In my last two articles we’ve covered exactly ‘what’ an HMO is, and ‘why’ you may want to be doing HMO’s – namely due to the MASSIVE cash flow and lifestyle that’s possible with theses types of properties. In this article, I’d like to cover the 5 main HMO market sectors, all of which have their own pros and cons, all of which can be very profitable, but need different considerations and approaches. The 4 HMO market sectors are: – Students – LHA / Housing Benefits – Workers – Professionals – Boutique / High End My personal HMO’s are all workers and professionals. I have never rented to students, but that’s only because I don’t have a University in my town, and not because I don’t think it’s a good market. Personally, I’ve not had the best experience with LHA tenants, but again I know a number of successful HMO landlords and investors that only do LHA. So really, what’s the best market then? Well, in my opinion, the best one is the one that’s best for you! If you haven’t got a University in your town, I’d guess it’s not going to be students for example. My bias is to workers and professionals and I have been able to achieve a very good track record of reliability with tenants who are working. Also, personally, I feel more affinity and rapport with working professionals and this helps be build good relationships with tenants. Ultimately, you need to decide which part of the market and which types on tenants you want, and really focus on that. There is a real benefit in focussing in just one sector as every enquiry is relevant to your properties and equally and every room / property you have is relevant to the person enquiring. It is of course ok to have different HMO’s, eg a few student houses and a few professional houses, but if doing this mixed strategy, the only rule I recommend is this: don’t mix and match in the same house. Eg, LHA does not mix with professionals, students don’t mix with workers….quite simply, it’s just a different tenant profile and for harmony in the house (which ultimately helps you leverage your time), stick with the same!
