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Property Investment Opportunities – Why You Should Invest in HMO Property

Landlords are sometimes deterred by the thought of investing in an HMO (house of multiple occupancy). There’s often a mistaken belief that these types of property are complex to manage and come with off-putting legalities and additional responsibilities.

The truth is that HMO properties are one of the most effective ways to secure a great return on your investment – and can potentially increase your rental yield by a significant margin. Here’s a few other reasons why HMOs should be seen as great property investment opportunities.

Investing in Property in the UK – The Benefits of HMO

  • Reduced financial risk. When renting a property to one individual, if they don’t pay rent on time, that’s 100% of the rent you’re unable to collect that month. However, if you’ve got several tenants in a property, this risk is reduced. For example, if you’ve got four tenants living in one house, and one fails to pay on time, you’ve still managed to collect rent from the others, which equates to a 75% payment. This ensures that you’re still able to pay the mortgage and bills, and won’t have to dip into your own bank account.

 

  • Property is in high demand. As the media frequently asserts, the UK is fast becoming a nation of tenants. Demand for rental property has never been so high – and there’s a growing market of people who are actively seeking HMO properties to live in; particularly among the student and young professional population.

 

  • Easier maintenance. If you’re planning on maintaining and managing the property yourself, it’s a lot easier addressing issues in just the one HMO house than it is travelling around and managing several properties at the same time. A word of warning – if you are developing a property portfolio, and own several houses, it makes good sense to work with a property management company; otherwise you’re letting yourself in for an eye-watering amount of work!

 

  • It’s a higher profit strategy. Quite simply, you’ll make much more profit from a good HMO than you would from a single let. HMOs are great property investment opportunities – and if you identify the right house for the job, you should be able to bring it to standard without spending too much money upfront. Once you’ve repurposed the property to suit your tenants, you’ve then got a house that earns significantly more monthly rent than standard buy-to-let properties for sale.

 

  • You can worry less about property prices. With single lets, you’re always likely to have your eye on the property market. After all, the single rental income is unlikely to provide a huge income, so you’ll want to be sure that your investment is generating money in the form of capital growth. With an HMO, you won’t need to focus so much on property prices; as your monthly income will be much higher – earning you more profit in the short-term.

The Buy2Let Shop

If you’d like to find out more about investing in HMO property, or are seeking buy-to-let property for sale, talk to The Buy2Let Shop. We’re a team of professional property investment agents in London, and we’re here to offer advice and support – identifying great investment properties in London and across the UK. We have a range of great houses and flats on our books, which aren’t currently on the general market, and we also offer assistance with buying a house at auction. To find out more, simply visit The Buy2Let Shop site today.

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