The pros and cons of investing in HMO properties

HMO, or House in Multiple Occupation, properties have become an increasingly popular investment choice for landlords in recent years.

Related topics:  HMO
Aviram Shahar | Lendlord
15th August 2023
Aviram Shahar 588

These types of properties typically offer a higher rental yield than traditional buy-to-let properties, but they also come with unique challenges and risks. In this article, we’ll take a closer look at the pros and cons of investing in HMO properties. If you are right in the point of deciding if to let your property as an HMO, Here are 4 pros and 4 cons, and I hope it will help you with your decision.


1. Higher rental yield: One of the main advantages of investing in HMO properties is the potential for a higher rental yield. This is because HMOs typically have multiple tenants, each paying rent for their individual rooms. This means that the overall rental income for the property can be significantly higher than a traditional buy-to-let property.

2. Diversification: HMO properties offer landlords the opportunity to diversify their property portfolio. By investing in HMOs, landlords can spread their risk across multiple tenants, reducing the impact of any individual tenant’s late or missed rent payments.

3. Demand: There is a growing demand for affordable, shared accommodation in many parts of the UK. HMOs can be an attractive option for tenants who are looking for affordable accommodation, particularly in urban areas where rental prices can be high.

4. Flexibility: HMO properties offer landlords more flexibility than traditional buy-to-let properties. For example, if one tenant decides to move out, the landlord can often find a replacement tenant quickly without having to worry about the property being empty and losing rental income.


1. Increased management: Managing an HMO property can be more time-consuming and complex than managing a traditional buy-to-let property. Landlords will need to ensure that the property meets all the legal requirements for HMOs, such as providing suitable fire safety measures and ensuring that each tenant has access to suitable kitchen and bathroom facilities.

2. Higher costs: HMO properties often require more maintenance and repairs than traditional buy-to-let properties. This is because there are more tenants sharing the property, which can lead to increased wear and tear.

3. Higher risk: HMO properties can be riskier investments than traditional buy-to-let properties. This is because there is a higher risk of void periods if one or more tenants decide to move out, and there is a greater risk of disputes between tenants.

4. Licensing: In some parts of the UK, landlords are required to obtain a license to operate an HMO property. This can be a time-consuming and expensive process, and failure to obtain the necessary license can result in fines or legal action.

Lendlord is helping Landlords and property investors every day to analyze the potential rental yield of HMO properties by providing comprehensive financial analysis tools like the “Deal Analyser”. This can assist in evaluating the profitability of the investment and making informed decisions. Lendlord's portfolio management features can help you track and manage multiple HMO properties effectively. This includes monitoring rental income, expenses, and tenant information in one centralized location, allowing for better risk management and diversification.

More like this
Latest from Financial Reporter
Latest from Protection Reporter
to our newsletter

Join a community of over 20,000 landlords and property specialists and keep up-to-date with industry news and upcoming events via our newsletter.