One of the top investment strategies in property is to run a House of Multiple Occupation (HMO). That’s because, like other business sectors, there tends to always be profit in numbers ie the more rooms you rent out, the more monthly income you will reap.
And with an HMO, those rooms are all under one roof, which means that, although the upkeep and admin for such a large property is far more demanding than a few buy-to-let investments, at least it is in one location. This should, potentially, make your investment far easier to manage and keep costs down.
Pay someone else to manage your HMO
As a HMO landlord, you will pay for the heating and lighting in the property, since you are only letting out the rooms, not the entire house. But the profit from renting the rooms out individually will pay for this, and more. And, if you earn enough profit to justify it, you could always get someone in to manage the HMO for you. And that allows you to cast your property investment net even wider…
Look for educational establishments – and demand
HMOs are often sited near universities and colleges, or in city centres. You can find out where the demand is in a city by looking at where other HMOs are located. You can also check out property portals and websites such as SpareRoom and Gumtree and find out how many online visitors are looking for single room accommodation. You can do it the old-fashioned way too, by looking at ads in newsagent’s windows – especially those near universities, big hospitals or large corporations which employ a lot of contract workers. Then again, you can contact these establishments independently and ask if you can be added to a list of advertised accommodation for students/employees.
Look local to manage a HMO
If you have set your heart on renting out rooms in a HMO and managing it yourself for the experience, then it’s best to look local for your investment property. The reason for this is that you are going to be spending a lot of time there attending to maintenance issues, collecting rent etc, so don’t give yourself a big distance to travel on a regular basis. If you’re local, it’s also easier to keep an eye on things if there appears to be some sort of a tenant dispute.
Look out for any HMOs where the existing landlord is fed-up and looking for someone to take it off his or her hands. Alternatively, look for large Victorian or Edwardian-type bungalows that you can convert (you’ll definitely require local planning approval for this).
Build your portfolio with Sourced Franchise
If you have been intrigued by the above and the idea of renting out rooms rather than entire properties appeals, then why not build your profitable HMO property portfolio with the help of Sourced Franchise? From training to property leads and tenant support, Sourced will be by your side, helping your create your portfolio. To find out how Sourced Franchise can help you generate an income from HMOs, download your copy of our Sourced Network prospectus.