Basic Considerations Before Making An HMO Property Investment


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Let’s face it, very few of us are in this business because we like houses. The truth is that almost every real estate investor is in this to make money. So maybe, we get to own a few particularly gorgeous properties while we are at it. But let’s pretend Buckingham Palace is for sale. Who can confidently say that they are willing to invest in it given how beautiful and prestigious it is? Probably not too many will even consider it, unless you were friends with Prince Albert of Monaco.

The bottom line is that investors will tend to buy properties that they think will net them the most returns, and expensive palaces and mansions are extremely difficult to profit from because most consumers can’t afford to buy or rent such properties.

As a veteran of the business, I have a pretty good feel for the market place. Here are some key considerations that you must bear in mind when looking to buy HMO properties to help you get started and improve the chances of making profits.


Getting Started:

  • As the property owner, you will need to submit a planning application if you have three or more unrelated individuals living within the HMO property in question.
  • There are strict building regulations with which you must conform and comply. The most outstanding of these regulations include fire, health and safety regulations.
  • Before you can even venture into this mode of business you need to understand what you can and can’t do legally. This means that there are legal ramifications attached to providing people with rooms within the same house. You need to know what it is you can provide within that room without having to produce individual EPCs.
  • You simply must have the right kind of insurance if you are going to house more than three unrelated individuals within your house.
  • You have to perform gas and electrical checks periodically as per the health and safety regulations.
    Moving Forward:

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Networking with other investors, agents and brokers can help you get the pulse of the location you want to invest in.


Ultimately, like every other real estate investment, you need to know which HMO property for sale to buy. In fact, this aspect might be even more important in this model of real estate investing than any other. The local demographic and economic fundamentals directly determine the kind of income you can earn from your HMO property investment.

The whole point of this entire system is so that you can earn rental income from the individual rooms within your unit. If done correctly, this will increase your overall property rent by at least 50% and sometimes even close to 100%. But you simply must find the right neighbourhood with the right size property and the right kind of people to live in them.

This is where networking with other investors becomes very helpful. Networking allows you to gain insight on certain locations so you can better understand how to approach the market. If you are wondering where to find other investors t network with, a quick Google search can help you spot regular networking events for property investors. Common names in the Industry that usually pop up in these networking events include Simon Zutshi, Reena Malra, David Lee and Rick Otton.

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