Finding & Securing The Best HMO Deals In The Current Market (Including Tips for HMO Investors)

There are some good HMO deals on offer right now, but you need to find them and secure them at the right price in order to effectively expand your HMO portfolio. It can be disheartening at times, especially with the ongoing economic challenges, but there are some things you can do to help you better find and secure deals!

In this blog post, we’ll take a look at what’s happening in the UK property market, how this impacts HMO investors wanting to expand their property portfolios, and tips for finding and securing deals right now!

A Look at the UK Property Market

As interest rates have been on the rise and with ongoing economic uncertainties still impacting so many of us, the pace of the UK property market has slowed down. Buyer demand is at lower levels than the highs seen across the past few years.

On 3 August, the Bank of England increased the base interest rate by 0.25% to 5.25%. This was the 14th consecutive rise to the base rate, which is sitting at a 15-year high. Because of this, mortgage rates are much higher right now than they were a year ago.

This, along with the current market conditions, has led to a higher number of sellers accepting offers much lower than the asking price. According to Zoopla, 42% of sellers have been accepting offers more than 5% below the asking price, which is the highest percentage in five years. And 15% have even been accepting offers 10% lower than the asking price.

How Does This Impact HMO Investors Expanding Their Portfolios?

There are definitely opportunities to secure good HMO deals at the moment, which can make it a great time for you to expand your portfolio. But you need to understand that finding HMOs isn’t just something you can do on the side – no matter what’s happening across the property market! It must be one of your top priorities.

As there has been a rise in sellers accepting offers much lower than asking prices, we all need to keep in mind that an asking price doesn’t mean that that’s the true value of the property. It also doesn’t mean that’s ultimately what someone will end up paying for it!

So, you need to make sure you’re effectively finding, assessing, and securing HMO deals to create a successful and sustainable HMO portfolio – and navigating whatever is currently going on in the UK property market.

Tips for Finding & Securing HMO Deals Right Now

There are a number of things you need to do to make sure you’re finding and securing the right HMO deals for you and your business. Here are some of my top tips to help you do that right now!

1. Strengthen your buying position.

This is massive right now. The more cash you have on hand, the better buying position you’ll be in, especially with the higher interest rates. If you could even get into a position where you’re paying fully with cash, this could give you a huge advantage. And keep in mind that you can further strengthen your buying position by raising private finance.

2. Get your finances sorted.

When you’re looking for HMO deals in today’s market, it can be helpful to have your finances sorted ahead of time. This can help you stand out as a better buyer and help quicken up the buying process too, especially if you’re buying with a mortgage.

3. Work on your deal analysis.

There are a number of areas that you need to stress test within your deal analysis. This will help you see what a deal might look like under ANY circumstances, which has become particularly crucial due to the cost-of-living crisis. Looking at the bigger picture can also help you make more informed decisions about every possibility and scenario.

4. Keep putting in offers and be consistent.

Don’t be embarrassed about putting lower offers in – even if you don’t think it will be accepted. If someone else puts in a higher offer than you that ends up getting accepted, there’s still a chance that the deal could fall through later on. By already putting an offer in, you’ll be at the top of the agent’s list if the property is being put back on the market.

Additionally, to effectively scale our HMO portfolio, you need to constantly be looking for and assessing deals. Good deals won’t just fall into your lap! Being consistent with your finding strategy will significantly increase your chances of unearthing deals that actually stack up. If you turn away for just a moment, you could miss out on a great deal.

If you can improve your strategy for finding and securing HMO deals, you will find the whole process much easier and start to build a more profitable and sustainable HMO portfolio.

To learn more about finding and securing HMO deals, there are lessons on this within The HMO Roadmap, so become a member today to help you master the pillars of finding deals!

About the Author:

Andy Graham is the founder and the lead trainer at The HMO Roadmap! He is also the co-founder of The HMO Mastermind and Smart Property, a specialist HMO property investment and management company. He writes as a regular columnist in different magazines about a variety of HMO topics and is the host of The HMO Podcast! Follow Andy on Instagram!