HMOs are outperforming single occupancy buy-to-let investments, according to student property investment specialist The Mistoria Group.
Research showed that HMOs rented to young professionals and students had a total geared return on equity of 122% over four years, compared to 77% for buy-to-let properties with 75% LTV. Mish Liyanage, Managing Director of The Mistoria Group, said: “We have experienced a sharp increase in demand from investors looking to acquire HMOs for professionals and students over the last four years.”
Since 2010 Mistoria has seen an 89% increase in investors acquiring HMOs in the North West of England. According to its figures, every £1,000 invested in HMOs in 2010 would have grown to £2,220 by 2014, while for a buy-to-let property the increase would only be £450.
Mish added: “A key driver for the rise in demand for HMO student property is partly down to the huge growth in student numbers over the last few years.” “According to UCAS, the domestic student population is continuing to expand, with an expected all-time high of 500,000 applications this year.”