EXPERT: Why HMOs are a landlord favourite once more

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HMOs are rapidly gaining in popularity with a wider range of renters on a budget, according to the boss of one of the country’s largest property investment firms.

Mish Liyanage, founder and CEO of Mistoria Group, believes HMOs now appeal to more people including professionals, especially those who are progressing through their careers and want to keep costs down.

“Rentals are high, and not everybody can afford to live in the city centre for example, so HMOs become a viable and affordable option,” he tells TheBusinessDesk.com.

Demand has also remained strong throughout the pandemic, particularly in university towns and cities such as Liverpool and Manchester where HMOs continue to be the property of choice for students looking to live with friends.

Risk spread

Liyanage adds: “For investors, HMOs often provide higher yields compared to single-let properties, risk is spread and there is more than one source of income, and we expect to do work with more investors in this area over the next year.”

He has previously warned of the pitfalls of buying properties at auction to convert into HMOs, pointing to increasing numbers of investor landlords who face expensive legal battles when they try to recover losses, due to vendors misrepresenting the legal pack.

Liyanage says: “After going through the purchase process, investors are finding that the development or conversion plans they have proposed to carry out are no longer possible as there are sitting tenants, with no evidence that the deposits have been protected with an approved scheme.”

He advises investors who are considering buying property with tenants in situ via an auction to do their homework on the legal pack, especially the AST, well in advance.

Mistoria Group owns more than 100 residential and commercial properties and manages another 1,000 properties and 3,000 tenancies across the North West.

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