DO HMO'S MAKE THE BEST INVESTMENT PROPERTIES?

Thu 09 Mar 2023

Paul Rickaby, Sales Director

Rising interest rates mean landlords are becoming increasingly aware of their margins, so many are now turning to HMO’s to maximise their rental income.

An HMO (house in multiple occupation) is a property that is let to 3 or more unrelated individuals, the most common example being student accommodation, although professional HMO’s are becoming increasingly popular.

HMO’s can prove to be an excellent investment with considerably higher yields than most traditional buy to let properties, the average yield for an HMO in the UK in 2021 was 7.5% compared to nearer 4% for a traditional buy to let property. Demand is also increasing, and with the introduction of Article 4 legislation by Durham Local Authority, the value of HMO’s has also significantly increased in recent years.

Due to their size and the nature of having multiple occupants, HMO’s do require more managing than a traditional buy to let, as every aspect of the property is getting greater use, therefore ongoing maintenance is a serious consideration. Unless you are a very experienced landlord, it would be wise to consider using a local letting agent to manage the property on your behalf.  

If you would like advice regarding HMO investment and management please call Paul or Matt on 0191 3865349.
 

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