With limited choice and rising prices in the buy to let investment marketplace, more and more clients are asking us if HMO is the way to go. There is no definitive answer when it comes to HMO investment versus single occupancy buy to let properties in the UK. However, there are a number of factors that can be taken into account when making a decision about which route to take.
One of the main advantages of HMOs - or House of Multiple Occupancy - is that they offer investors a higher return on investment (ROI) than traditional buy to let properties. HMOs can be more expensive to purchase and maintain - Furniture, insurance, utilities, management, etc - but they tend to generate a higher income due to the multiple occupancy of the property. In comparison, single occupancy buy to let properties may provide a lower ROI but are typically easier and less expensive to maintain.
Another key factor to consider is the current landscape of the buy to let market. The recent changes to stamp duty and mortgage interest rates may make HMO investment a more attractive option for investors. HMOs are not exempt from the 3% additional stamp duty charge that applies to second homes, but they can offer a higher monthly return once the income from each room is factored in, even after additional expenses are factored in.
Ultimately, the decision about whether to invest in an HMO or a single occupancy property will depend on a range of factors specific to each investor. However, HMOs can be a lucrative investment option and may be worth considering for those looking to maximise their return on investment.
Newcastle, Gateshead, North and South Tyneside are great areas to invest in high quality HMOs, with many young professionals seeking accommodation close to their work or near to Metro stations in suburbs such as Pelaw, Heaton and Felling.
If you're thinking of entering the world of buy-to-let property investment, it's important to do your research first. To find out more about HMOs and other types of property investment, contact Clarice Carr & Co today, We can help you decide on the best investment route for you or your business, and we can help you to achieve your goals.