HMO PROPERTY FOR SALE

HMO property for sale in County Durham.  This is a 17-bedroom apartment block is situated in the heart of Stockton On Tees on Yarm Lane, TS18 3BW.  Currently, this HMO opportunity is let on a 5-year government-backed scheme this property is up and running and will offer an instant return on capital invested.  Generating a rental income of £35,000 per annum, this will appeal to many investors looking for a long-term income and a yield of circa 8%.

HMO Property – £400,000

This HMO property comprises of 4 x 3 bedroom apartments and 1 x 5 bedroom HMO apartments.

Property Features

• 5 Year Lease in place
• £35,000 rent pa
• 8% Yield
• Freehold
• Council Tax Band A
• EPC C-B

For more details on this HMO opportunity, click here.

The benefits of owning an HMO property as an investment can include:

The benefits of owning an HMO property as an investment can include:

1. Higher rental income: HMO properties have the potential to generate significantly higher rental income compared to traditional single-family homes. With multiple tenants paying rent for their individual rooms, the overall revenue surpasses that of a single-let property. This increased cash flow translates into a more profitable investment.
2. More stable cash flow: One of the most attractive aspects of HMO investment is the stability of cash flow. Unlike single-family rentals, where a vacant unit could leave you without income, HMO properties with multiple tenants experience less income disruption. Even if one tenant leaves, others continue paying rent, providing a cushion against financial fluctuations.
3. Higher yield on investment: The combination of higher rental income and stable cash flow enhances the yield on your investment. This means that your returns, relative to the capital you put into the property, can be notably higher compared to other forms of real estate investment.
4. Growing demand: The demand for affordable housing continues to rise due to factors such as urbanization, population growth, and increasing living costs. HMOs cater to this demand by providing cost-effective living arrangements with shared amenities, making them an attractive option for a wide range of tenants.
5. Tax benefits : Like any rental property, HMO owners can take advantage of various tax deductions. These deductions can include expenses such as mortgage interest, property taxes, insurance, repairs, maintenance, and even depreciation. These tax benefits can help optimize your cash flow and improve your overall investment returns.

However, owning an HMO property also comes with some challenges. It is a more complex type of property to manage, with multiple tenants and often more wear and tear on the property. Additionally, it is typically more regulated than a single-family rental property, with more strict safety and housing codes that must be met, so it is important to be aware of the regulations for the area where you are considering investing.

HMO Property Challenges

1. Complex Management: Managing an HMO property can be more demanding than handling a single-family rental. Dealing with multiple tenants, addressing their concerns, and ensuring harmonious coexistence requires efficient property management skills.
2. Property Wear and Tear: With more occupants using shared spaces, there is the potential for increased wear and tear on the property. Regular maintenance and monitoring become crucial to keep the property in top condition and maintain its appeal to tenants.
3. Regulatory Compliance: HMO properties are often subject to more stringent regulations compared to single-family rentals. Local authorities may have specific safety and housing codes that must be met. Familiarizing yourself with these regulations and ensuring compliance is essential to avoid legal issues.
4. Tenant Turnover: While multiple tenants provide income stability, frequent tenant turnover can still impact your investment. Finding suitable replacements and managing vacancies effectively is essential to maintain optimal cash flow.

HMO Property Management

NEPI’s sister company, NEPLM (North East Property Lettings & Management), specializes in providing professional property management services for various real estate investments, including HMO properties.  With their expertise and experience, NEPLM can efficiently manage the day-to-day operations of HMO properties, ensuring optimal performance and maximizing returns for property owners.

NEPLM excels in tenant screening processes. They carefully vet potential tenants, verifying references, conducting background checks, and assessing their suitability for the HMO property.  This ensures that responsible and reliable tenants occupy the premises, reducing the likelihood of payment issues or disruptive behavior.

They also take care of rent collection on behalf of the property owner. They implement effective systems to ensure timely payments from all tenants.  Additionally, NEPLM handles financial management, keeping accurate records of income and expenses, and providing detailed financial reports to the property owner regularly.

One of the crucial aspects of property management is ensuring that the HMO property is well-maintained. NEPLM oversees routine maintenance and prompt resolution of any repair issues that may arise.  By proactively addressing maintenance concerns, they help preserve the property’s value and tenant satisfaction.

By enlisting NEPLM’s property management services, property owners can enjoy the benefits of HMO property investment without the burden of day-to-day management responsibilities.  NEPLM’s efficient and comprehensive approach ensures that the HMO property operates smoothly, remains compliant, and delivers consistent financial returns, providing a hassle-free investment experience for property owners.