Houses in multiple occupation (HMOs) have been rising in popularity, with many landlords reporting better returns than standard buy-to-lets.
Over the past couple of years, numerous lenders have reported a greater level of interest in HMO property investment. While in the past the asset type might have put off some buyers due to the greater level of work involved, it seems that the pros are increasingly outweighing the cons.
One recent piece of research from Landbay found that half of landlords use their HMO property – or portfolio of HMO properties – as their sole source of income, demonstrating just how lucrative this investment type can be.
Today, it is well known that HMOs can be the most profitable type of rental stock you can own, with the National Residential Landlords Association (NRLA) estimating that average yields are around 6% in England, rising to more than 9% in certain areas. This is considerably higher the equivalent single households rentals.
However, it is important to note that numerous factors will play a role in the ultimate success of the investment, from choosing the right location with high tenant demand, to charging the right amount of rent and managing the property well. At the same time, standard buy-to-lets continue to be a popular, tried-and-tested option for many landlords.
Great returns attract investors
With so many landlords receiving their sole income from their HMO property or properties, it is increasingly being seen as a useful asset class to diversify into either as well as or instead of traditional flats. For investors looking to specifically target strong yields, it is clearly a top choice.
This great article was written by Eleanor Harvey and the full article can be read on the buy association’s website
