What HMO Is Best For Me

What kind of HMO is best for me?

To work out the best HMO investment for you, ask the following questions –

The answers to these questions give you an insight into what opportunities will be best for you. And once you have more understanding of what your own limitations are, then you can choose from a variety of options –

Student lets

The original model for HMO investment, student lets are a profitable and expansive market.

These do not need to be solely within university or college towns. Most students will be happy with a short commute offset against much lower rents. Investors consider locations on the outskirts of major cities, or residential neighbourhoods with excellent rail and bus networks.

The traditional student let model also comes with some downsides like increased wear and tear, and greater likelihood of defaulting due to the average age of the tenants. Buyers mitigate this risk by taking a larger deposit and asking for a guarantor on the lease.

This type of rental suits a relatively hands-on landlord that is open to regular maintenance and upkeep in return for 9-month occupancy rates and a large pool of interested tenants.

Serviced accommodation

Most common in cities and at the higher end of the quality scale, providing serviced accommodation has become a booming market. The globalisation of the average workforce has created an opportunity for some investors.

The wear and tear might be lower than with students (only because executives should be less likely to throw midweek parties!), but that doesn’t mean it is non-existent.

High end apartments attract a much shorter stay, and the regular turnover of guests can provide other headaches.

Depending on the portfolio, investors might employ

This type of HMO is suitable for the sophisticated investor with deeper pockets and a healthy attitude towards risk.

Local authority support accommodation

This is an underserved market that is usually not available to individual investors.

Local authorities and health service providers can use an HMO property to house their patients or clients. Due to the nature of the HMO investment, they can control the common areas and provide support staff as required.

At Hoxton Property, we have secured some exclusive contracts with local authorities looking for this kind of development. That’s another benefit to joining forces with an organisation; better access to these off-market deals that you might not know about!

Most local authorities will do their own refurbishment, include their own specific services and pay you a regular passive income for the use. For most investors this is the ideal scenario – adding to the value of the property without any additional work. All you have to do is collect the rental income!

Professional workers' accommodation

Somewhere in the gap between serviced apartments and local authority support housing exists the need for worker’s accommodation. This could cover

These types of HMOs exist beneath the serviced apartment model in terms of spec and finish, but still provide a certain level of inclusive services such as

In this sector, investors should tailor the offering to the tenants’ needs. Local amenities such as shops or pubs may be more important that toiletries or tableware to some!

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