What to Know Before Buying Your First HMO in Birmingham

Thinking about investing in an HMO in Birmingham? With strong rental demand, growing student numbers, and high-yield hotspots like Selly Oak, it’s no surprise more landlords are choosing HMOs as a long-term investment strategy. Whether you’re a first-time investor or expanding your portfolio, getting started with the right knowledge - and the right agent - is essential.

At Oakmans Estate Agents, we help landlords navigate every step, from sourcing high-performing properties to securing licences and finding reliable tenants.

What Is an HMO?

A House in Multiple Occupation (HMO) is a property rented by three or more tenants from separate households who share facilities such as kitchens or bathrooms. In Birmingham, HMOs are a popular choice for both students and young professionals, offering affordable shared living in high-demand areas.

Areas like Selly Oak and Harborne have seen consistent rental demand and strong yields – and Oakmans has extensive experience managing hundreds of these properties across the city.

Why Birmingham Is Ideal for HMO Investment

Birmingham is home to over 80,000 students, attending major universities like the University of Birmingham, Aston University, and Birmingham City University. Combined with significant regeneration and growing demand for affordable rentals, the city provides an ideal foundation for HMO investment.

High-Yield Hotspots Include:

Selly Oak - Known for its proximity to the university, fast lets, and high student demand.
Harborne - Popular with postgrads and young professionals, offering a mix of rental income and capital appreciation.

At Oakmans, we guide investors to the most profitable postcodes for long-term success.

HMO Licensing and Legal Requirements

To legally operate an HMO in Birmingham, landlords must meet specific legal criteria:

Mandatory licensing applies to properties with five or more tenants sharing facilities.
Additional selective licensing may apply depending on the location.

Non-compliance can result in hefty fines - but we’ve got you covered. Oakmans handles the full HMO licensing process, ensuring your property meets all legal obligations from day one.

HMO Costs and Financial Planning

HMOs typically require more investment than standard buy-to-lets, with extra costs including:

HMO licence fees
Fire doors, alarms, emergency lighting
Gas and electrical safety certification
Durable furnishings and white goods
Ongoing management and maintenance

We provide financial breakdowns and yield forecasts, you can make informed decisions with confidence.

Knowing Your Tenant Market

Understanding your tenant type helps shape your property setup and rental strategy:

Student HMOs - Selly Oak:

Rented on joint tenancies to groups
Fully furnished and often bills-included
Strong term-time demand, minimal voids

Professional HMOs – Harborne, Bromsgrove, Northfield, Shirley:

Let room-by-room on individual agreements
Higher expectations for modern finishes
Consistent, year-round demand

Oakmans manages over 1,000 student properties and has a specialist lettings team for both student and professional tenants - giving you expert insight into what works.

HMO Compliance and Property Standards

Your property must meet essential safety and quality standards, including:

Minimum room sizes
Fire safety systems and fire doors
Annual gas certificates
EICRs every 5 years
Proper waste and recycling storage

Oakmans manages every step of HMO compliance, coordinating inspections, upgrades, and certification to keep your investment legal and stress-free.

Should You Self-Manage or Use a Letting Agent?

Managing an HMO yourself means juggling multiple tenants, maintenance issues, and constant regulation updates. Most landlords choose to outsource this responsibility.

Oakmans HMO Management Includes:

Full lettings and day-to-day property management
Rent collection and repairs
HMO compliance and licensing support
Access to exclusive and off-market investment properties

Whether you want full support or just expert advice, we tailor our service to your goals. Read more on our lettings page.

Typical HMO Yields in Birmingham

HMO yields across Birmingham generally range between 7% and 10%, depending on location and tenant strategy.

Example:
A five-bedroom student HMO in Selly Oak let at £125 per room, per week could generate around £32,500 per year in gross rent. Areas like Harborne may offer slightly lower yields but provide stronger capital growth over time.

Oakmans provides comparables, rental appraisals, and yield projections so you can invest wisely.

How Oakmans Helps HMO Investors

With years of experience in Birmingham’s HMO and lettings market, Oakmans is your trusted partner for student and professional property investment.

We offer:

Property sourcing and negotiation
Licensing and legal guidance
Yield forecasts and investment analysis
Full-service lettings and compliance management
A team of over 70 local property experts
Over 10,000 properties let and sold
1,300+ verified five-star reviews

Whether you're buying your first HMO or growing a portfolio, we offer the tools, experience, and insight to make it a success.

Final Thoughts: Is HMO Investment in Birmingham Right for You?

Investing in an HMO in Selly Oak or Harborne offers a fantastic opportunity for high rental returns, capital growth, and consistent tenant demand. But to succeed, you need to understand the local market, follow regulations, and offer a property that meets tenant expectations.

At Oakmans, we make that easy. From property sourcing to licensing, lettings to management, we handle everything - so you don’t have to.

Want to find your next HMO investment or speak with our specialist team? Get in touch today – we’re here to help you make your move with confidence.

Back to Blog