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Student HMOs have become by far my preferred method of property investment! Demand continues to be strong in the student rental market as more and more students are taking up university places in the UK. And student HMOs are a breeze to manage when compared to professional HMOs.

So, could now be the right time to start investing in student HMOs or step up your investment in these properties? In this blog post, we’ll cover the benefits of investing in student HMOs, how to build your portfolio around this right now, and tips to help you stick out from the competition!

The Benefits of Investing in Student HMOs Right Now

There continues to be unparalleled demand for university accommodation and warnings over a shortfall of housing for students. Recent research by Stripe Property Group revealed 75% of all purpose-built student accommodation (PBSA) at the UK’s top universities has already been reserved for the next academic year.

It’s becoming harder for students to secure rental properties, especially in certain cities with multiple universities. The current supply of student lets can’t keep up with this continuously increasing demand.

And as it’s a relatively safe bet that universities aren’t going anywhere, this can provide great rental confidence for HMO landlords! The imbalance in supply and demand also shows room for growth and opportunities for property investors.

Currently, investing in student HMOs also comes with the benefit of being easier to manage, particularly when compared to professional HMOs. I personally think four-bedroom student HMOs are as close to passive income as you’ll find in our industry.

This is because students come and go as groups. They move in together on one day of the year and then move out 12 months later. Additionally, you can talk to them as a group and do all the paperwork once, consolidating a huge amount of work!

How to Build Your Property Portfolio Around This

There is significant value in investing in student HMOs. And HMO properties are one of the areas where we can create new rental units and help alleviate some of the pressure currently being seen across the sector.

With more landlords likely to enter the student lets industry, this could make the market more competitive and increase standards further. But this isn’t something to be fearful of as it can actually create opportunities for us! So, embrace this and work on getting your property and management service ahead of the competition.

Keep in mind that student landlords with properties in the wrong places, low specifications, and poor customer service and marketing skills will likely find their properties increasingly don’t let! This will provide opportunities for those interested in expanding into rent-to-rent as well. The key to this will be finding creative and cost-effective ways to add rental value.

Tips to Stick Out from PBSA and Other HMOs

The rise of purpose-built student accommodation and high-quality HMOs have further pushed up standards and expectations from students. The pace of movement in the student lettings sector is so quick you’ll need to continuously keep on top of this.

So, here are some of our top tips to help you stick out from PBSA and other student HMOs!

1. Provide value for money.

Especially when compared to PBSA, student HMOs can provide better value. As students are naturally on slim budgets, it’s key to provide good value. But HMO properties should still be high quality. Make sure you’re providing well-designed spaces with the right amenities as this can impact and even improve students’ everyday lives.

2. Make your properties stand out and wow tenants.

While competition will likely increase across the student rental market, well-designed, high-spec HMOs can make your property stand out and impress tenants right away. A good goal to have is to get prospective tenants to be sold on your HMOs as soon as they see photos of the space, before even stepping foot into the properties for viewing.

3. Improve your property management strategy.

While student HMOs are easier to manage as tenants are a cohesive household, you still need to have a great property management strategy.

Be responsive to tenants’ queries, take care of repairs and maintenance in a timely manner, and properly manage expectations. Providing a superior property management strategy allows you to set yourself above the competition and ensure your tenants enjoy living in your HMOs.

4. Perfect the summer changeover period.

The hardest part about investing in student HMOs is the summer changeover period, which involves getting the existing tenants out of your properties and turning the homes over to the new tenants.

Having an effective system in place for this will help you undertake this process as smoothly as possible. And once you get through this period, let the new tenants settle in, put your feet up, and enjoy what being a student HMO landlord is all about!

5. Prepare for changes to fixed-term tenancies.

While things will naturally be more difficult for student HMO landlords if fixed-term tenancies are abolished in the Renters’ Reform Bill, figure out how this will impact your portfolio and plan for it in advance. This may mean increasing rent or putting other contingencies in place. 

There are still no timescales on when this could be written into law, so if this is something that would impact you, make sure you’re reaching out to your local MP and university student accommodation offices about the unintended consequences this could have on the student rental market.

As the HMO student market comes with extensive benefits for both landlords and tenants, it may be the right time for you to either start investing in student HMOs or expand your investment in this sector! But still, make sure you’re finding ways to ‘future proof’ your portfolio.

If you have any questions about investing in student HMOs, join our free Facebook Group The HMO Community. And for more helpful resources and advice on how to start, scale, and systemise your HMO portfolio, become a member of The HMO Roadmap today!

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!