they have been willing to move when everybody else has frozen. And trust me, when

00:10:00

Andy Graham: those rates do ease. And they will, the investors who have been buying and the investors who are refinancing, they will be sitting on an absolute gold mine. And if you think that that's the time to come back into the market because you're going to find properties at, good values and you're going to find it easy, you are wrong. That is when it's going to be very difficult because everybody will rush in, property values will inflate, it will become a seller's market again. And yes, while interest rates might be lower, you will pay for it in another way because you'll be buying assets that are just more expensive and you might just struggle to buy them in the first place. That is why intelligent investors, the contrarian investors, are buying now. They're not waiting. 

Now, alongside this very real fact that we are currently in a buyer's market, I want to bring you back to this idea of thinking long term. The biggest mistakes that I see investors make is thinking short term property isn't about timing the market. It's exceptionally difficult to do that. It's about time in the market. I know it sounds cliche, but it is absolutely true. I've been buying for nearly 20 years now. There's been lots of ups and downs just in that time period. No, there hasn't been a crash. I bought it just after the financial crash. But there have been ups and downs. The idea is to ride through the storms. Just like the stock market. The best time to buy is when prices are low and everybody else is nervous. Not when the market's point, not when everybody else is buying, not when it's speculative, not when you're buying because other people are buying. 

If you buy well, if you hold, if you just collect the rent, if you service your debts, if you continue to improve and build a better business day by day and let your business and all of that effort compound, you will do incredibly well no matter what things look like today. And you will be in the market. If you're not in the market, you can't do any of that. And that's the thing that people overlook. The biggest risk is actually the opportunity cost of not doing anything else at all. Not getting into the market in the first place. And unfortunately I see so many people do this because they are so stifled by the fear and the uncertainty. 

But the long term fundamentals of demand, supply, inflation, population growth, those are all constant and they are the things that you should as a property investor be focusing on if you are looking for short term, gains and that is your only priority, then let me be honest with you. Buying property is not the right business model for you. If you want a combination of some short term gains and cash flow, but are, more excited and more interested in the long term advantages of buying property, then yes, of course this is the right market for you. But it's not about short term gains. It's a very expensive market. The frictional costs are so high and it's very, very capital intensive. So you have to be able to think long term and you have to be able to think beyond all of these challenges that we are currently facing and that we've discussed in today's episode. 

AI is only going to amplify the advantages for efficient operators. It'll widen the gap between those who treat property like a hobby and those who run it like a business. And that's the same for many of the things that we've talked about today. So if your systems are strong and your strategy is sound and you are committed and you do look long term, this is absolutely the moment to get positioned. If you wait, you will almost certainly be disappointed. 

Now, let me caveat. Everything that I have just summarised in today's episode. What this doesn't mean is you can be cavalier right now. What this doesn't mean is that you can just assume whatever you buy will work. What you can't assume is that getting out of a deal will be easy. What you can't do is assume you don't need a contingency. It is very important right now, while the market is uncertain, that you have a contingency for lots of different measures. Let me give you an example. Occupancy has been very high for a long period of time. There is a risk that occupancy could soften. There's some destabilisation in the student market, particularly in the PBSA market. It'll be interesting to see what these big operators do with their empty rooms and empty floors of accommodation that, could disrupt the student market a little bit. 

Now, if you've got good quality accommodation in a good location and it is priced well, you will almost certainly be fine. But if you're peripheral, if your stock's a bit tired, then you might need to make a change. Think about that. When you're buying something, don't expect that just because you're buying it will work well. You still have to make sure you do everything else right. If you're borrowing private finance and adding value through refurbishments and you're planning to refinance at the end to recycle your capital out, just make sure that you have factored in and you've got a contingency for a soft valuation. If that valuation doesn't come in where you want it to, will you be able to pay your debts back? Do you have a solution? The worst thing you could do is overlook that and end up in a pickle. Not be able to pay somebody back, put your security at risk and potentially

00:15:00 Andy Graham: wipe yourself out. When you're developing and you're doing bigger schemes, that becomes increasingly more important as the numbers get a lot bigger. Those sorts of contingencies are incredibly important right now. You shouldn't be factoring in particularly low interest rates on your refinance. I think that we are going to stay in a high interest environment for quite some time. So make sure that you're factoring all of that stuff in. Your numbers probably won't look as good. You probably won't be getting that return on capital employed you want, or that yield you want, or that net cash flow that you really, really, really want. But it is all temporary. If you've got that long term view and you work really hard and you commit and you build a stable asset base and you make sure that you have contingencies and sensible occupancy and void calculations and you have nice margins for your overheads and things like that, you will be just fine. Play the long game, let the market do its work over time and you will be just fine. Not just fine, you will be incredible. You will be so good in 10 to 20 years. You'll thank me for recording this episode, I promise you. 

So there we go, guys, look. The market right now is weeding a lot of people out. There's nervousness, there's some people who might be over leveraged that want to get out. There are the people who've bought and built on hype instead of the fundamentals. Now they're going to get out the market. There are landlords who are tired, they've made a lot of money and they don't want to go through these changes. But the ones who stay now, the ones who adapt, the ones who are prepared to think long term and buy intelligently, they'll be the ones that own the best assets. 

When the market turns and it will, and interest rates drop and that profitability starts to increase, things will look really, really incredible. But you can only be in that position if you buy. Well, today, property doesn't reward panic, it rewards patience and conviction and resilience. So if you're in the market, my advice is to stay in the market. And if you've been sitting on the sidelines waiting for a sign, this is it. When everyone's retreating, this is your cue to step forward. I understand that that is uncomfortable. I understand that that is counterintuitive. But that is the reality. 

That is it for today's episode guys, thank you so much for tuning in. Now, if today's episode hit home, please, please, please do me a favour. Just very quickly hit that follow or subscribe button. Please share today's episode with somebody you think might need to hear this. And please come join us inside the HMO community in Facebook. That is our free group with over 10,000 members, all investing in HMOs. We're there to offer you guidance, support, advice, help. We want to hear your advice and share your experience, too. 

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