Almost every last bit of residential real estate sold in the UK today is listed on Rightmove. But one of the main reasons we established HMOsales was because finding HMOs on the big platforms like Rightmove, Zoopla and OntheMarket were difficult. You can filter for all HMOs for sale in a particular area, and you can’t distinguish what is an HMO and what is a house.
So as an investor looking for HMOs for sale, how can you find them? Where can you look and find HMOs for sale before any of your competing buyers?
Well today we have broken down our top 10 ways for you to source HMOs off market and ahead of your competitors. Lets dive in.
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Online sales Websites
Here’s a tip that might surprise you: some HMO sellers are listing their properties on sites like Ebay and Facebook Marketplace. Why? Well, for starters, not everyone wants to go through an agent. Maybe they’ve had a bad experience in the past, or perhaps they just don’t know which agent to trust with something as specialist as an HMO.
And let’s not forget about the cost. Listing directly can save a pretty penny in agent fees. So, for those looking to pocket a bit more from the sale, these platforms are a go-to. They’re easy, they’re familiar, and they’re free or cheap to list on.
For us property investors, this is a golden opportunity. It means we can find HMOs that aren’t on the usual property sites. So, next time you’re scrolling through Facebook Marketplace or Ebay, keep an eye out for those HMO listings. You might just stumble upon the perfect deal.
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Business Brokers
Now, when you think of business brokers, HMOs might not be the first thing that comes to mind. But here’s the thing: business brokers don’t just deal with businesses; sometimes, they handle properties too. Let me explain.
Imagine a nursery or a veterinary surgery. These places need a building to operate from, right? Now, some of these businesses will simply rent a space, but others? They own the building they’re in. These businesses that own their properties are what we call OpCo PropCos, which stands for Operating Company with a Property Company.
In most cases, the business side of things (the nursery or vet practice) and the property side of things (the building they’re in) are split into two separate entities, often referred to as SPVs (Special Purpose Vehicles). One SPV for the business, and one for the property.
Now, here’s where it gets interesting for us property investors. HMOs are, in many ways, just like these OpCo PropCos. Think about it: they’re properties, but they also operate like mini businesses. Each tenant is like a mini revenue stream. And because of this business-like nature, some HMO landlords prefer to sell through business brokers rather than traditional estate agents.
So, the next time you’re looking for an HMO, consider reaching out to a business broker. You might find that perfect HMO listed as a business opportunity, waiting for the right investor to come along.
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Commercial Agents
Commercial agents have a broad portfolio, often encompassing industrial units, high street properties, retail spaces, warehouses, and offices. Occasionally, they’re approached to list HMOs for sale. While HMOs can technically be categorised under commercial agents due to their income-generating potential, the typical clientele of these agents might not always see the appeal.
The primary draw of HMOs for investors is their robust cash-making capability. They’re commercial vehicles in the property world, with each tenant contributing to the property’s overall yield. However, the buyers that commercial agents typically cater to might be more inclined towards traditional commercial spaces, such as warehouses or retail units.
This distinction means that while HMOs might appear in a commercial agent’s listings, they might not receive as much attention from the agent’s regular clientele, who are more focused on other types of commercial properties. For discerning investors, this presents an opportunity to explore HMO listings with commercial agents, potentially finding hidden gems that others might overlook.
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Newspaper & Print Media adverts
Newspapers, despite being seen as a bit old-school, can be a goldmine for property deals. Landlords looking to buy might place an advert, hoping to catch the eye of someone thinking of selling. Similarly, HMO landlords wanting to sell might pop an advert in the local paper, sidestepping agents and connecting directly with potential buyers.
It’s worth noting that this method is often a go-to for the older generation. It’s what they know and trust. And while it might not be the first place younger folks think to look, it’s proof that some methods stand the test of time.
And it’s not just newspapers. Property magazines, often overlooked in favour of online listings, can also have adverts from HMO landlords. So, whether you’re actively looking or just happen upon one, it’s worth a glance. You never know what opportunities might be tucked away in those pages.
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Planning Portals
Planning portals are a centralised hub detailing all new planning applications within a specific area. For those with an eye on acquiring HMOs, these portals can be a treasure trove of information. Access is entirely free, allowing potential buyers to sift through applications with ease. By simply inputting keywords like “HMO” or “house in multiple occupation”, you can pinpoint applications that align with your interests.
But that’s not all. Each application typically comes with contact details, be it of the property owner or the architect responsible for the plans. This direct line of communication can be invaluable for those looking to make enquiries or even put forward an offer.
The range of HMOs listed on planning portals is diverse. From fully operational HMOs to those that have secured planning permission but haven’t been developed, the options are vast. Additionally, there are HMOs that have only recently had their planning applications approved or denied. Reaching out to these landlords could present an opportunity to purchase, especially if they’re considering selling following the outcome of their application.
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Architects
Navigating the world of HMOs, especially larger ones with seven bedrooms or more, involves a dance with planning permissions. And who’s right at the heart of these permissions? Architects. Their involvement in the planning and design stages means they’re often in close contact with HMO landlords.
Given their professional relationships, architects have a pulse on the local HMO scene. They’re aware of landlords who might be considering a sale or those who are just entering the market. Tapping into this network can provide investors with leads that aren’t available through traditional channels.
But it’s not just about the connections. Architects can act as intermediaries, initiating conversations with potential sellers on your behalf. In return for their insights and introductions, you’d offer them a finder’s fee, making it a win-win situation.
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Relationships with Agents
Traditional Agents: High street agents or those specialising in specific locales are often the first stop for many property transactions. Their local knowledge is unparalleled, making them the go-to for most property sales. However, their expertise might not always extend to the nuances of HMOs. This gap presents a unique opportunity. By building a relationship with these agents, you position yourself as their HMO specialist. When they come across HMO listings, you could be their first call, ensuring you get early access to potential deals.
Auction Agents: Auctions are a misunderstood avenue. While many associate them with distressed sales, they offer a level of transactional certainty that’s hard to match. The finality of the gavel means that within 28 days, the property changes hands. For HMO investors, the key is to be proactive. By fostering relationships with auction agents, you can get early notifications about HMO listings. This allows you to review and make offers as soon as they’re available, ensuring you’re always ahead of the competition.
Sourcing Agents: These are your property scouts. They understand your HMO criteria and actively search the market on your behalf. A strong rapport with a sourcing agent can be transformative for your portfolio. They can pinpoint properties that align perfectly with your investment strategy, streamlining the acquisition process.
Specialist HMO Agents: That’s where agencies like ours come into play. With a deep-rooted understanding of the HMO market across the UK, we’re your gateway to a diverse range of HMO for sale across the UK. Our 14-year track record speaks for itself. We pride ourselves on offering exclusive access to HMO listings even before they’re public, ensuring our clients always have the upper hand.
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Networking Events
Property investors frequently flock to networking events, which are abundant across the UK. Major cities and towns often host multiple events each month, providing a platform for attendees to exchange insights and forge connections.
These events are especially valuable for those eyeing HMO investments. They offer direct access to local HMO enthusiasts, presenting a chance to discuss potential opportunities and gather market intelligence.
One of the underrated benefits of attending these events is the chance to meet local builders. Given their work, they often collaborate with HMO landlords and are privy to potential sales or leads. Cultivating relationships with them can lead to early notifications about HMO deals in the pipeline.
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Council HMO Register
Every local council maintains an HMO register, a comprehensive list of HMO landlords within their jurisdiction. This register is more than just a list; it’s a valuable resource for investors keen on HMO properties.
Thanks to the Freedom of Information (FOI) Act, you can request access to this database. What you’ll receive is a detailed breakdown: the HMO address, the number of bedrooms, and crucially, the contact details of the owner. This includes their home or registered address, providing a direct line of communication.
With this information in hand, you can take a proactive approach. Drafting and sending letters to these landlords can open up conversations about potential sales. It’s a chance to express your interest and potentially secure an off-market deal, bypassing the usual channels and competition.
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Property Valuers
If you get friendly with a property value then they can certainly give you tip offs of properties that may be coming to market and give you the edge by getting in there before other buyers do.
Summary
So there you have it, our definitive list of finding HMO deals before anyone else. Like most things in property, it’s important to emphasise that relationships is invariably the common trend that runs through all of these strategies. Property, whilst it’s an inanimate object, is all grounded in strong relationships with your power team. Any of the above sources can easily form part of your power team as you develop your HMO portfolio.
We’ve been sourcing, selling and buying HMOs for clients for 14 years. If you are looking for a dedicated national HMO estate agent and if we can help you with your HMO journey then please get in touch.
