When it comes to property investment, Houses in Multiple Occupation (HMOs) offer lucrative opportunities due to their higher rental yields and diversified income streams. Navigating the HMO market, however, requires careful planning and expert guidance. InvestinHMOs specialises in providing comprehensive information, tools and services to facilitate HMO investments. InvestinHMOs is at the forefront of the HMO industry. In this guide, we will take you through a step-by-step process of buying an HMO with InvestinHMOs, ensuring you have the insights needed to make a profitable investment.
Understanding the HMO Market
Before diving into the purchasing process, it’s essential to grasp the fundamentals of the HMO market. HMOs are properties rented out to three or more tenants who are not part of the same household but share common facilities like kitchens and bathrooms. These properties are particularly popular in university towns and urban areas where housing demand is high. We have plenty of blogs and resources for you to familiarise yourself with the HMO market.
Step 1: Fill in an Investor Welcome Form
Your journey with InvestinHMOs begins with an initial form. This stage begins our relationship with you and gives us a view of your investment goals, budget, and risk tolerance. This helps us build an investor profile, to match you with the right investment opportunity. The company’s experts provide a comprehensive overview of the HMO market throughout the UK, as well as current trends, and potential returns. If you are happy to fill out our AML form and provide proof of funds up front, it can make the buying process much quicker.
Step 2: Market Research and Property Selection
Our expert brokers at InvestinHMOs conduct detailed market research to identify high-yield HMO opportunities. We leverage our extensive, national network to provide access to properties that might not be listed on public platforms. We have a focus in the Northwest, West Midlands, East Midlands and around Greater London, but we have brokered property all over the UK. There is also a wealth of properties listed our website, which you can explore at will, filtering by price, property type, price range, location and rental yields.
Step 3: Property Viewing and Assessment
Once suitable properties are identified, our team will make you aware by either phone or email; the next step involves property viewings and assessments. InvestinHMOs arranges visits and provides expert evaluations to ensure the property meets all necessary criteria for an HMO. We then give you, the buyer, time to do your due diligence and assess the property yourself. This way, you can be sure you are happy with the property’s layout, suitability, safety features, legal checks and compliance with HMO standards.
Step 4: Financial Analysis
Once you are happy with the quality of your HMO investment, it is time to analyse the Key Performance Indicators of the property, namely Return on Investment (ROI). This is done through evaluating the predicted income as a percentage of the investment cost. Metrics to consider are: initial investment (purchase price, legal costs, stamp duty, sourcing fees), extra expenses (HMO licensing fees, mortgage interes, insurance), project management (renovation, furniture, bills, maintenance) and potential rental income. InvestinHMOs has an extensive array of calculators to help you refine your investment strategy, and you can always reach out to our team.
Step 5: Financing your HMO
If you are satisfied with your ROI for your HMO, it is time to invest. Financing an HMO purchase can be complex. InvestinHMOs offers assistance in securing mortgages tailored for HMO investments. They work with a network of financial advisors to find the best mortgage deals and financial products. Another option is an up-front cash purchase, if you have the funds.
Step 6: Preparing Your HMO and Getting Tenants
Once you have ownership of the property, it is over to you to make the required modifications identified during the evaluation and reach out to tenants. However, our team and resources will be available for advice and guidance going forwards. Once your tenants are in, your main focus will be maintenance.
Investing in an HMO with InvestinHMOs is a structured and supported process that maximises your chances of success. From initial consultation to ongoing property management, our comprehensive services ensure that every aspect of your investment is handled with expertise and care. By leveraging our knowledge and network, you can navigate the complexities of the HMO market and achieve your investment goals with confidence.
