Where to buy a HMO

With a large number of students in Liverpool three are HMOs in l;arge areas south of the City. The following mapped areas show popular locations for HMOs.

Wavertree & Surrounding Area

The first areas to look at are terraced houses around the Wavertree area of Liverpool. The A562 (better known as Smithdown Road) is a multi cultural part of Liverpool popular with students looking for cheaper housing then Central Liverpool. The area has a couple of Super markets, lots of bars and is between the University of Liverpool and it main sports campus along with the Student hall popular among first year students.

In addition the bus services run a student only service along these routes due to the large population of students living here. Along with the standard shops and pubs the location also has direct access to Sefton Park and Wavertree Sports Playground.

If you purchase a HMO in any highlighted area below or close by you should be able to find student tenants.

Kensington

The next location popular with HMOs is Kensington. Although the area is geographically close to the main University of Liverpool property is cheaper to buy and rent in this location. This proximity and value also makes the whole location popular for students looking for HMO living. 

Between and around these 2 main areas you will find plenty of successful HMOs. It is when you look North or North East of the City Centre for a HMO that you are looking in the wrong area. So use both these highlighted areas as a rough guide on where students and professionals of The Universities will be looking for a HMO. 

HMO Management

Managing a HMO bridges the gap of a residential property and a short term Let. by this I mean Short term lets require full-time management, whereas residential take less management and perhaps 1-3 years you will to be actively managing any individual property. 

With a HMO you can expect a new tenant every year or 2. In addition to this for Liverpool HMOs do not get taken care of by the tenants (in many instances) as student can tend to be less respectful than a residential tenant. Expect to pay 10%-12% if you look to have this managed by a local company. IN addition you will have more repair costs than a residential property.

Most of the most successful HMOs in the area with yields reporting 20%+ will often be managed by the owner themselves, or the owners own management company, or the property was purchased 10+ years ago when these properties could be picked up for very little. 

Advertising for tenants

With advertising properties, there are the usual places such as Rightmove or Zoopla. However, as HMOs in Liverpool are largely reliant on Students, there are many ways of advertising your properties. Many other local sites have had success it getting students attention in advertising HMOs. If your property is managed by a local company then you may not need to worry about this, but if you are managing your own HMO then you can do the following

1. Advertise on Rightmove and Zoopla through a service such as Open Rent https://www.openrent.co.uk/
2. Post adverts at local University Boards 
3. Advertise here... https://www.liverpoolstudenthomes.org/
4. Advertise here https://www.accommodationforstudents.com/

University Tenants

If you are looking to invest in a Liverpool HMO then you are pretty much investing in student accommodation. Although you can rent to a group of young professionals working the city. Your pool of potential student tenants are...

University of Liverpool - 22,000 +

John Moores University - 18,000 +

 Hope University - 4000 +

Expected Yields

As mentioned if you already own property in these areas and you purchased it 10 or so years ago, then you could quite easily operate these properties at a 20% + Net yield of the property value. In addition if you run the property yourself you could reach 20%.

However, the most likely scenario is you are looking to purchase a HMO and have someone manage it for you. At Fabrik we have HMOs for sale with an operating yield of 10% Net yields. For this kind of opportunity speak to us through our online chat and ask about our HMOs. 

Expected Costs

As mentioned above you can expect to pay 10-12%  + VAT for managing a HMO.

other costs...

• £15 per month LL insurance
• Building Insurance, for a 4 bed HMO £150
• Bills - you can charge tenant for their bills as standard practice
• With renovation and damages put roughly the same amount away as you do for managements, so around 10% of your income. You may find you are better off doing at least minor between each tenant or replacing some furniture.,