Without doubt one of the main buzz words in the residential property investment market within the last couple of years has been HMO (Houses of Multiple Occupation).

HMOs, where you rent out rooms individually as opposed to one house which can sometimes triple the rental income, have seen a substantial increase in demand since the market turned in 2007/8. The reason being that with very little, if any, (real) capital growth in the market, many investors are looking for income and HMOs can provide that income, if they are done correctly.

I've been investing in the HMO market since 2006 and have witnessed a gold rush like scenario towards HMOs from aspiring investors over the last few years and I've also witnessed many people getting it horribly wrong with some projects and investments.

There are four main HMO markets; professionals, workers, local housing allowance (LHA) tenants and students. Depending on your area, some tenant types work better than others. For example professional HMOs work exceptionally well in London, student HMOs work very well in Liverpool, LHA HMOs work very well in Milton Keynes, and yet time after time I see investors trying to make their HMO property work in the wrong market.