HMO student let with gross yield of 18%

I'm not a great fan of student lets.

I've done it before and to me it's too much like hard work. Even if you get a higher yield than a single let to a professional tenant a transient tenant community with an underlying aim to 'get one over' on the evil landlord is not my bag!

However, if I were I would be interested in a property coming up for auction next week in Nottingham. The 6 bed property on Peveril Street in Nottingham is a purpose built student HMO.

Yesterday I had a call from Matt Hilton at the auctioneers HEB informing that the landlord had just signed up the property to a house of student tenants each paying £65 per week. His estimation is that gross rent for this HMO property is about £18,000 pa. The property is guided to achieve between £90-100,000 when it goes to auction next Tuesday.

This gives a projected gross yield of about 18%+. Not bad for a landlord looking at a highly cash generative investment.

The downsides - it ain't in the best of areas. When it comes to disposal then you are probably looking at selling it to another landlord so don't expect huge capital growth and of course you will be locked in an on going war with your student tenants.

However, with any meagre savings attracting a pitence of a per cent interest and with stockmarkets looking vulnerable to national debt default then an 18% gross yield makes me seriously consider this investment. Maybe I'll do a little drive by on my way to the M1 this morning despite the government attempt to kill the HMO sector.

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