Investing in Houses of Multiple Occupation
Houses of Multiple Occupation present great investment potential. There is always a market to rent, whether it be students or young professionals, and the returns on your investment can really be great.
But you need to invest wisely, and do your homework before jumping in. This is where Properties Discounted can help you. We will look for the best properties for you to invest in, taking into consideration:
- Your budget and aims
- The area a property is in
- Access to amenities
- Ability to rent in the area
- Potential rental return on your investment
So what is an HMO?
A House in Multiple Occupation (HMO) is an entire house or flat that has been let out to three or more tenants who form two or more households and share a bathroom or toilet and a kitchen. According to the definition of household, members of the same family living together in a location make one household. An HMO property contains non-self-contained accommodating units. Self-contained accommodating units have separate kitchens and bathrooms used exclusively by the household living within those units. But if the occupiers have to leave their units to access any of these amenities, then it cannot be called self-contained. In addition, if a property is used by the tenants as their only or main residence, then it will be classified as a House of Multiple Occupation. If your property comes under any of the above mentioned categories, you need to apply for an HMO property license.
Why buy a House of Multiple Occupancy?
Houses in Multiple Occupation are attractive for investors for a number of reasons.
- The biggest attraction for investors in HMO property is the cash that they generate by letting their investment properties to sharers. As high as 300% of the income from self-contained houses can be generated by converting to HMO, however an average of 100 % additional income is the norm.
- With the additional cash flow, investors can further invest in property or use it elsewhere. Along with additional monthly premiums, long term capital growth is another fruit when you decide to buy a House of Multiple Occupation.
- Another benefit of HMO is that you start receiving returns even if all the rooms are not filled. Similarly, if you are protected against the loss of returns in case one of the tenants leaves. It is highly unlikely that all the tenants would leave simultaneously; therefore you don’t have to suffer from the loss of total returns.
Properties Discounted work directly with you to find affordable property which is suitable as a HMO.
In some cases, landlords choose to invest in a desirable area which they couldn't afford to live in themselves. You might look into the possibility of purchasing an investment property as an HMO and securing a future home in the desired area. After years of premium cash flow, he can then reclaim the property from the tenants and convert it for residential use. This is something we can advice you on. We have a team of experts available 24/7 to guide you through the process and help you find an HMO investment property which is most suited to your budget and needs.
Investing in an HMO
If you are willing to invest greater amounts of money, Properties Discounted can help you research the prospects of buying investment properties in good areas. Those properties are expensive, no doubt, but they pay off soon because you would find professional sharers easily who are keen to live in such desirable locations. You will easily see how satisfied the busy professionals are. Besides, these premium services in high standard HMO property will get you premium rents. Properties Discounted list a great deal of houses in the most discoverable areas, but at discounted prices, making the return on your investment even better.
The downside of investing in an HMO is that it needs higher maintenance standards and costs. But the enhanced monthly cash inflow literally outweighs any nuisance caused by more maintenance.
You can even do away with maintenance efforts and cost once you have proper system in place for managing your HMO property. Properties Discounted can advice you on every step of the purchase process to make the best investment for your portfolio. If you are an investor willing to innovate, then sit back whilst we calculate the possibilities of buying an investment property and converting it into a House in Multiple Occupation. start one at a time, and I am sure you would like to replicate your success.
