Why Invest in HMO’s
Edgehill Property Finance can help you diversify your investment portfolio. One of the ways we can do this is by working with property investors who are seeking to purchase a HMO property. We will help you every step of the way throughout your investment journey from obtaining finance to completing your renovations.
At Edgehill we have extensive experience working with property investor across the Wirral area. From BTL’s to HMOs we know how to help you find the right investment opportunity that can offer the returns you are looking for. Edgehill Property Group is network of skilled property investors who can help you complete your investment process from start to finish.
HMOs are an exciting and lucrative investment opportunity. Rather than letting a property to a singular tenant you can create a home that can be let to multiple tenants at once. Edgehill Property Group can help you transform your property into a HMO ensuring it is following all legal requirements and it is safe for your new tenants.
Investors across the country are seeking to develop HMOs to meet the demand for sustainable and affordable housing. Students and young professional in the Wirral area are increasingly seeking to live in an HMO to save on their rental costs and be closer to their work or education. The Wirral area is perfectly situated to be in high demand for potential tenants with regeneration happening across the city and with easy transport links into Liverpool city centre.
Edgehill Property Finance
Financial Solutions For Your next Investment
The Benefits of Investing in an HMO
Higher returns from your investment
As an HMO is let to multiple tenants usually 3/4 +, you are gaining multiple rental incomes from a single property. The quantity of tenants will usually mean you are making money consistently from the property even if some of the rooms are empty.
High Demand
Properties in Wirral are increasing in demand from younger professional looking to work in the region to students studying locally. Wirral has multiple transport links into Liverpool, Cheshire, and the surrounding areas.
Diversified Pricing
Having multiple rooms available to let will allow you to be more flexible with your pricing. You will make significantly more rental income having multiple tenants than a single tenant per home.
Saleable Asset
You can easily make money by selling your newly renovated HMO to other investors. Property investors are consistently looking for ready to go investments whenever they become available.
Lower Risk
Unforeseen circumstances can happen to anybody especially tenants. If one tenant falls into arrears on their rental payments, then the extra made from the other renters should be more than enough to cover this.
Population Increase
The UK’s population is steadily increasing over time meaning there is more of a demand for affordable housing. While the government are struggling to fill this void property investors can help bridge the gap by accommodating new expats and young professionals.
Tax Advantages
Many more costs will be tax deductible for HMO owners making them a worthwhile investment and saving your more money throughout the tax year.
Edgehill Property Finance
Financial Solutions For Your next Investment
How Can I Finance an HMO?
Edgehill Property Group can help you obtain finance for your next HMO purchase. We have a specialist finance team who can give you access to hundreds of quality lenders who can meet your needs. We offer a range of specialist mortgages including those directly tailored to purchasing an HMO. A specialist mortgage is ideal for property investors who can only meet certain mortgage criteria, this mortgage is much more flexible than the traditional alternative allowing business owners to raise the capital to further diversify their portfolio.
A Complete HMO Renovations Service
Working with Edgehill Property Group will mean you get access to all of our services and areas of expertise. One of these avenues are property development and renovations. Our skilled team of tradesmen can renovate your new property purchase to either convert it into an HMO or bring an existing HMO up to date. From plastering and partition walls to electrical works we can ensure that your new HMO meets all relevant building regulations and requirements to ensure it is safe for your future tenants. Your HMO renovation will be completely project managed by us ensuring that every aspect is scrutinised to ensure it is completed to the highest standards. HMO’s have a higher bar of safety regulations to meet, by working with an HMO specialist like us you can rest easy knowing all criteria will be covered.
HMO FAQ
What is an HMO investment?
An HMO (House of Multiple Occupation) is a home that is usually let to 3 or more tenants at one time. Each room is individually let out while the bathrooms, kitchen, living rooms, and garden are communal areas. Some larger HMOs can have self-contained bathrooms within the rooms further increasing their appeal to renters.
How Much Can I Borrow For a HMO Mortgage?
A HMO mortgage is based on the LTV (Loan to Value Rate) of a property, purchase price, and rental income. In some cases, is can also be based on your personal income.
Are HMOs more work?
As all areas in the home other than the bedrooms are communal, they may require more upkeep. An HMO with 4/5 + tenants will be using facilities such as the kitchen and bathroom much more frequently than a single family living there. This can lead to more “wear and tear”, many HMO owners seek to employ a property management company to ensure the upkeep of their property.
What types of buildings can be HMOs?
Almost any type of building can be converted into an HMO providing it is large enough. While the easiest buildings to convert are residential properties, keen eyed property developers may see opportunities arise from large older buildings such as doctor’s surgeries.
What makes an HMO appealing?
HMOs offer investors a way to maximise their revenue from a single larger building, they are much easier to let out than the entire property. For renters they offer lower rents and a better location, close to their education or work.
Will an HMO give me a good ROI?
Returns from HMOs can range between 10-35% dependant on the location, quality of property, and how often it is filled. You will also see an increase in your investment as the property grows in value, dependant on the area and its condition.
Do Investors buy HMOs?
Yes, it is quite common for property developer to convert properties into HMOs then sell them to keen investors. With the demand for HMOs increasing year upon year it is becoming more viable to “flip” HMOs.
