HMO Property Investing
Do you have an investment property that you want to rent out? If so, have you considered the possibility of increasing the income by converting the property into an HMO "" Houses in Multiple Occupancy? This is one sector of property investing where the market is continuing to grow despite the housing market slowing down.
Usually this will mean that you have a number of bedrooms "" perhaps 3-5 "" where each tenant has their own private space, and then there are shared areas of the home that all tenants use such as the kitchen and bathroom facilities. Of course if your property is large enough, you could investigate what it would cost to renovate the entire property and create mini-studio apartments where each apartment was self-contained and only shared the front/back entrance and any gardens. Although this would require further investment, this kind of HMO could give you a far greater ROI.
You should check out whether or not your local authority HMO regulations require you to have a license in order to create an HMO, but usually an HMO license isn"t necessary unless your property is over 3 floors high, or will be home to 5+ tenants. Make sure you have the local authority"s response in writing so that if this is later questioned, you can produce the letter to prove that you did make enquiries before starting the HMO and everything at that point was in order.
Once you"ve done your research, sorted out the licence requirement and have your HMO all ready for habitation you need to find tenants. A good place for these is amongst the student population especially if your property is located near a college or university. If you have standard accommodation with shared facilities, try to attract the undergraduate population. These will be students who want to get out of the Halls of Residence and share accommodation with their friends. They won"t mind sharing facilities and will enjoy the community atmosphere of an HMO.
If you have invested further and created self-contained mini studio apartments, then try to market your HMO amongst the mature postgraduate students, overseas students (who often bring their families), and even junior lecturing staff who are new to the area and need a cheap place to start to put down roots. The older students and junior academics will be willing to pay extra in order to get some privacy. The academics will have salaries, and many postgraduate students are either working part-time, or may have scholarships that will cover their accommodation costs. Another target area for your accommodation is young professionals. The property market isn"t at it"s best for first time buyers and so young professionals who are the in the early stages of their career are a good tenant group. If you are willing to invest more and create a prestigious HMO that attracts this group; perhaps with guaranteed car parking, high speed broadband access etc, you are likely to earn a higher income from your property than you would from undergraduate students.
HMO investing is a good way of using your capital to produce an income, but if you"re not too sure about what you"d need to do, or whether your current property is suitable, then you should attend an HMO workshop or home study course to find out more.
You won"t be sorry!
Usually this will mean that you have a number of bedrooms "" perhaps 3-5 "" where each tenant has their own private space, and then there are shared areas of the home that all tenants use such as the kitchen and bathroom facilities. Of course if your property is large enough, you could investigate what it would cost to renovate the entire property and create mini-studio apartments where each apartment was self-contained and only shared the front/back entrance and any gardens. Although this would require further investment, this kind of HMO could give you a far greater ROI.
You should check out whether or not your local authority HMO regulations require you to have a license in order to create an HMO, but usually an HMO license isn"t necessary unless your property is over 3 floors high, or will be home to 5+ tenants. Make sure you have the local authority"s response in writing so that if this is later questioned, you can produce the letter to prove that you did make enquiries before starting the HMO and everything at that point was in order.
Once you"ve done your research, sorted out the licence requirement and have your HMO all ready for habitation you need to find tenants. A good place for these is amongst the student population especially if your property is located near a college or university. If you have standard accommodation with shared facilities, try to attract the undergraduate population. These will be students who want to get out of the Halls of Residence and share accommodation with their friends. They won"t mind sharing facilities and will enjoy the community atmosphere of an HMO.
If you have invested further and created self-contained mini studio apartments, then try to market your HMO amongst the mature postgraduate students, overseas students (who often bring their families), and even junior lecturing staff who are new to the area and need a cheap place to start to put down roots. The older students and junior academics will be willing to pay extra in order to get some privacy. The academics will have salaries, and many postgraduate students are either working part-time, or may have scholarships that will cover their accommodation costs. Another target area for your accommodation is young professionals. The property market isn"t at it"s best for first time buyers and so young professionals who are the in the early stages of their career are a good tenant group. If you are willing to invest more and create a prestigious HMO that attracts this group; perhaps with guaranteed car parking, high speed broadband access etc, you are likely to earn a higher income from your property than you would from undergraduate students.
HMO investing is a good way of using your capital to produce an income, but if you"re not too sure about what you"d need to do, or whether your current property is suitable, then you should attend an HMO workshop or home study course to find out more.
You won"t be sorry!
