HMOs are complicated, especially for beginner investors. 

This is because there is a tonne of strict legislation surrounding HMOs, on both a national and local level. 

You will need licences to operate and convert HMOs, and you also have extra responsibilities to protect your tenants as per The Licensing of Houses in Multiple Occupation Order 2018. 

For each local authority, there may be differences in how HMOs are defined, different licensing requirements, and even different planning regulations. 

So, how can you find out how to license an HMO and see if you’re meeting the legislation required? 

Well, while there is a tonne of legislation in place, there is a simple answer: Speak to the local council, or specifically the local HMO officer. 

By doing this, you can find out how to meet the local authorities’ rules on fire safety, room sizes, window fittings, and the number of bedrooms you need in an HMO. 

Pros:  

• Investors can earn higher rental yields, with more tenants paying rent which means higher returns for investors. 
• Void periods are less impactful, as if a tenant leaves, there will be other tenants able to pay. 
• Rental arrears are less impactful, as if one tenant defaults on their payments, other tenants will still pay. 

Cons:  

• Strict legislation means HMO investment can be incredibly confusing.  
• When it comes to selling, investors may struggle, as likely the only buyers will be other investors. This lowers the amount of capital growth potential on the property. 
• In 2022, there is less demand for HMO properties from students, who now want higher-quality properties. 
• Difficult to secure mortgages. 
• Higher running costs for HMOs, as they are subject to more wear and tear due to being older properties. 
• Higher start-up costs than traditional buy to let properties, as you will need to buy more furniture and meet more health and safety regulations. 
• Fewer property management companies will be willing to manage the property, which means you may have to self-manage the property. 

If you’re wondering how to invest in student accommodation, then RWinvest is the perfect company for you.

We have several fantastic purpose-built student accommodation investments for sale, with huge NET returns available up to 8%.

With prices as low as just £59,995, too, you can secure one of the most affordable asset classes in UK real estate.

To see the latest student accommodation investments for sale, then click the link to see our opportunities.

Pros:  

• PBSA is far more affordable than traditional buy to let, with starting prices often below £100k. 
• If you purchase new build student properties from investment companies, you will often get assured rental yields for a set number of years.  
• Due to luxury onsite facilities like gyms and cinema rooms, rental income is high in PBSA. 
• Thanks to highly affordable property prices and high rent, rental yields tend to be incredibly high for student properties, with returns around 8% or more. 
• Huge demand for PBSA, with full-time students outweighing available rooms by 3:1. 
• It can be a completely hands-off investment, with a dedicated student accommodation management company usually provided specifically for the development. 
• With student property investment, you can earn income through both rent and capital appreciation. 

Cons:  

• Capital appreciation tends to be less than traditional buy to let property. 
• Small resale market, as those looking to buy student accommodation will be other investors.