The Best Property for HMO Conversion: What to Look For
HMO (House in Multiple Occupation) conversions can be a lucrative investment strategy for landlords.
However, it’s important to choose the right property to ensure success. Here are some key factors to consider when selecting a property for an HMO conversion.
1. Location:
Look for a property in a desirable area with good transportation links, local amenities, and a strong rental demand.
It’s also important to consider the local council's HMO regulations to ensure the conversion is allowed in the area.
2. Property Type:
A traditional terraced or semi-detached house with at least three bedrooms is usually ideal for a six-bed all ensuite HMO conversion.
Ensure that the property is structurally sound and meets fire safety and building regulations, or be prepared to do the necessary work if required.
3. Floor Plan:
The floor plan should allow for separate living and sleeping areas for tenants that exceed the minimum space standards. Although, it’s never a good idea to focus on the minimums – instead consider the layout and flow of the property to ensure it’s suitable for multiple tenants.
4. Parking:
Adequate parking is important if the location of the property is out of town or lacks suitable public transport.
For those properties, a driveway or on-street parking is ideal. Otherwise, HMOs in central areas of Cambridge have on average less than one car per six-bed HMO.
5. Cost:
The property should be purchased at a price that allows for renovation costs and provides a good return on investment.
Easier said than done perhaps, but that’s the skill of finding a great deal. Consider the cost of utilities, council tax, and other expenses when calculating the potential return.
In summary, selecting the right property for an HMO conversion requires careful consideration of various factors. It’s important to choose a property in a desirable location with a suitable floor plan and adequate parking - or in close proximity to public transport or places of study and work, at a cost that provides a good return on investment.
By following these guidelines, landlords can increase their chances of success in the HMO market.
If you would like to know more about buying a property for HMO conversion or if you would like my business to source you a suitable property, get in touch with me via alex@babouris.co.uk
Meet The Writer:
Alex Babouris is a HMO investor with more than 10 years of experience. He is the founder of Cambridge Property People – a community of local property professionals, investors and enthusiasts, and Alex is the founder and lettings director at Babouris – a specialist HMO property investment and management agency.