Just how easy is it to find a property to use for either HMO or Serviced Accommodation? Is one easier to find than the other? And what about the management of each? We discuss both these aspects of an HMO and SA strategy in this post, together with potential income streams.
Finding an HMO property
The type of property that makes an ideal HMO is one that has plenty of space. This could be a three-bedroom buy to let (and where you can turn the sitting room into a fourth bedroom). It could also involve a converted office building or nursing home.
To find a HMO property, an estate agent you’ve built up a good relationship with may tip you off about such a property that has just come on their books. You can also find semi-detached and terraced houses online on property sites, such as Rightmove and Zoopla and on our own website with off-market properties, Sourced Property.
The most lucrative option though is to do the conversion into an HMO yourself. For that’s where the biggest profits lie. The kind of commercial properties you’ll need to find will be displayed by an estate agency that specialises in commercial properties or on Sourced Property. Again though, big online sites such as Rightmove advertise these too.
Depending on who your target market is, ie students or young professionals, you can look in those locations where your potential renters can be found. That means properties that are near a university, place of work or in the centre of town where there is plenty of entertainment venues to hang out in.
Make sure to look out for areas where you will get a decent yield and where the demand for rooms is high. It’s worth noting that many HMOs aimed at the young professional market, are of a high standard of décor, with plenty of amenities and en-suite bathrooms.
Finding property for Serviced Accommodation
Upmarket apartments are excellent for Serviced Accommodation property, especially those in city centres. That’s because SAs are used a lot by business people staying over for meetings and conferences. However, they’re also used as city break holiday lets.
A city isn’t everyone’s idea of a holiday though, and that’s why you will also find SA in coastal resorts and in the countryside.
Regardless of whether it’s in the city or countryside, the main feature of SA is that it is hotel-like, ie it’s of a high standard, with plenty of amenities and available facilities, such as dry-cleaning services, domestic cleaning and on-site parking.
Again, the type of properties that can be used for a SA strategy, can be found on estate agency websites.
HMO and SA management
Both HMOs and SAs take a lot of management. Because there is a higher turnover of tenants in a SA, you’ll find yourself doing more admin. There will also be cleaning to organise after each tenant and upcoming tenant details to check. Then, there is the dry cleaning and any other services you offer, to carry out. There can be void periods with SAs too, especially when it’s not the holiday season. For this reason, income can be unstable.
HMOs also require quite a bit of management but there is a relief knowing that your tenants have all signed a lease for at least six months. That means six months of regular income and no additional admin. Once you have the licence in place, apart from checking on fire safety regularly and ensuring the cleaner turns up every week, the tenants can ‘manage themselves’ in the meantime.
Find the best property deals with Sourced
At Sourced, we have identified HMOs to be the most profitable of all rental strategies. That’s why we developed a package that focuses on HMO properties and helps professionals to boost their monthly income by building a successful HMO portfolio. Our HMO experts will guide you on all aspects of HMOs, from finding profitable deals, to furnishing and managing your portfolio. If you are interested in investing in a hands-free property strategy, generating up to 30% returns on your investment, download our Sourced Franchise prospectus now.