Lansdowne Square, Gravesend
1-bed BTL - The property that taught me why HMOs deliver better returns
The Learning Journey
I bought this 1-bed flat in Lansdowne Square, Gravesend, in 2007 during the property boom - my first buy-to-let investment. It's been a solid performer, generating £850/month rent with reliable tenants and minimal voids. But it's also the property that taught me the fundamental limits of single-let BTL investing.
The BTL Reality Check: This property generates approximately £10,200/year gross rental income. After mortgage, service charges, insurance, and maintenance, the actual cashflow is modest - roughly £200-300/month net. It's passive income, yes, but it's not wealth-building velocity.
Compare this to Gladstone Place: My 6-bed HMO generates £38,000/year gross (nearly 4x more) from a similar-sized property footprint. The HMO requires more active management, yes, but the returns justify the effort. Lansdowne Square taught me that BTLs are fine for capital appreciation and modest income - but if you want cashflow that actually moves the needle, you need to optimize revenue per square foot. That means HMOs or serviced apartments.
What This Property Taught Me
BTL Cashflow Limitations
£850/month rent sounds great until you factor in mortgage (£500+), service charges (£100+), insurance, maintenance, and voids. Net cashflow: £200-300/month. That's £3,600/year - nice, but not life-changing.
Revenue Per Square Foot
A 1-bed flat rents for £850/month. A 6-bed HMO in the same building footprint could generate £3,000+/month (6 rooms x £500 avg). The HMO strategy maximizes revenue from the same asset size.
Capital Appreciation vs Cashflow
Lansdowne Square has appreciated significantly since 2007, but I can't spend capital appreciation. I learned to prioritize cashflow-first strategies (HMOs) while keeping BTLs for passive legacy holdings.
Tenant Stability Trade-Off
BTLs are lower maintenance - one tenant, one contract, less turnover. HMOs require more management (6 tenants = 6x tenant issues), but the revenue premium justifies the effort. Pick your trade-off based on goals.
The Numbers: BTL vs HMO
This side-by-side comparison shows why I shifted focus from BTLs (Lansdowne Square) to HMOs (Gladstone Place):
| Metric | Lansdowne Square (BTL) | Gladstone Place (HMO) |
|---|---|---|
| Property Type | 1-bed flat | 6-bed HMO (converted from 3-bed) |
| Gross Annual Rent | £10,200 | £38,000 |
| Net Cashflow/Year | ~£3,600 | ~£18,000 (estimated) |
| Management Effort | Low (1 tenant) | Moderate-High (6 tenants) |
| Occupancy Rate | 95%+ (stable) | 95%+ (rolling vacancies) |
| Strategy | Capital appreciation + modest income | Cashflow maximization |
Key Takeaway:
Both strategies work, but they serve different goals. BTLs like Lansdowne Square are excellent for passive, low-maintenance income and long-term capital appreciation. HMOs like Gladstone Place are for investors willing to accept higher management complexity in exchange for significantly higher cashflow. I keep Lansdowne Square as a legacy holding, but new acquisitions are HMO or SA focused.
Why I Still Own It
Sentimental value aside, Lansdowne Square serves a strategic purpose in my portfolio:
Capital Appreciation
Property values have increased significantly since 2007. While cashflow is modest, the capital growth has been solid - likely doubling the property value over 18 years.
Portfolio Diversification
Not every property needs to be a cashflow monster. A mix of BTLs (stable, passive) and HMOs (high cashflow, active) balances risk and effort across the portfolio.
Low Management Burden
With one tenant on a 12-month+ lease, this property requires minimal time investment. It's genuinely passive income - perfect for keeping alongside more hands-on HMO operations.
Future Optionality
The property retains HMO conversion potential if market conditions change. Having both options available - continue as BTL or convert later - keeps strategic flexibility without forcing a decision now.
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