OFFSHORE
What are the benefits of owning an HMO ?
1 . Increased rental income
HMOs often generate higher rental yields ( minimum 12 % gross yield upwards ) compared to traditional single-let properties . Since multiple tenants occupy the same property , landlords can charge individual rents for each room , resulting in a higher overall rental income .
2 . Diversified tenant pool
With an HMO , landlords can attract a range of tenants , such as students , young professionals , or individuals looking for affordable shared accommodation . This diversification reduces the risk of having a property vacant for extended periods .
3 . Reduced financial risk
With multiple tenants , the financial risk associated with rental income is spread across several individuals . Even if one tenant fails to pay rent , the landlord may still receive income from the other tenants , mitigating the impact of non-payment .
4 . Flexibility in property use
Converting a property into an HMO can allow vendors to maximise the use of the available space . By creating individual rooms for rent , larger properties that may be less desirable as family homes can be effectively utilised for rental purposes .
5 . Potential for capital appreciation
In certain areas with high demand for shared accommodation , HMO properties may experience greater capital appreciation over time . This can provide an opportunity for the vendor to sell the property at a higher price in the future .
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Reasons why we recommend doing the HMO conversion yourself
1 . The Price
Turn-key HMO ’ s will always have a premium added on to them . The companies that develop these properties will need to make their money back somehow . Yields advertised for turn-key HMO ’ s are usually anywhere from 7-10 %. The ROIs on our deals are generally more than 15 %. This means that as an investor you are paying more for the property than if they done the works themselves .
2 . The Works
The health of an investment should be measured over its lifetime . There are many reputable companies that produce turnkey HMOs , however there are also a lot of not so good ones . When buying turnkey , you are trusting that all the build works have been done correctly and to a high standard as you won ’ t have any oversight over what was spent and what was done . Leaking pipes ? Mould ? Faulty electrics ? A lot of trust
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