A House in Multiple Occupation (HMO) is a property investment strategy that involves renting a single residence to three or more people from two or more households. HMO properties often have areas that are shared, such as kitchens, living areas and bathroom facilities. Tenants of HMOs are often students or young people who find it more affordable to rent a room than to have a place of their own, or prefer to live with other people rather than by themselves.
HMOs are popular with investors because they can achieve higher income by renting out a property room-by-room than as a Buy-to-Let. However, there are greater upfront and ongoing costs and additional regulations landlords must adhere to. There is also generally a higher turnover of tenants which can make this strategy less passive than others.
Investors across the UK and overseas use property sourcing agents so they do not have to travel to the area themselves. HMO property sourcers are used by people who want packaged property deals in areas with high demand for room rentals, such as cities with universities.
In addition to saving you time, a good property sourcing agent can provide insight on which properties and areas will make good HMO investments, and which won’t!
It is important to note that there are restrictions on turning properties into HMOs in some areas. These are known as Article 4 areas. A specialist HMO property sourcing agent should know where these areas are and help you avoid costly mistakes. Many sourcers and deal packagers will also help you through the process of converting a property into a legally compliant HMO.
Would you like a sourcing agent to find you an HMO property deal?
Why not post a request with your ideal investment criteria on Wherewith? Our property sourcing agents can get in touch and let you know about their available deals or seek out a property that matches your requirements.
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