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I'm new here and this is my first topic. 

I'm trying to make up my mind which way to go.

The HMO way or the single lets way. 

I'm an expat so I won't be able to manage the property on my own. Since I will have to rely on an agent I think that investing in HMOs might be a safer bet.  the reasons are:

Rental yields are much higher.

Less rental voids since you have multiple tenants. 

There is less exposure to arrears. 

The only cons I can find are that it might be more difficult to find an agent who specializes in HMOs. 

And that there is more wear and  tear.

I'd love to hear what your thoughts.



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Additonal cons,

HMOs generally cost more to buy or convert.

Utility bills are generally paid by you the Landlord.

HMOs generally cost more to finance or mortgage.

HMO are generally more difficult to sell on or dispose of.

Rental yields are only higher than a standard BTL at full or near full occupancy rates.

There is probably more pros and cons




Conrad Paton

+44 7957 959851




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I'm in the same boat as i'm also an Expat and have been comparing the pros and cons of HMO Vs BTL. 100% agree with what Conrad has said above, i would also add;

Potentially higher tenant turnover in HMO - Letting agents (well the ones i was researching in Leeds) will change about 200GBP+ every time they need to find you a new tenant.

Letting agents charge 12% + VAT min to manage - This is again based on Leeds prices but i expect Liverpool is the same...

HMOs need furniture 

Buildings insurance is more

The caliber of tenants i would say is not as good in HMOs as it is in BTLs - Just from my research and experience, therefore i would argue that your exposure to arrears is higher. Again, this is based on Leeds which i know well but i expect Liverpool is the same. If your a working professional on a decent wage your going to get your own place in my opinion. All this depends massively on the area though...

HMO mortgages more expensive - as expats we are limited to the amount of lenders we can use, this pool reduces further when its a HMO from my research. The few lenders that will lend will only do 75% LTV on HMOs, i've found lenders for BTL that will do 80% LTV for expats.

Given the potential for capital growth in Liverpool you might be better off getting a BTL in a reasonable area then allowing some capital appreciation over the next few years, maybe add some value, then refinance to buy another property. With a HMO i'm not sure if you'd be able to do this since the value of the property will have already been on the higher side of the capital appreciation curve (assuming its a ready made one...). Just something to think about and is what my thought process has been...but all depends on your strategy...

I'm no expert just sharing my thought process and the findings of my research so far...


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  • 2 months later...

Some really good points raised above. I'm an expat also with 2 BTL properties in the UK and am considering a third sharing your dilema; traditional BTL or HMO. I prefer a hands off approach to the property and I fear a HMO may come with constant problems with regards to tenant churn, tenants not getting along, damage to the property etc. . I guess it really depends what you want out of the investment: income now (HMO) or growth (likely a traditional BTL)

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  • 2 months later...

Hi All,

im not an expat but I have been researching HMO’s in Liverpool, mostly ready made with licenses in place as it would be my first hmo. I’m concerned that your general opinion is that there is more capital growth in a stock btl as I’m hoping that a decent semi house in a good area will also give good capital growth, even if I have to spend a small amount returning it to a resi house when/if I sell.

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