HMO property investment is one of the 52 property businesses strategies that you can get into. When considering this strategy always look at properties that are 3 bedrooms and above 2 x living room, large kitchen and has scope to increase the value. Here are 5 tips to increase your HMO property;
1. Loft Extension
2. Side/Back extension
3. Interior design
5. Garage conversation
Tip 1: Loft extension
Going up into your loft space can not only increase the value of your property, but also give you additional space for renting out.
In Liverpool we have a house that has a loft room and generates more money, as its classed as a prime space, having its own access allows the tenant to have more privacy, thus room value goes up.
When you are doing your property due diligences’, always have a look in the loft space to see if there is potential for converting and look on the road to see if anyone else has done a loft conversion, as planning permission will be easier to get. Always ask estate agent, if going into the loft has the potential to increase the value of the property? As loft conversations can cost upwards of £10,000 you want to make sure you get a good return on your investment.
Tip 2: Side/Back extension
Going out to the side of the property or extending at the back of the house, of course this can also be a double
heighted extension both the back and side. I have a property that I own in East London, before I turn this into an HMO, I extended the back of the house to include a new kitchen and bathroom.
The property is a 3-bedroom semi-detached so had the space to do this as most semi-detached properties are larger. It then allowed me to create a dining room where the existing kitchen was, making it more rentable. The point here is adding an extension side/back one or two stores not only adds additional space but also increase the value of the property.
Tip 3: Go for a Garage Conversion
Garage conversations is one of my favourites as they have become redundant for the average family car and most people just fill it with stuff that can be just thrown out. Garage worth converting are generally found on semi-detached properties or detached properties. The space is usually a good size, you can also consider turning them into a two storey.
This type of conversation has different types of usage;
- Studio flat
- Downstairs bathroom
- Dining room
Adding anyone of these type of rooms to this space which is normally considered dead space adds to your rental yield also increasing the values on the property.
Tip 4: Conservatory Property
When your working with a budget sometimes it’s not possible to do a side/back extension, so you might want to consider something that still gives you and extra space, but is also more cost-effective, conservatory lends itself to this type of extension, without it costing that much.
You generally don’t need to get planning or building regulation permission which makes it even cheaper to install than a side or rear extension.
This space can be used as a communal area, which free up the living room space adding more value and opportunity to create an extra bedroom therefore generating more rental income.
You must bear in mind that this type of additional space might not work on every property, but where the opportunity presents itself it should be considered
Tip 5: Interior Design
When it comes to generate a great return on your HMO investment, consider the interior design.
- Cost-effective- can suit any budget
- Easy to get done
- Succeeds in achieving the outcome of the look
When we started converting our properties into HMO we research the décor of these types of properties and how the house was laid out and the bedrooms, something they all had in common they were boring they weren’t warm and inviting. So, I made the decision that all the HMO that I owned will have a simple yet elegant theme, being warm and inviting. I have always viewed my designed based on if I would live there. So, White walls with a feature wall in warm grey, grey carpets in bedrooms, hall, stairs and landings, light grey wood floors, High gloss tiles for the bathroom and kitchen floors.
Always try to be different present your room well add additional things that would make it appealing to the renter, I also added;
- Fully loaded kitchen-pot, plates, utensils white goods.
- Bedrooms- beds, side table, mirrors, chest of draws and pictures.
- Living room-internet, TV, settees, dining table and chairs, rug and pictures.
I put a lot of effort into how it looks but was very inexpensive I wanted to make it easy for potential renters to just move in with their personal effects without having to think about anything else.
When one of our tenants moved out as he found another job and the property was no longer convenient, he wrote “Sapphire -Thank you so much -you have the be the best landlord I’ve ever had! Many thanks for everything”
This is a few pictures of one of my properties in Liverpool.
Generating a generous return on your HMO can be just as simple as doing some interior design. Sometimes keeping it simple without outlaying extra cash for extensions can still bring you short- and long-term rewards. Always stay within your budget, if you have a budget of £1,000 then this will restrict you as to what you can do, but even if you have a bigger budget also bear in mind that this is an investment property so don’t break the bank just because you can, you could end up over spending therefore not adding much value in the short term and to see a healthy return on your investment you will have to wait for the rise in the value.
I hope this has allowed you to open your imagination with these 5 tips that can transform your HMO into a great return on your investment. The point on these tips is to think outside of the box, become more creative with your thinking. If budget is your major concern Keep it simple and add some touches to the interiors which will not only enhance your property but increase its value.