When it comes to selling an HMO, we are experts in providing HMO valuations. With years of experience, we know how to value your property appropriately. While ensuring you get the best possible value for your HMO. We have a tried and tested approach to valuing all different types of HMO property, including student HMO valuations, commercial HMO valuations, and more.
Lots of our landlords, buyers, investors and partners have an interest in how we value our HMOs and what factors play a role in our final price recommendation and property value.
Components of a Valuation
When valuing a HMO it’s important to understand the multitude of components which form a valuation. All the components we take into consideration help lead us to the final price, and ensure that we’re pricing your HMO accurately and fairly and with the right investor in mind.
Location & Gross Yield
The easiest way to get a ballpark estimate of a property’s value is to initially use a ‘broad-brush’ method. Which considers sales of similar properties within the region and postcode to understand how the location has an effect on the value. Understanding the amount of yield that area commands helps to inform our HMO valuation process.
Fine-Tuning
Once we’ve established the expected gross yield of an average property within the area. We look at the details more specific to the property and the different variables that can have an effect on value. Such as the tenant demographic, proximity to necessities, the demographic of the targeted tenant, and the viability of the rent.
Proximity
The proximity of the property to key necessities and what exists in the surrounding area will have a huge effect on the HMO valuation. The attractiveness of the HMO is affected by local shops, travel routes, parks, employment opportunities and the tenant type. We carry out an inspection of the surrounding areas to identify what sits in the immediate vicinity and how that may affect the value.
Tenant Demographic
Tenant demographic is key when valuing an HMO, as the demand from the market is what ultimately drives the price. It’s important to take into consideration the tenant type of a given HMO to ensure that the property is priced at the correct level, with an opportunity for a good return on investment.
Rent Viability
The demographic of the area also plays an important role in the viability of the room rate per tenant. Properties in London typically attract a very high quality professional house-sharer hence room rates are highest here in the UK. For a property to be of interest to an investor, it needs to provide a substantial return on investment or yield.
Condition / Bricks & Mortar Value
The general build quality and size of the HMO is central to the HMO valuation process. Understanding the condition of the property will inform what level of repair work is required, and what the anticipated annual maintenance bill may be. Also, understanding the ‘bricks and mortar value’ can help us further assess the potential yield, and therefore the HMO’s market value.
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