HMOs can make superb investments for landlords – either as a strategy on their own, or as part of a diverse property portfolio. But what exactly is an HMO and what are the benefits of investing in them as a landlord?

HMO is a term that is used to define accommodation that is owned by a private landlord and shared among a number of people. The acronym stands for a House in Multiple Occupation. There are a range of different types of accommodation that could fall under this definition, depending on how many people are living there and what the living arrangements are. As a general rule, where there are three or more tenants in a property who make up more than one household with shared toilet, bathroom or kitchen facilities, this could be an HMO. 

HMOs are generally more profitable than standard buy-to-let properties. That’s because rooms in HMOs are let separately, meaning multiple streams of income. For example, a three-bedroom house that generates a rent of £1,400 per month could be renovated and extended to become a six-bedroom HMO. If each room generated a monthly rent between £900 – £1200, that would be a total monthly rental income of £4000- £6000.

Here are some clear benefits that HMO investment can bring:

1. Higher yields

HMOs can produce higher rental yields than traditional buy-to-let properties, sometimes as much as three times higher.

2. High demand

The demand for shared living accommodation tends to remain robust against economic change and uncertainty, due to tenants seeking affordable rooms to rent.

3. secured rents

The rent is paid directly from Universal credit which secure the rental income, that means even id the rental market is slow, you can still achieve the rental value that the universal credit gives.

4. Management

All our HMOs are developed for the purpose to sell to institutions for a high profit.

The units are managed until we find an institution to buy them. All units are managed in house by our so we have full control o rental income.