by Andy Graham
We are nearing the start of the 2025/26 academic year. In fact, we just finished the summer changeover period in all of our student HMOs! It’s always a busy time of year and can be stressful, but there are so many benefits when it comes to investing in these types of properties.
In fact, student HMOs have become by far my preferred method of property investment. As the founder of The HMO Roadmap, host of The HMO Podcast and having established The HMO Community, I’ve come across tons of incredible properties for students all over the country.
So, let's discuss the ins and outs of investing in student HMOs, including the benefits and how the sector works. I’ll also share a case study from our HMO community and tips to help you best invest in student lets.
Tenant demand has been strong in the student rental market. It’s a relatively safe bet that most universities aren’t going anywhere, providing great rental confidence for landlords. The ongoing supply and demand imbalance also shows the opportunities and room for growth for property investors in this space.
The upcoming Renters Rights Bill, which includes abolishing fixed-term tenancies, will have a big impact on student HMOs. Even with those challenges and uncertainties ahead, the sector is still expected to remain strong.
HMO properties are also one of the areas where we can create much-needed new rental units, helping alleviate some of the pressures being seen. This is especially the case as the Renters Rights Bill is expected to further impact the number of student homes available to rent.
Student HMOs are an absolute breeze to manage compared to professional HMOs, which can take up so much of your time. I personally think four-bedroom HMOs are as close to passive income as you’ll find in this industry!
This is largely due to students coming and going as groups. On top of that, you can communicate with them as a group and do all the paperwork once, consolidating a ton of work. While the changeover period can be stressful, you can sit back and relax a bit once that part is done.
Now let’s take a look at an inspiring case study that showcases what you can do in the student HMO market. This project is a five-bedroom HMO undertaken by Matthew Willmott, the co-founder of Colony Living. With a focus on acquiring HMOs through Purchase Lease Options, he was able to start and scale his business with minimal capital.
Matthew purchased this particular property with the tenants in situ, who were moving out at the end of June. They were already advertising it for September, so there was a tight window to refurb the property.
With the refurbishment, some joists needed replacing in the first-floor back bedroom. He got a new kitchen fitted and had the utility supplier move the electric meter as it was difficult to access, which ended up causing a two-week delay.
He also had the toilet downstairs removed and instead added an ensuite to one of the bedrooms upstairs. The house underwent a full rewire, and they updated the flooring in most of the rooms. All of the bedrooms got new furniture and a feature wall as well.
This modern renovation allowed Matthew to take advantage of the property’s space and create a striking home. Crucially, these changes increased the monthly rent roll from the original £1,700 to an impressive £2,800, excluding bills.
Purchasing the property for £210k and spending just £35k on the refurbishment, Matthew added over £12k in equity. He earned an impressive 35% return on capital employed and has more than £19,200 in net cash flow coming in annually.
If you’re looking to start investing in student HMOs or boost your portfolio, here is some of my top advice for getting this type of investment right!
Because student HMOs are tied to the academic year, the timing of when you advertise your property and when it’s ready to move into is incredibly key, so be sure to plan this out. This will get even trickier when fixed-term tenancies are abolished.
You need to know where your target tenants want to live right down to the very street and exactly what they’re looking for in their homes. Keep in mind that student landlords with HMOs in the wrong places, low specs and poor customer service will likely find that their properties increasingly don’t let.
The most challenging part of investing in student properties is the changeover period. This involves getting the existing tenants out and turning the home over to your new tenants. Put an effective system in place so you can make this process as smooth as possible.
Lastly, keep in mind that as a result of the Renters Rights Bill, the student market will see a shake up. With the removal of fixed term tenancies in particular, this will likely re-calibrate the student cycle as we know it, so make sure you’re prepared for this.
For more insights, sign up to our online learning platform The HMO Roadmap and gain access to over 60 detailed case studies. Visit thehmoroadmap.co.uk for more information.
