Are HMO Properties a Sound Investment?

Why are HMO Properties so Popular?

 There are two major markets to target when it comes to HMO properties, one is the student market and other is young professionals.

Many property investors are put off the student market due to the maintenance required on such accommodation. (1) Young professionals, on the other hand are the most desirable tenants for landlords, as they are often seen as being more responsible, mature and reliable. Young professionals tend to want a city centre high quality HMO property. (2)

The Heaton Group has experienced a considerable growth in the past couple of years and are now at the forefront of HMO design and build within the UK. As part of a new roll out The Heaton Group are now offering investors the opportunity to buy into high quality HMO developments in the Greater Manchester area.

manchester university salford uni of properties students homes hmoStudents often choose to remain in the same city in which they studied, post graduation. This means if there is a rise in number of students, there will be a rise in young professionals requiring high quality accommodation. (3)

Living Styles

One of the major reasons as to why many property investors are choosing to invest in HMO’s is that they are in high demand due to a shortage in new builds. The number of tenants seeking a shared property, with a city center location and high quality interior is on the rise. (4)

Studying at university is a social experience and often students prefer to continue to live together after they have graduated. As many graduates are on a tight budget, living with their friends allows them to save money by sharing food and utility bills.

Not only can HMO properties help young professionals keep to a tight budget, but they also offer city center locations with great transport links. Being able to easily commute to work is a high priority, coupled with a wealth of local amenities.

With increased student fees and property prices rising, it is becoming increasingly difficult for graduates to attempt to get their foot on the property ladder without some kind of financial help.

Even if a graduate receives financial support, the property they can afford is often far from the city centre and is small and often in need of modernisation.

investing in manchester properties city centre students accommodation hmo

Maximum Rental Yields

Investing in a HMO property is a smart move financially.

Multiple occupancy properties can help maximise the potential rental yield for investors. A 3 bedroom terraced property has the capacity to accommodate approximately 5 people if renovated. This means once renovated, two new tenants will be able to move in and pay rent. The more tenants, the more profitable a property can be.

In addition, they provide a more financially stable property due to the number of individual paying tenants they can accommodate. If one tenant moves out of a property, there will usually be remaining tenants left still paying rent.

The Heaton Group specialise in renovating such properties and maximising the rental yield for their clients. By building high quality sustainable properties, the maintenance required over a number of years will be minimal. This again cuts any future maintenance costs and ensures investors are getting a quality investment opportunity. Along with fair usage energy policies and one shared council tax bill hassle for the landlord is kept to a minimum.

HMO Specialists

 In order to transform a regular rental property into a high quality HMO, you will need an experienced renovation team who can carry out the necessary building work, interior modernisation and legalities required.

The Heaton Group are HMO experts, with over 40 years of property development experience. The reason why many investors choose to work with The Heaton Group is because they have the necessary development and lettings team in place and so can provide a hands-off approach to property investment for their clients in the third of the time of the average property developer-9 month projects taking 3 months.

For international investors, a HMO property, which requires minimal maintenance and can ensure a high rental yield, is an attractive opportunity. Often foreign investors prefer a hands-off approach to their investment and are in need of a team of property experts to manage the property on their behalf, especially when they are from outside of Europe.

The Heaton Group have a team of experts waiting to help you invest in the UK property market, please do not hesitate to contact us on 01942 251949 for further information.

Sources:

1. Simply Business - 28 student tenant

2. Property Investment Project - The Best and Worst Tenants

3. Invest In Manchester - Universities

4. Wealth Adviser - HMOs UK working professionals outperform

5. The Genesis Group - Rise in young professionals opting for HMOs

 

 


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