The do’s and don’ts for HMO investors
Thinking ahead before you put your money in
Whether you’re an experienced landlord with multiple properties or simply considering your options as a new investor, it’s generally accepted that HMOs (house in multiple occupation) offer the greatest all-round benefits.
In the first instance, whether making your property available to students or the general public, the demand for housing in the UK means it’s unlikely you’ll have any problem filling your rooms. Then of course there’s the small fact that HMOs provide the highest rental yields on the market.
As with any investment though, it’s very rarely completely plain-sailing. Here’s a few HMO do’s and don’ts to consider.
- DO your research…
When it comes to HMOs, location and demand is everything. Get it right and you stand to earn high and stable rental yields on an ongoing basis. Get it wrong and, well, there’s no worse feeling than a property full of potential but with empty rooms.
So be sure to research the area you’re thinking of investing in. Are HMOs popular on the rental market? Is there a big student population or plenty of young working professionals? Are the local council actively seeking HMOs for supported housing? If the answer is no to all of these, we recommend you start searching a new postcode.
2. DON’T put profit ahead of quality…
Why offer a living room when you can offer an additional bedroom instead? Who really needs a communal space? They’ve got the bathroom for that.
These are the types of questions (and excuses) many an HMO investor will ponder as a way of making more money. But let us assure you that whilst plenty of landlords do it, the good ones generally don’t. Why? Because astute landlords know that any compromise on quality can backfire when tenants find they can get far more bang for their buck at another HMO just down the road.
3. DO take pride in your tenant’s living experience…
Ensuring your tenants feel safe, happy and positive about their living experience should be as important to you as the rental yields you may earn.
Remember, happy tenants mean long-term tenants which means long-term profitability. So take the time to make sure those living in your property are satisfied with their living arrangements. Let them know you’re easily contactable and have all bases covered if any problems arise. Oh, and we’re firm believers that the occasional personal touch such as sending them a birthday card makes a real difference too.
4. DON’T use contractors who’ve never worked an HMO…
We’ve already established the great rental yields HMOs can offer. With great potential comes great responsibility however, and it’s vital you and your builders are fully schooled in all HMO safety and building regulations.
There’s always going to be one or two hiccups along the way when undertaking any refurbishment project. So give yourself less of a headache and only work with contractors with the relevant HMO experience.