Why do people invest in HMOs (house in multiple occupation)? It’s simple: because of the opportunity for the best yield from property investment. The top ten tips for building a profitable HMO portfolio were recently published by Property Reporter - here's our complimentary input on their insightful article.
The Service Offered by HMO Property Sourcing Includes The Top Three Tips:
- Find the right property, with a sufficient size for young professionals and potential for expansion, for refurbishing and renovating into a HMO that will provide the best form of accommodation. Finding the right property is as important as finding the right HMO investment partner - a company that really gets helping landlords, HMO conversions and turning HMO's into a profitable enterprise for the investor.
- Choose the right location - buying a HMO property in the right geographical region is vital - not just the right town or city but the right road - and should include researching the local crime rate, local amenities, schools and the commercial enticement to professionals renting the property. Input should be sought from professionals who know the area extremely well, as the location of a HMO property will offer the investor a "double-whammy" of appeal from both the tenant and investor - a win / win with long-term benefit!
- Suitable tenants – the HMO's location will influence the type of persona of potential tenants. It's worth noting that HMO Property Sourcing only offers tenancy agreements to young professionals and does not serve the student market. With that in mind, the quality of HMO properties has dramatically improved, with HMO investors opting for high-spec living spaces with a rental premium.
These Next HMO-Investing-Tips Offer Real-World, Common Sense Advice:
- Stick to your budget when you're refurbishing - refurbishment costs can easily spiral out of control, especially when you wish to upgrade a property to a HMO, with considerations for health and safety and following building regulations. Make sure your accommodation is scoped specifically with the local market conditions and demands in mind. HMO Property Sourcing can guide you through the process of investing in a HMO property.
- Know your local market - Why would a young professional part with their money? What do they want? Convenience, local shopping facilities, public transport and day-to-day living needs. Does the location offer these? If the HMO your about to invest in does, you're onto a high-ROI winner!
- Understand and meet your legislative requirements - with tighter regulations making HMO investment an area for (trained) specialists, HMO Property Sourcing are not just experts in the field of HMO investment; they're also damn good at turning investment into high-yield returns, without cutting corners or deceiving the investor or the potential tenants of the property.
- Use reputable tradespeople - this goes without saying. Unfortunately many HMO property companies opt for cheap and cheerful, to retain the profit they need to make, to make the investment in the HMO a viable option. Using reputable tradespeople means a long-term investment in maintenance-free, happy tenancies by young professionals. Homes that include "peace of mind" as a minimal standard, are the types of dwellings that include "always-occupied" HMO's for landlords and investors - another win / win..
- Future proof your property build by using durable materials despite the initial expense - in line with using reputable tradespeople, using durable materials as part of your build portfolio minimises unnecessary expense and wasted HMO budget. Although they can be significantly more expensive, using value-based materials and trustworthy suppliers with the highest durability, warrantee and correct function for the task is, by far, the best way to go. You want your investment to yield high returns - this can only happen if the HMO-associated profit is based on quality and measurable standards, that add to the overall value of a HMO property.
- Minimise maintenance costs - inline with the two points above, the more you use reputable tradespeople (look for references and quality of past work) and future-proof with durability, the more you remove the need to constantly check on maintenance costs - another "peace of mind" win. For HMO investors, knowing your property is looked after properly, with care and attention given to every detail, the long-term benefit to tenancy occupation is a palpable return of investment, that every HMO property owner needs to implicitly expect, as a bare minimum. This level of expectancy is a given when choosing HMO Property Sourcing as your HMO investment specialist. Contact us now to discuss which one of our packages is best for you!
- Reversion costs – as and when you wish to exit the HMO investment market, be aware (at the outset) of the potential cost of reverting your property to a non-HMO (house in multiple occupation), should you wish to stop operating as an HMO. Having an exit strategy at the beginning of your HMO investment means that you know the conditions to look out for, should the need to cash-in on your investment, arise.
“We work hard to make sure that our clients’ experience of HMO investment is a smooth and profitable as possible. This includes showing the financial projections and sourcing proven local contractors and suppliers. As well as find great investments for them, we are actively involved in finding suitable tenants, managing the property and minimising void periods for our active investors. Great HMO property investment doesn’t have to be complicated.”
Contact us to find out more or read about our background in the HMO property market.
