Would you invest into Houses in Multiple Occupation (HMO’s)?

by Mark Alexander

12:09 PM, 27th February 2013
About 6 years ago

Would you invest into Houses in Multiple Occupation (HMO’s)?

Make Text Bigger
Would you invest into Houses in Multiple Occupation (HMO’s)?

Would you invest into Houses in Multiple Occupation (HMO's)I’m often asked what I would buy if I was starting again today ….. HMO’s would definitely be on my shopping list 🙂

The reason for this is that I can only see that demand for this type of accommodation will grow. Rental yields are already well into double figures for this type of investment.

This morning I received the details of a very smart looking HMO which is producing a gross rental yield of 17.7% based on a sale price of £160,000.  An extract of the property description was:-

“A fully refurbished, immaculately presented, fully tenanted HMO in Doncaster, DN4. This fantastic freehold HMO property comprises 5 self contained studios all with en-suites and kitchenettes, large shared kitchen and separate bathroom.”

The sales particulars were nicely laid out and very detailed. For a relative newcomber this particular offer looked very promising as the property is already tenanted with working people and a property manager is already in place too.

The website I was looking at also had a variety of other HMO’s for sale as well as an alerts feature which is very easy to subscribe to so that you can be informed whenever an HMO is listed for sale.

If you are in the market to grow your portfolio I suggest you take a look at the website by completing the short form below.



Comments

14:35 PM, 28th February 2013
About 6 years ago

Hi Mark

I completed the form and had a look around the website and within a couple of minutes, Rupert from there had called me and we had a good chat about marketing HMO's. I have one in Gt Yarmouth coming up for sale in a few weeks time so this was what prompted my interest. It's not as easy to sell an HMO as a normal house and if I was nearer would look to run it myself as the projected returns are so good. If it hadn't been for this article I would never have found out about him and his company!

Rupert was very helpful and we left it that when I am ready, I will contact him again with full sales details so he can list the house for sale on the site.

I really enjoy (and sometimes contribute comments) the daily articles and have also taken on board some advice from previous articles. I tend to look almost every day when it pops up in my inbox

Glad to see that the site is so popular and growing

Kind regards

Ian

17:59 PM, 28th February 2013
About 6 years ago

If the gross return is 17% do you fully understand the risks? Is there a reason why the return is not 6%?

18:11 PM, 2nd March 2013
About 6 years ago

Rupert has always been extremely helpful in any queries I have had in the past.

All his numbers have been clear and truthful, which is important for people that aren't necessarily experts in the HMO industry.

Mike, I am confused as to the point you are getting at?

Are you saying that because the gross return is 17% there has got to be bigger risks? What if there isn't?

What if the HMO was let for 12 months with no void periods and no problems with tenants, is that still a risk?

5:53 AM, 3rd March 2013
About 6 years ago

E-suite and kitchenettes is the off-putter.
What about if the local council determines each room is a separate dwelling attracting council tax at the individual dwelling rate!?
i maybe scaremongering here; but councils tend to be a law unto themselves.
Do you trust the council tax valuation dept in the area where the HMO is!!!??

18:27 PM, 3rd March 2013
About 6 years ago

Paul, how about calling the council before buying a HMO in a given area. I cant think for one minute anyone that would buy in an area they don't know without contacting the council.

I do agree with you about the scaremongering though.

My old Director at one of my old sales jobs used to say to me when i used to constantly say 'what if'...........IF my aunty had balls she would be called my uncle! But she hasn't. Same applies here.

There's always people out there telling themselves why they cant do something, not why they can.

David Ball

12:57 PM, 8th August 2016
About 3 years ago

What form?


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Shelter couple’s “punishment”: self-imposed exile in Cornwall

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More