A Guide to HMO Investment

people raising wine glasses around a table


When it comes to buy-to-let, Houses of Multiple Occupation (HMOs) can be extremely rewarding in terms of a return on investment. However, there are several factors that you need to carefully consider when making this kind of purchase, including how involved you would like to be, the type of habitant you want renting, and where the best HMO location for you to invest in is.

Getting these details right is crucial when it comes to making your investment a success.

Hands On or Hands Off?

top floor of a tower block

Deciding how you would like to manage your HMO property is an important step. Will you choose to be closely involved, and thereby potentially cut costs? Or, will you hire an HMO company to take care of your property instead?

Your circumstances and aims will influence your decision here. For instance, if you have found a suitable location close to where you are based and are willing to make the time commitment, then managing the HMO yourself may be a practical option.

On the other hand, the benefits of hiring an HMO company to take care of your portfolio are that you will have much greater freedom in terms of the location, at the cost of a percentage of your profit.

How to Choose Your HMO Location

Knowing exactly what you want is essential for finding the best location to purchase an HMO property.

For example, if you want to create student accommodation, a location close to a university and in an area that students commonly live is essential. Alternatively, if you are aiming to attract young professionals as your tenants, then your HMO should be near transport links, business parks and local amenities.

So, where are the best areas for HMO investment? Keep reading to learn our top picks for students and professionals.

The Best Locations for Student HMOs

close-up of a block of flats


  1. Birmingham– a self-proclaimed ‘student city’, Birmingham is home to 80,000 students, studying at 8 universities.

  2. Nottingham– home to both the University of Nottingham and Nottingham Trent University, this city is also renowned for the affordability of its property.

  3. London– though properties in the capital are comparatively expensive, London is also a high-profit area due to demand from its high student population, which includes wealthy overseas students.

  4. Coventry– attracting over 35,000 students every year and in close proximity to the University of Warwick, Coventry is a great place to invest in student housing.

  5. Glasgow– with several universities and colleges, and property on the affordable end of the scale, Glasgow is a strong contender.

  6. York– the universities and transport links here mean that you’re going to see a great return on any investment.

  7. Reading– another location boasting two universities, Reading is a rapidly expanding city ideal for students.

  8. Oxford– though property prices are high, rental rates are also on the upper end of the scale, helping you comfortably turn a profit.

The Best Locations for Professional HMOs

internal shot of a block of flats

  1. Southampton –with almost 13,000 businesses operating in Southampton, you’ll find plenty of young professionals looking for house shares.

  2. Manchester– as one of England’s largest business cities, there are plenty of opportunities in Manchester that will see a great ROI.

  3. Nottingham– not just a thriving student city, but an excellent place for business. Nottingham is an ideal location to set up both student and professional HMOs.

  4. Blackpool– this seaside down isn’t just great for tourists, it’s also a very profitable place for buy-to-let investors.

  5. Kingston Upon Hull– with roughly a 7.5% gross rental yield, HMO property in Kingston will see you with a fair return.

  6. Birmingham– another city that’s ideal for both students and professionals, Birmingham is one of the West Midlands’ biggest hubs for business.

  7. London– we can’t mention business hotspots without including the capital. Though London property prices are the highest around, the location’s desirability means renters should be easy to attract.

  8. Portsmouth– this port town plays host to hundreds of businesses and is home to thousands of young professionals.

Pin-pointing the exact places in these cities to purchase homes will require a lot of in-depth research which is best done yourself, with help and guidance from an experienced local property expert.

Maximising Profit

As well as choosing an optimum location, it’s important to remember that the best way to turn a profit is to get the best rates on your mortgage. So, talk to a HMO mortgage broker with access to the whole market in order to ensure you’re in the best possible position.

Talk to an Expert Today

Here at Pure Property Finance, we’re experienced at sourcing specialist HMO finance, whether you are looking to buy or refinance a property.

Call us today on 02920 766 565 to discover your options and receive a tailored quote.


Originally published: 12 Aug 2014; updated 21 September 2021

Article By Ben Lloyd

September 21st, 2021

Ben is the Director and Co-Founder of the Pure Group and Managing Director of Pure Property Finance.

Following a career in Barclays, where Ben was in the real estate finance team for 8 years, he decided that the market needed a more forward-thinking type of commercial brokerage so founded Pure Commercial Finance (now Pure Property Finance), the first company within the Pure Group.

Ben has extensive experience across the real estate sector and has participated in over £2bn of real estate transactions during the course of his career.

Ben oversees the general strategy at Pure Group and works with the senior leadership team to drive the Group forward. Ben is also on the Executive Committee of FIBA.

See more articles by Ben

Ready to talk finance?

Call us and speak to one of our experts

02920 766 565 Request a Callback