What makes a good HMO investment property?
HMO’s, or houses in multiple occupation as they are usually known, are known to be one of the most profitable buy-to-let models around. In South Wales, we have four well known universities which attract a huge amount of students to Cardiff and the surrounding areas. This makes it a perfect location for HMO’s to be situated.
Almost any property can be moulded to the needs of a HMO; from Victorian terraces to bungalows, to new build properties. The one type of property that we would advise staying away from would be a leasehold apartment, due to complex legal issues that can accompany them.
Primarily, understanding what your HMO goals are should be the key to what property you are looking to purchase. For example, if your goal is to maximise the yield then you will look for a property where you can capitalise on the number of rentable rooms within it. If your goal is to refurbish a property or add on to it, checking the necessary planning permission would be key to your purchase.
If your property is let to five or more tenants from more than one household, some or all of the tenants share toilet, bathroom or kitchen facilities and at least one tenant pays rent, then your property will be considered as a large HMO and will need a licence. HMO’s have additional Licensing, Safety and Amenity Standards, checked and enforced by Shared Regulatory Services (SRS), so there are lots of regulations in force to be aware of when purchasing a HMO for refurbishment.
When finding your perfect HMO, the key is in numbers. View as many potential HMO’s as you can and never disregard the potential of a property without viewing it first. This enables you to be creative in the flexibility of the properties proportions and what you can do to change the size and space of it. For example, viewing in person helps you to understand where you can knock down a wall to make a room bigger, or potentially extend the property if there is planning.
Here at Keylet Student, we can help you through the HMO journey. Whether it’s your first property or you are a seasoned pro, we can help you find the perfect property for your goal.
Published: December 15, 2020BACK TO NEWS LIST