Even if they haven’t invested in HMOs, most property investors are familiar with the term. They may be missing out, though, on fantastic higher-yielding, lower-risk investments. There are several advantages to HMO ownership listed below that many people may not be aware of.
What is an HMO?
An HMO, or “House in Multiple Occupation,” is a home where three or more people share common facilities such as bathrooms and kitchens and pay rent to an owner, most commonly on a monthly basis. This is a basic description, however, because there are several restrictions and criteria that differ from one municipality to the next.
How Can You Benefit From Becoming an HMO Landlord?
There are several compelling reasons why you should consider becoming an HMO landlord, particularly in the North West, where rental yields are exceptionally high. We’ll go through some of the primary reasons prospective landlords may want to invest in the HMO sector.
Increased rental yield
The rental costs on an HMO property are considerably greater than in the BTL market. When a family stays in your home, you may only receive one monthly payment. You may, however, get money from each HMO tenant because you are renting them out. The rental yield of an HMO is frequently three times greater than that of a typical BTL agreement.
Some landlords invest in a large number of units to generate money. You may make more money with fewer properties by investing in HMOs. As a result, you won’t have the burden of managing a huge portfolio.
For those considering a buy-to-let investment, Liverpool and Salford regularly produce higher returns in comparison to other cities. The North West has never seen such a fantastic opportunity to invest in property before.
Decrease void period frequency
Finding a new tenant to move into your property when a prior one leaves may be difficult in traditional BTL dwellings. You don’t get any money or income while the property is vacant, and cash flow soon runs out. This is bad news for people who wish to make money from their property investments by living off the rent they receive. If just one tenant leaves an HMO home, you will still have income from the other tenants.
Minimise exposure to arrears
The other benefit of having numerous individual renters within your property is that if one fails to pay their rent, the harm is somewhat reduced by the contributions of the others. Your risk is dispersed, and your cash flow may therefore stay steady.
Demand for HMOs
Investors should seek to invest in HMO properties in areas with a high student and young professional population, where there is a huge demand for this type of property. The number of university students is at an all-time high, while the desire for such houses is only expected to increase.
How Mistoria Group Can Help
If you’re looking to get into the HMO rental market, come see our specialists at the Mistoria Group in Liverpool, Bolton, and Salford. We are a property investment firm that can answer any queries you may have.