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Why young professionals are opting to rent HMOs

Jamie Royston

Savvy investors recognise that HMOs (Houses of Multiple Occupancy) make excellent investments, often providing higher monthly yields that standard buy-to-let properties.

Being tenanted by three or more people who are not members of the same family and who share facilities such as kitchens and bathrooms, rental yields with HMOs can be as much as three times higher than when renting a property to one family.

Not only are rental yields typically higher, but in having multiple people renting out the property, void periods tend to be lower, as even if one tenant leaves, the property is still pulling in an income.

The demand for renting HMOs has been steadily increasing in recent years, particularly among young professionals.

For example, in 2015, research showed there was a 23% increase in the number of young professionals opting to live in shared, HMO accommodation.

One attraction of HMOs is that they typically require one fixed payment that includes all bills, opposed to the standard rental charge and bills on top of the rent, associated with standard rental properties.

For young professionals and students, the prospect of only paying one fixed payment each month can be favourable.

HMOs can also be a great way for young professionals to meet new people and make friends by cohabiting. This can be especially desirable for young professional people who may be moving into a new town or city for work, where they are yet to know many people.

Another reason for the rising popularity of HMOs among young professionals is that the quality of this type of property has been improving in recent years.

Recognising the demand for HMOs and the higher yields they generate; successful landlords are keen to offer quality living spaces to attract the right tenants who are willing to pay higher amounts of rent to live in a high spec property.

With the right design, being in a sought-after city or town, and by conforming to up-to-date HMO building regulations, many standard properties can be successful converted into HMOs.

If you are thinking about investing in a property you can convert into a desirable HMO, take a look at the properties listed for our forthcoming auction, where you might find your perfect HMO investment.

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