HMO vs BTL – There is only one clear winner!
May 9, 2024
Jeff, our managing director started off with tens of Buy To Let properties and now he has a thriving portfolio of HMO Properties. After discovering HMO’s Jeff quickly converted his portfolio from 100% BTL’s to 100% HMO’s
Once Jeff researched the HMO Market 20 years ago and completed his first HMO property he could not believe the revenue that came out of them, and they absolutely dwarfed the revenue that was coming out of his Buy To Let properties.
Are HMO’s more expensive than Buy To Let Properties? Yes! But the benefits far outstrip any that Buy To Let can offer by about 5 times!
Jeff has seen a lot of investors think that they are getting a “better deal” because they can have more buy to lets at a lower cost than having a few HMO properties, but they are not doing themselves any favours.
He has over 30 years in property and would like to share the below words with you about the strong benefits of purchasing HMO properties over Buy To Let Properties.
“Lots of would be investors do not realise that the Buy To Lets are not as safe as they initially thought. You get one bad tenant that does not pay or falls out of work and you have a complete liability with no income but still has the outgoings of any mortgage on it and all of the bills. The bills don’t just stop charging for standing charges just because the property is empty! It ends up been a 100% liability which is why I moved to the HMO model.
However, with an HMO, if one of your 5/6 tenants falls out of work or stops paying, you still have another 4-5 rooms paying your mortgage and all of the bills, leaving you in a much more stable position. 2 out of 5 or 3 out of 6 tenants could fall out of work and you would still have the mortgage and bills covered whilst still owning properties that are ascending in value because capital appreciation does not stop!
Currently our area has enjoyed a renaissance in capital appreciation that has been well documented at around 6-7% a year for the last 7 years, meaning that if you look at the compound growth of your assets with a 6-7% return per annum you can easily double your money in about 13 years.
Owning an HMO property is a no brainer, and you can take my word for that. You can take that to bank because it is both an excellent and truthful experience.
We have managed properties for our investors for over 20 years, and we have a plethora of expertise to make your investment a safe and profitable one.”