Bradford 150 VS Leeds 638 - some explanations:
to understand whether there is a demand for HMO, we can use www.spareroom.co.uk// to search the area, check the rent and calculate whether your purchase can make the yield you expect.
You can do this simple calculation
no. of rooms x monthly rent x 12 months / purchase price = Return on Investment
To reduce the risk of your investment, you could:
1. Reduce your expect rent of 10%
2. Increase your expected expense by 10%
3. Include 1 month of vacant period in your rental
If the number still works then you are on the safe side.
From this search (the picture above - Bradford 150 VS Leeds 638) , it is easy to understand that room-sharing usually works in area where property value is higher (Leeds), people couldn't afford to rent the whole house and would therefore rent a room instead. From this line of reasoning, lower budget area (Bradford) would have less demand for room-sharing.
When you look at room-share in Bradford, it is concentrated in the City Center or the University Area, there is still demand but it is more limited to flats or student accommodations. From the property training, we would need to find areas that already have a sufficient no. of room-shares as a key indicator if HMO will work out which I will also agree.
Please comment on our blog post - "finding an area for HMO"
to understand whether there is a demand for HMO, we can use www.spareroom.co.uk// to search the area, check the rent and calculate whether your purchase can make the yield you expect.
You can do this simple calculation
no. of rooms x monthly rent x 12 months / purchase price = Return on Investment
To reduce the risk of your investment, you could:
1. Reduce your expect rent of 10%
2. Increase your expected expense by 10%
3. Include 1 month of vacant period in your rental
If the number still works then you are on the safe side.
From this search (the picture above - Bradford 150 VS Leeds 638) , it is easy to understand that room-sharing usually works in area where property value is higher (Leeds), people couldn't afford to rent the whole house and would therefore rent a room instead. From this line of reasoning, lower budget area (Bradford) would have less demand for room-sharing.
When you look at room-share in Bradford, it is concentrated in the City Center or the University Area, there is still demand but it is more limited to flats or student accommodations. From the property training, we would need to find areas that already have a sufficient no. of room-shares as a key indicator if HMO will work out which I will also agree.
Please comment on our blog post - "finding an area for HMO"