Have you ever considered an HMO investment in Oxford?

Afternoon all,

Further to our recent post regarding HMO opportunities I went on the hunt for a few examples of how these can make outstanding investments.

This one in Hawkins Street, Cowley is on the market with Connells, East Oxford office for £460,000. So I now turn my attention to the rental achievements in this area for houses in multiple occupancy.

Now admittedly this is a mixed bag of 'currently available' and 'let' but they all point to very attractive numbers. in reaching my conclusion I have considered 2 scenarios - firstly I look at the lower case rental price and then the upper level rental price.

At the lower I look at £2500 per calendar month which gives you a rental yield of a whopping 6.5% and that's for starters! Broken down this equates to £500 per room per tenant. Whilst it is a 4 bed property this can be used as a 5 bedroom HMO with the dining room being used as an additional bedroom.

On the upper level there is strongly weighted evidence to indicate that the rental achievement could get even better.

There are 5 bedroom properties being advertised and that have already let at the following prices:

£3000pcm
£2900pcm
£2850pcm
£2700pcm
£2600pcm

I have reviewed alot of these properties very closely and they all vary somewhat in layout, size and condition, however they are all in the same location (Cowley central) and right where the demand tends to be amongst students and professional sharers.

There looks to be a little bit of work required here to bring it to standard. I would suggest a redec and re-carpeting of the entire property and some additional furnishings in places. On the plus side the kitchen looks pretty good however the bathroom will need to be looked at during a viewing as there are no pictures listed.

If I was pushed to place a price on this property for rent I would sway towards £2500 to let it to professional sharers. Alternatively if it was put into the student cycle then it may achieve a great deal more but this is seasonal marketing at the right times during the year (November - March) if this became a serious consideration. The rents in this case are more likely to achieve between £2600 and £2800 per calendar month.

Managing and maintaining an HMO is not without great consideration but if handled correctly and by the right people the returns can be astronomical in a market where 5% yields are very few and far between.

For more on this including what is required when applying for HMO licenses and what to expect please give me a call.

Best regards

RIchard