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  • HMO & Multi-Lets

    HMO in Liverpool?

    I am looking to buy a minimum 4 bed HMO within a mile radius of Liverpool city centre.

    Is there anybody else that has done this that can share their experiences and tell if its worth doing please. Really keen to hear other stories.

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    There is a lot of talk on Facebook property groups about over-saturation of HMOs and Liverpool was one of the areas mentioned.





    I would recommend contacting Simon Topple as he is active in the HMO Liverpool market.

    ​I will drop him a line inviting him to comment here as well.

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    We do a lot of HMO management and HMO conversions in Merseyside (see the link to our Facebook page where I have just posted a video on a pub conversion to an 8 bed luxury HMO -  https://www.facebook.com/WirralPropertyGroup/) 

    I second the previous comments about oversupply in certain areas.  There are a lot of property sourcers pushing small HMO (mini-mo's) without any clear plan who is going to occupy them.  Postcode areas L6 - L8 and L15 are particularly badly oversupplied.  With mandatory landlord licensing, Article 4 Directions, additional HMO licensing and with the Council having an eye on keeping the fines imposed on landlords, it takes a brave investor to jump in without a clear plan on how to fill and manage the property over the medium term.

    There are some great investment opportunities in Merseyside but I am not convinced that small HMO's in Liverpool centre south-eastern areas are amongst the best options you can choose.

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    Andrew McCausland

    Hamilton Square Estates Ltd

    Wirral Property Group Ltd

    Sourcing and renovating investment property since 1994


    I brought a very large 4 bed/ 2 lounge Georgian era property for this very reason but in Manchester, even though they were marketing these to me left-right and centre. Never fell for these con artists selling mini-hmo's for students. They think students are gerbils that belong in cages and will be happy with broadband. Possibly in my case that might be half true - especially looking at their gerbil-like living habits but even students will turn their nose up than spend 4 years in a cage.

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    I was also looking at investing in student HMOs in Liverpool but in L15.


    Are there any other areas of the city we should consider if l6/l7 has over supply?

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    I see my comment on Facebook has made an appearance!

    My company has been letting and managing in Liverpool for over a decade and we have seen the change of trends within the student HMO market.  About 3 years ago investors got wind that you could make pretty good yields and piled in, which is continuing. 

    Developers then joined the game and flooded the market, meeting the demand that the investors created.  The buzzword for a few years was six bed conversions - these have been heavily plugged, and we see these on facebook on an almost daily basis, with investors being applauded for their conversions and their success in letting.  However this has created a huge oversupply and these are now appearing on markets such as Airbnb, or via professional lets by the room. 

    We no longer take on six bed converted houses in L6 as there is simply too much competition and tenants are very aware of this (I viewed with a group who were viewing five more six beds after ours, all with different agents).

    My advice would be to steer well clear of L6 at the moment.  The larger 3 bed properties are working and will continue to work well, but 4 beds and above are at risk.  The standards expected from students are increasing, and you have to convert cleverly to beat the market.  Adding in a second bathroom and gaining 4 good sized doubles is essential.

    Avoid roads such as Tudor and Cambria Street - a local sourcer (Vicki Peers) recently did a video blog about this, with a comment that there have been 23 of these tiny conversions by one builder that are being sold on to unsuspecting investors.  These will fail and are failing (we've dealt with one that has changed hands 3 or 4 times in the last 3 years).

    L7 historically has had very strong demand but standards now have to be far higher and you will face stiff competition - there is a move to add more ensuites, so your competition will be tougher.  L15 is doing very well at the moment (it is our strongest area, in terms of time to let) - still with an oversupply but a good house in a great location will give you good returns, especially if you can secure something within the A4 area that has existing C4 use.  City centre will do well if you can stomach sub 8% gross yields.

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    Professional student and residential lettings in Liverpool.
    http://www.topproperty-services.com
    Twitter: @ToppropertyUK

    Hi Simon.

    Thanks for your info. Any chance of getting that video in Tudor Street and Cumbria Street. I actually viewed one and had an offer accepted on Tudor Street. It is already tenanted and would like to dig deep and pull out of the deal before it gets too far. Thanks

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    I found this video by Vicki which is titled "Where not to buy an HMO in Liverpool":


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    Thanks Vanessa but in this video Vicki talks more about the L12 area.

    Najmul

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    I know, but it was the only video I could find.  Vicki has since directed me to the correct video, but it is on facebook, not youtube, so cannot be embedded here.

    I think Vicki is trying to sort that out and we will add the correct video if we can.

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