HMO 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 property investors looking for a long-term income and a yield of circa 8%.

HMO Property for Sale – £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

To learn more about this HMO for sale, click here.

What is an HMO Property?

An HMO, or House in Multiple Occupation, refers to a type of residential property arrangement where three or more individuals, forming two or more households, share common facilities such as a kitchen or bathroom. HMO properties are commonly associated with rental housing and are often chosen by students or young professionals seeking affordable accommodation. What distinguishes HMOs from traditional rental properties is the shared living space among unrelated tenants. Local regulations may define the specific criteria that classify a property as an HMO, and landlords of such properties may need to comply with additional licensing requirements to ensure the safety and well-being of the tenants. The unique nature of HMOs often results in a dynamic and diverse living environment, making them a popular choice for individuals looking for communal living arrangements.

Is buying a HMO a good investment?

Buying a House in Multiple Occupation (HMO) can be a good investment for many property investors as it typically offers a higher rental yield compared to standard buy-to-let properties, due to the ability to rent out individual rooms. It can generate stable cash flow, particularly in areas with high demand for affordable housing, such as near universities or city centers.

County Durham is considered one of the best places to buy a HMO in the UK due to its affordable property prices and strong rental demand, particularly among students and young professionals. The presence of esteemed universities and a growing economy attracts a diverse tenant base, ensuring a steady stream of rental income. Additionally, the region boasts a rich cultural heritage, excellent transport links, and ongoing regeneration projects that enhance its appeal as a place to live and invest. With its combination of affordability and demand, County Durham offers an attractive opportunity for HMO investors seeking solid returns.

Benefits of owning an HMO property

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

1. Higher rental income: HMO properties offer high 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.

Liabilities and Considerations

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.  Moreover, you will typically face more regulations with an HMO than with a single-family rental property, including stricter safety and housing codes that you must meet. Therefore, it’s essential to familiarize yourself with the regulations specific to the area where you plan to invest.

It’s important to note that the information provided here is a guideline only and is based on general investment principles. Each investment event will have unique circumstances, and we cannot guarantee specific outcomes.

• NEPI advises investors to seek independent financial advice before making any investment decisions.
• While we strive to provide accurate and up-to-date information, NEPI and NEPLM are not liable for any loss or damage arising directly or indirectly from the use of this information.
• Investors should ensure that the income generated from the HMO property is sufficient to cover debt interest costs, operating expenses, and any other liabilities associated with the investment.
• Short-term investment fluctuations may arise, so investors should stay ready for potential market changes.
• Investors must set rental prices high enough to cover debt interest costs, operating expenses, and generate positive cash flow.
• It’s wise to obtain independent financial advice before making any investment decisions to ensure that the investment aligns with your specific financial goals and circumstances.

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 investment 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 stands out in its tenant screening processes. They meticulously scrutinize potential tenants, confirming references, performing background checks, and evaluating their suitability for the HMO property. This guarantees that responsible and dependable tenants take up residence, minimizing the chances of payment problems or disruptive behavior.

Furthermore, they oversee rent collection on behalf of the property owner. They establish efficient systems to guarantee punctual payments from all tenants. Additionally, NEPLM manages financial matters, maintaining precise records of income and expenses, and furnishing the property owner with comprehensive financial reports on a regular basis.

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.

Property owners partnering with NEPLM avoid daily management tasks, enjoying hassle-free HMO property investment. NEPLM ensures compliance, smooth operation, and steady returns.

Investment Opportunities with NEPI

NEPI always have a number of investment opportunities including HMO properties for sale.  Some not always listed here on the website. We often have a number of HMO houses for sale and properties in Leeds, Sunderland, Durham, Middlesbrough, or anywhere in Yorkshire.  If you’re looking for a reliable, experienced and knowledgeable partner to help you acquire properties in the North East of England, look no further than NEPI. Contact us today to learn more about how we can help you acquire the perfect property for your portfolio.