HMO Rent Yields Versus Buy To Let Yields
Which is better —–HMO Rent Yields Versus Buy To Let Yields?
Probably most of us have started out with a single let however some of us realized renting by the room is much more profitable. I recently read an article written by Platinum property partners that each £1,000 invested in HMOs in 2010 would have grown to £2,080 by 2014, while a standard BTL property would have generated £1,770: a difference of £310.
Steve Bolton from Platinum property partners has stated,
“One of the main reasons for this is the HMO investment is intrinsically geared towards maximizing rental income. HMO properties are strategically converted and refurbished to increase the size of communal areas and number of rent-able bedrooms, therefore allowing for a higher number of tenants on individual rather than shared tenancy agreements. This results in greater returns for landlords despite the higher price initially paid.
However in all fairness …Managing HMOs can be more complicated. However we have found a very clever niche. Converting to a HMO and tenanting for social housing with guaranteed rents…no voids… no maintenance has proven to be a great formula. Converting into HMOs has become our sweet spot. Local councils needs housing as do charities and even people coming out of jails. What is more important is the net rent we get. One should not look at the gross rent. There are always alot of expenses running a HMO. However entering into a 3 or 5 year contract…yields are increased and headaches are diminished.
We are in the process of conveying several properties. I will post pictures and videos of the progress…
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