How to choose a HMO investment area?

There are many things to consider when choosing a HMO property. One of the most important is the HMO's location. When weighing up investment areas you need to think like your ideal client. Who are they? e.g. students, young professionals, relocators or divorcees. And what do they want from your property? These are the specific things you need to take into account when choosing an investment area.

There are however more general things that every HMO investor should consider. There are quite a few, but here are 5 main ones.

1. Population

For our HMO property to be successful we need to ensure there is a good flow of people wanting to rent our rooms. To ensure this we need to check that there are enough people in the city that meet our ideal client demographic. This starts with researching the population and its demographic, then speaking with local letting agents, this will allow you to qualify the demand of the location.

2. Transport Links

Most people living in HMOs are professionals or students who require strong transport links to get around. Therefore picking a HMO location that is close to trains, motorways, bus links or cycle paths will increase the desirability of your property.

3. Community Points

Likewise people gather around community points, tenants want easy access to airports, hospitals, universities, and even consider big work places.

These 3 points will give you confidence that there is enough demand in your area to keep your HMO's full!

4. City Growth

Another component of our model is the property's capital growth over the time. One way of supporting this growth, is by choosing a city that has a desire to grow and a clear plan to do so. You can usually find this information on the city's council page.

5. Planning and Licensing

There are a lot of different rules and regulations regarding HMO's in the UK. It is important to understand what this means for your strategy. Some areas have Article 4 directions which means investors must get planning permission to convert a property in to a HMO. Other areas may still require planning depending on the size of your HMO. Additionally, HMOs must adhere to specific regulations which is set by the councils housing standards. When considering a location it is important you understand these rules and the impact it may have on your property.

If you are interested in finding out more about property investing with us or our sourcing services we would love to hear from you.

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