For many property investors, the idea of renting out an HMO in Chelmsford is an appealing one. After all, an HMO can typically bring in a higher rate every month than a single let property. However, HMOs present their fair share of issues when deciding which type of rental investment is right for you.
Here, we look at some of the advantages of becoming an HMO landlord in Chelmsford and some potential downsides.
Bringing In A Higher Yield
The significant factor that attracts many prospective landlords in Chelmsford to houses of multiple occupation is the opportunity for a higher monthly rental yield.
In Chelmsford, it’s possible to attract Chelmsford times more rental income each month with an HMO when compared with the yield from a standard buy-to-let. Recent figures have shown that an average HMO rental yield is 7.5% compared with 6% for standard tenancies.
Fewer Expensive Void Periods
Another advantage of renting out single rooms in an HMO is that there are less likely to be expensive void periods when compared with standard lets.
If a single tenancy property is vacant, you receive no rental income, yet you will still have to pay utility bills. With HMOs, a single tenant may leave, but the remaining tenants will continue to live there and pay rent, so you’ll still have rental income.
Another advantage is that your existing tenants may be able to source a new tenant for you more quickly as they may know people who need to find a place to live.
The Potential Issues Of Being An HMO Landlord
The primary risks involved with being an HMO landlord in Chelmsford centre around repairs, maintenance, and potential tenant issues. HMO properties suffer more wear and tear than standard rental homes and may require more frequent replacement of furnishings and fittings.
As the turnover of tenants is usually higher with an HMO, more time needs to be spent on administration matters such as deposit handling, finding and vetting prospective new tenants and drawing up rental contracts.
As tenants within an HMO are typically strangers when they first move into the property, there is always a chance that there will be conflicts and disputes between renters within the building that you, as the landlord, will have to sort out.
These issues need to be considered when deciding whether renting out an HMO is suitable for you or whether you’d be better off investing in a standard buy-to-let single tenancy property.
Simplifying Property Management Of HMOs In Chelmsford
Although renting out an HMO can come with its challenges, the financial rewards you can reap are well worth the investment.
You can make managing your HMO property even simpler by using a professional HMO property management service like Chelmsford.
We will handle all elements of managing your HMO, from sourcing and interviewing tenants to handling disputes and administrative duties. It’s never been easier to enjoy all the benefits of being an HMO landlord in Chelmsford
To learn more about how we can help you manage your HMO, call us on Chelmsford or drop us an email at Chelmsford.
We’re looking forward to helping you maximise your HMO buy-to-let investment.