The most common question asked about HMO’s is, ‘what are HMO’s’. The question that should be on everyone’s lips is why HMO properties are worth the investment?
Investors are always looking for the next sound investment and one that will yield a good return. HMOs are experiencing a growth in popularity, this looks like it will continue well into the future. There is now such a high demand for shared accommodation, especially when it’s a high standard and well maintained in a popular urban residential area.
HMO properties are worth the investment because the gross yields are more significant than the typical buy-to-let property model. While there are challenges to consider regarding managing a multi-let property, the return on investment more than makes up for those elements that require a little extra attention.
Why are HMO properties in such high demand?
Low property prices and high demand are the winning combinations when it comes to HMO property investments, which is why places in Lancaster, Preston, Stoke on Trent and Huddersfield are ideal areas to consider when looking for where to invest in property for a good rental return. Especially when taking into account the large student populations.
Huddersfield in Yorkshire is the perfect example of an area where HMO properties are worth the investment because it has a large student population, is close to Leeds and Manchester and because the property prices are low and the demand for affordable rooms to rent is high, so are the investment yields.
Stoke-on-Trent in Staffordshire is another excellent region for HMO property investment, which is why HMO Property Designs are now focusing on developing new projects in this area. With Staffordshire and Keele University’s and University hospitals on the doorstep and the exciting redevelopment projects underway, Stoke makes the ideal city for investing in high-quality HMO properties.
The demand is always higher in these types of cities and not simply because of students, but also new graduates looking for more affordable types of accommodation and those just starting their career and relocating for work.
Outside of London, the Midlands and North West have the most significant student populations seeking high-spec affordable accommodation. This is important when considering if HMO properties are worth the investment because student accommodation is an incredibly lucrative way to get a good return on property investment. This is why HMO Property Designs is developing new areas for investment.
Good quality interiors, affordable rent, high standard facilities, and a community feel are important to people seeking to live in shared housing style accommodation.
Although student lets may require more significant management than letting to working professionals, there are great benefits to renting accommodation to students.
- Students are exempt from paying council tax which can reduce the building management costs.
- Property maintenance can be carried out during term breaks, for example, the summer holidays.
- Student multi-let properties tend to have a higher yield than the buy-to-let model.
- There is less competition in the HMO student lettings arena; there is a more significant opportunity to grow an HMO property investment portfolio and ensure a consistent income stream.
- Not only do most students come with a guarantor, but they are also often able to make payments upfront and are obliged to cover the rent if another tenant leaves.
The UK population has been steadily growing over the past few years. The lack of affordable housing creates an auspicious time for those wishing to enter the property investment market and benefit from this demand. Anyone who invests in shared housing style properties and develops and manages them to a quality standard is helping solve a serious problem the people in the UK are facing today. In that sense, investing in an HMO property could just be an ethical investment too.
The best-case scenario for investing in HMO properties is to employ an HMO investment expert and management company. That way, all of the hard work is taken care of, leaving the investor to sit back and enjoy the returns. That is why HMO properties are worth the investment.
ABOUT HMO Property Designs
HMO Property Designs provides investment opportunities for investors in the HMO property sector. HMO Property Designs fully refurbishes these properties to the highest standards to help ensure tenants have quality accommodation and landlords receive excellent returns on their investments.