A House in Multiple Occupation (HMO) is a property that has been let out to sharers rather than a single family unit. These sharers can be anyone from students to professional employed people.
I am often asked by would be and established property investors, why I invest in HMOs.
My answer is simple: CASH. By letting your house to sharers you can receive up to 300% of the income that you would otherwise get. However, it is more common to achieve on average 100% additional cash flow.
With this additional cashflow, you can invest in further property acquisitions or go on that much needed holiday!
The reasons I love HMOs so much are because:
1. I get immediate and greater cashflow than I would not normally get from a single-let unit.
2. I still get the long term capital growth.
3. I do not need to fill all rooms to get a return on my investment!
In my opinion, the enhanced cashflow outweighs any disadvantages such as possibly higher maintenance costs. Once you have your system in place to deal with HMOs, the disadvantages will feel like nothing, and you’ll wonder why you never considered multi-lets before.
If you are still uncertain about HMO properties, I would suggest you sit down and do a quick calculation.
A 3 bedroom house with a downstairs lounge, that would normally rent to a family for £600 per month could bring in £1,040 pcm if you were to rent each of the 4 rooms out at £60 per week; that’s an additional £440 pcm, ie. an extra £5,280 per year!
You only need to do this a few times before you start seeing amazing returns on your investment.
So next time you’re looking for an investment property, you should definitely consider converting it to HMO use. Try doing it for just one property – make it work for you and then replicate your successes.
Once you have developed a system to manage your HMO properties, you will find it’s no more work than managing a portfolio of single-let properties.
Claim your FREE Property Course here:
http://www.hmopropertyriches.com/
