How to get location right for HMO coliving investment

Apr 11, 2024

Oxford – the premium market for Coliving HMO investment in the UK

Location, location, location is a popular cliché in property investment for a good reason. It’s sound advice – except for one thing: most people struggle to select the right location for their HMO investment.

Location is paramount in the world of HMO and property investment in general and in this article, we will look at a real location example – Oxford.  Few places hold as much potential as Oxford when it comes to Coliving HMO investment.

Coliving – more than an enhanced form of HMO

But before we jump into that, let us briefly explain the difference between a traditional HMO and a Coliving HMO. House in Multiple Occupation (HMO) has been a popular investment strategy in which a house or flat is split into rooms and let by different tenants separately, providing investors with lower void rate and higher yield from multiple streams of income. Coliving HMO is an evolution of this strategy where progressive investors and operators layer design, services, technology and unique community experience to offer a superior product, achieving an even higher yield and pound per sqm than traditional HMOs. 

In summary, Coiving HMOs are expected to offer more than the typical HMO given their focus on design, convenience and community and achieve a better return, as a result.

Why does location matter so much?

Let’s start with the basics. When investing in Coliving HMO, you will most certainly have to alter the property in many ways, but you cannot change its location. Locations are also not static – they are constantly changing, and they may evolve to become more or less desirable affecting the rental demand for your property. 

As for the rest, it’s a simple case of supply and demand. Coliving HMOs in locations with limited supply and abundant demand usually appreciates quicker, giving you a better return on investment. That’s why location is often the single most important factor in property investment as it has a direct impact on your property’s value, rental yield and capital appreciation potential.

Choosing a place to invest in a Coliving HMO isn’t a subjective matter as when you buy a home to live in. It’s based on a fairly static set of attributes like local market trends and demand, accessibility, access to amenities, local economy and job market and more. This is particularly true for Coliving HMOs which are mainly rented by professional tenants.

What makes Oxford a great location for Coliving HMO investment? 

Oxford is a major economic hub with many world-class universities, research centres and companies able to sustain demand and ensure sustainable capital growth for your Coliving HMO investment. Here are a few reasons why Oxford is a great location to invest in.

Constrained Supply

The availability of rental properties in Oxford is relatively limited, contributing to its investment appeal. The city has enjoyed strong population and employment growth in recent years. Yet, the housing supply has failed to keep up, which has contributed to steady rental growth in Oxford with the city commanding a 15% premium over other locations in Oxfordshire.

Diverse & Abundant Tenant Base

Oxford is home to almost 5,000 businesses providing around 113,900 jobs in addition to a large student population of over 40,000. 62% of the city’s population is of working age with an average salary over £ 40K p.a. At B-Hive Living, we cater for expat professionals from a diverse range of leading industries, from engineering to biotech. This dynamic economic cluster ensures a steady flow of new renters, a consistent occupancy rate and ultimately a resilient stream of income.

Rising Rental Yields

According to a recent Aldermore report, Oxford is one of the top three cities in the UK with great potential for landlords to invest (together with Bristol and Cambridge). Rental yields for Oxford HMO properties are on an upward trajectory, making it an attractive investment option. This means investors can expect to see their returns grow over time. 

Many techniques can help you to choose the right location and strategy to invest in, yet there is no substitute for local knowledge. As an award-winning HMO coliving developer and operator in Oxfordshire, we have a decade of experience and in-depth know-how of building and managing the best properties locally and delivering the best tenant experience and rental yields in Oxford and beyond. 

Do not hesitate to get in touch. We will help you refine, develop and manage your next coliving investment.

B-Hive Living

At B-Hive Living, we’ve been at the forefront of the coliving movement since its inception having won multiple national and international awards for our innovative business model and best-in-class management practices. Whether you wish to make your first step into property investment in 2024 or have a traditional HMO or building in Oxford and surrounding areas you wish to reposition as a professionally managed coliving asset, we’re here to support you every step of the way through our know-how, technology and innovative business model. 

Williams Johnson is the co-founder and CEO of B-Hive Living – a multi-award winning coliving brand, operator and asset manager of coliving properties with a strong track record of best-in-class design, investment and management practices. Our mission is to empower professional renters to lead a more connected, healthy and fulfilling lifestyle through co-living. This relentless focus on our residents’ well-being ensures a sustained demand wherever we operate.