Simon is back in Southampton, revisiting a property he first saw four months ago during its conversion into a seven-bed high-end HMO. Now fully finished, he catches up with Ian and Laura to see the final result and discuss their experience.
Smart Design and Practical Living
The communal areas have been carefully designed with both comfort and functionality in mind. The kitchen is equipped with double fridge-freezers, labelled cupboards, and ample cooking equipment to ensure that all tenants have their designated storage space and can prepare meals without hassle. By providing a well-stocked kitchen, Ian and Laura have made sure that tenants don’t need to bring everything themselves, reducing clutter and creating a more organised environment.
A separate washer and dryer system allows multiple tenants to do their laundry simultaneously, preventing long waiting times. The space has been set up with efficiency in mind, catering to the needs of busy professionals who appreciate the convenience of a well-thought-out layout.
Beyond practicality, the communal areas also promote social interaction. Comfortable seating and a TV area provide a welcoming environment where tenants can unwind, watch television, or simply connect with housemates. This design encourages a sense of community, which is often a key factor in the success of co-living arrangements.
To maintain a high standard of cleanliness, a professional cleaner visits fortnightly. In addition, tenants have been provided with cleaning supplies, allowing them to take responsibility for their shared space. This dual approach ensures that the communal areas remain tidy and enjoyable for everyone, further reinforcing the premium feel of the property.
Strong Financial Performance
This HMO has been designed not just for high-end living but also for strong financial returns. The property achieves an average rent of £825 per room, with larger rooms reaching £950. This pricing is higher than the typical rental market in Southampton, reflecting the premium quality of the property and the additional amenities provided.
With full occupancy, the property generates a gross rental income of just under £6,000 per month. After deducting expenses such as the mortgage, utilities, and management fees, the net monthly profit sits at approximately £2,300. Over a year, this equates to around £28,000—surpassing the average UK salary and highlighting the financial viability of well-executed HMO investments.
Ian and Laura purchased the property for £267,750, with a £225,000 build cost, including contingency, and £38,000 in additional expenses covering auction fees, legal costs, and architectural work. This brought the total project cost to just over £530,000. However, with a final GDV (Gross Development Value) of £675,000, they were able to refinance and leave just £24,000 in the deal. This resulted in an impressive return on investment (ROI) of over 100% within the first year, demonstrating how strategic property investment can generate substantial returns.
“This design encourages a sense of community, which is often a key factor in the success of co-living arrangements.”
Scaling Up and Investing Further Afield
With three HMOs in progress, Ian and Laura are expanding their portfolio, including investments in a second geographical area. They have leveraged experts, including HMO-specialist builders and letting agents, to streamline operations.
For those looking to build a high-end HMO portfolio, Simon is hosting an online training session to break down the process. Click the link at the bottom to learn more.
Advice for Aspiring HMO Investors
One of the biggest lessons from this project is the importance of investing in high-quality refurbishments from the start. Cutting corners may save money initially, but it can lead to higher maintenance costs and lower rental returns in the long run. Well-designed, fully equipped properties attract better tenants, reduce void periods, and ensure a steady rental income.
Another key takeaway is the benefit of working with professionals. Whether it’s experienced builders, specialist letting agents, or interior designers, surrounding yourself with the right team can make the process smoother and more efficient. Ian and Laura have built strong relationships with experts who understand the unique demands of HMOs, allowing them to scale their portfolio with confidence.
For those looking to build a high-end HMO portfolio, Simon is hosting an online training session to break down the process. He will cover how to find the right properties, finance deals, and maximise returns while keeping investments hands-free. Click the link below to learn more and take the next step toward financial freedom through property investing.
