Despite all of the ups and downs in the property market at the moment, I have a great opportunity to purchase a property that I could convert into an HMO. Is there still a good market for this type of property?
Definitely, although the demand varies depending on where you are in the country. If you are looking to buy a property anywhere near a university you might have even more luck – as student lets are one of the biggest growth sectors
A new report has just been announcing, showing that you are not alone in your interest in the HMO sector, and a growing number of landlords are looking at this area of the market as a safe place to invest:
High demand: with property prices showing no signs of slowing, despite the concerns around Brexit, more and more people are turning to the private rental market as an option. For many, an HMO is a more viable financial option, especially in the larger towns or cities.
Less void periods: If you have multiple tenants in situ all paying rent, you are less at risk of falling into mortgage arrears when one tenant moves out.
Increased rental income: More tenants, means more rent. Of course you can’t charge a full rent for just a room, but overall you can expect a higher average for the property.
Fewer arrears: It is unlikely that all of your tenants will fall into arrears, so you shouldn’t be left short even if one tenant finds themselves struggling to find the rent.
Of course, it’s not a foolproof option. Don’t forget that you will have to factor in to your purchase the additional 3% stamp duty, and you may have to pay for an HMO licence and the maintenance requirements that this type of property demands. However, if you are able to convert a property into an attractive flat, which you can demand premium rental rates from, you are likely to be looking at a very good investment in today’s market
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