HMOs (House of Multiple Occupancy) make great investment properties. This is because one property can hold several individual paying tenants, meaning you can make an astonishingly high return on your investment.
However, while HMOs might work well in some areas of the country, they aren’t popular in every location in the UK.
Luckily, we know the key areas throughout the North West where the demand for HMOs is consistently high.
Before we get to that, though, you need to know the type of tenants an HMO is likely to attract.
It’s fair to say that not everyone wants to share a house with strangers, even if they do get their own bedroom, and in some cases, their own bathroom.
Likewise, you shouldn’t expect a family of four on your doorstep any time soon looking for the rent of each room to be paid individually.
And yet, there are still several demographics you can market a house of multiple occupancy to. You just have to know who they are.
These days, many professionals work excruciatingly long hours for not enough money. As such, they don’t have the budget for a huge house or an apartment and don’t want to come home to an empty space anyway.
What makes an HMO so appealing to these professionals is how low-maintenance it is. By only having one room to care for (and providing a helping hand in communal areas), they don’t have to spend what little free time they have continuously cleaning.
For young professionals, HMOs also give them a chance to keep living with friends and enjoying an extension of their student lifestyle. Speaking of students…
Students are by far one of the best demographics to target if you want to invest in HMOs as there will never be a shortage of people looking to move into higher education.
One of the biggest reasons students look for HMOs is because it gives them a chance to be more sociable with likeminded people. It’s also cheaper for them in the long-run, and they can share the cleaning and maintenance chores, which will leave them with more time to study (or more time to go for a few drinks).
The answer to this question is pretty straightforward, as all you have to do is look at the demographic you want to target and accommodate their needs.
If you’re looking at providing rooms to professionals, houses in commuter belts and areas near the city centre should be your main priority. Good transport links are a must, so be sure to search for properties near bus stops, tram stops and railway stations that head in and out of the centre.
As for students, houses near universities almost always attract multiple inquiries. And if there’s a nearby train station for those wanting to go back home for the weekend and a bus stop that heads into the social hubs of the city centre, you’ll definitely be onto a winner.
Since the arrival of BBC and ITV television studios, Media City has become one of the hottest places in the UK to invest in, attracting hundreds of TV professionals.
The site also has a University of Salford building where Media students hone their craft. In fact, the student population has boomed so much over the last few years that new accommodation is currently being built in the area to meet demands.
The new buildings aren’t scheduled to be completed for quite a while yet, so now would be an excellent time to capture the market with HMO properties.
Back in April 2018, New Cross was awarded a fund of £65 million to redevelop the area. This means that the demand to live in New Cross will skyrocket as the regeneration process rolls on.
It’s also a prime location in Manchester’s city centre, next to the Northern Quarter and Ancoats where many professionals already live and work, meaning the surrounding areas have proven the success of Manchester redevelopment projects.
Manchester’s Science Park is a thriving community where some of the UK’s greatest scientists, inventors and business professionals are based. This makes the area a great place for HMO investments.
The site is home to over 150 businesses and is due to undergo expansion in the next 10 years, meaning there are many potential tenants looking for an easy commute who could fill a nearby HMO.
What’s more, the area is close to bars and restaurants, gyms, public transport, so there’s no shortage of things tenants can do to unwind.
And with The University of Manchester and Manchester Royal Infirmary close by, you could easily fill an HMO with students or NHS staff instead.
Pall Mall is set to become one of Liverpool’s key commercial districts in the next few years, thanks to the city council’s plans to build offices, places of leisure, car parks and hotels in the area.
There are also plans to build 2000 apartments, meaning the council are expecting there to be a high demand for accommodation in the area.
It would be a good idea for investors to buy property in the vicinity now before prices start to climb.
Though it’s no longer an island, the name certainly still has a nice ring to it. What’s even nicer than that, though, is the potential for great HMO investments nearby.
With a prime location next to businesses, bars and restaurants, and with views of the Albert Dock and River Mersey, Mann Island is a highly attractive place to live.
The apartment prices, however, are a little on the steep side (the highest price we’ve found being £1980 per calendar month), so an affordable HMO would appeal greatly to others who want to live in the area.
In recent years, the Baltic Triangle has played host to many creative and digital businesses, quickly becoming one of Liverpool’s key modern hotspots.
The Baltic is also in a key location that appeals to professionals and students alike. Nearby, you’ll find the shopping complex Liverpool ONE, several cafes and restaurants, an urban garden and more.
With interest in the Baltic constantly on the rise and with a wide array of possible tenants, investing in an HMO in the surrounding area could become very lucrative.
While the locations we listed above have the potential to be great areas for HMO investments, it doesn’t mean that you should invest in every nearby property that comes onto the market.
Every location has specific areas that will work well for HMOs, but there will always be some streets where houses of multiple occupancy won’t generate much interest. You should always conduct thorough due diligence before investing your money by speaking to local property experts.
As you might have guessed by now, we at Taylor Rhodes specialise in property investment opportunities in the North West, with specific expertise in Liverpool and Manchester.
Get in touch today to find out more about what we know in the North West.