HMO Property Investment: Samuel Johnson,HMO King

Discover how Samuel Johnson transitioned from an IT job to building a thriving HMO property investment portfolio in the UK, generating passive income and financial independence through innovative strategies like rent to rent.

If you’re exploring ways to achieve financial independence through property, HMO property investment might be the game-changer you’re looking for. In a recent episode of the Self-Unemployed podcast, host Colin Munro sat down with Samuel Johnson, known as the “HMO King,” to dive into his inspiring journey from a traditional IT career to managing 11 Houses in Multiple Occupation (HMOs) with 84 rooms in the UK. Samuel’s story is a masterclass in leveraging HMO strategies, particularly the rent to rent model, to create a profitable property business without owning properties outright. Here’s how he did it—and how you can start your own HMO property investment journey.

What Is HMO Property Investment?

A House in Multiple Occupation (HMO) is a property rented out to multiple tenants who share communal spaces like kitchens or bathrooms. Think of it as a modern evolution of the old-school “bedsit,” often housing working professionals, students, or others seeking affordable, flexible living. HMO property investment involves acquiring, managing, or controlling these properties to generate higher rental yields than traditional single-let properties.

Samuel Johnson specializes in HMOs because they offer significant cash flow potential. “HMO is where you have a six-bed or seven-bed property with individuals sharing communal spaces,” he explains. By targeting properties that need a bit of TLC, Samuel transforms them into desirable rentals, commanding premium rents and creating passive income property streams.

Samuel’s Journey to HMO Property Investment Success

Originally from South India, Samuel spent 11 years in IT, traveling globally for work before landing in the UK for a short-term assignment. After a decade in a demanding job, he craved financial independence and self-employment. “I always wanted to do something for myself,” he says, noting that a traditional job couldn’t break through the “middle-class barrier” he faced.

Samuel’s entry into property investment UK began when he considered buying a home in the UK. However, high interest rates in India (8-9% vs. the UK’s 2% at the time) and visa-related mortgage challenges shifted his focus. Inspired by TV shows like Homes Under the Hammer, he discovered the potential to increase property value through renovations—a concept less viable in India, where property values are tied to land rates rather than improvements.

Through YouTube, podcasts, and Samuel Leeds’ one-pound crash course, he learned about alternative strategies like rent to rent and lease options. These low-capital approaches allowed him to control properties without buying them, paving the way for his HMO empire.

The Rent to Rent Strategy: A Gateway to HMO Profits

Samuel’s primary strategy is rent to rent, a powerful approach for HMO property investment that requires minimal upfront capital. In rent to rent, you lease a property from a landlord, then rent it out to tenants at a higher rate, keeping the profit margin. For HMOs, this means renting out individual rooms to maximize income.

Here’s how Samuel makes it work:

• Targeting Tired Properties: He seeks out HMOs in poor condition, often student rentals neglected by older landlords. “I go for the worst HMOs in town,” he says, identifying properties where he can add value.
• Negotiating Low Rents: By offering to renovate and manage the property, Samuel negotiates rents as low as £300-£350 per room, compared to the landlord’s typical £500 per room for a six-bed HMO (£3,000 total).
• Adding Value: He invests in light renovations—new paint, updated lighting, and Wi-Fi/TV packages—to attract professionals willing to pay £570-£600 per room, all bills included.
• Guaranteed Rent for Landlords: Samuel pays landlords a fixed monthly rent, regardless of occupancy, eliminating their void periods and maintenance hassles. “The landlord doesn’t get calls or deal with tenants,” he notes.

This strategy yields profits of £100-£125 per room, with Samuel’s 84 rooms generating over £8,000 monthly—far surpassing his IT salary. His return on investment for renovations is often recouped within six months, making rent to rent a low-risk, high-reward approach to HMO property investment.

Why HMO Property Investment Works for Landlords and Investors

For landlords, Samuel’s model is a win-win:

• Hands-Off Management: Landlords avoid tenant issues, maintenance, and void periods.
• Property Upgrades: Samuel’s renovations, done at his expense, increase the property’s appeal and value. One landlord even revalued their property after his improvements.
• Guaranteed Income: Fixed rent payments provide stability, ideal for landlords with mortgages.

For investors like Samuel, HMOs offer:

• High Yields: Multiple tenants mean higher rental income than single-let properties.
• Scalability: Samuel controls 11 HMOs without owning them, proving you don’t need deep pockets to start.
• Flexibility: Rent to rent allows quick entry into property investment UK without long-term commitments.

How Samuel Leeds Academy Fueled Samuel’s Success

Samuel credits much of his success to the Samuel Leeds Academy, which he joined after attending a one-pound crash course and a four-day HMO training. “The cost of a mistake is much higher here,” he says, emphasizing the value of mentorship in a new country. The academy provided:

• Expert Guidance: Mentors helped him avoid pitfalls and navigate HMO regulations.
• Networking Opportunities: Inner circles, WhatsApp groups, and monthly dinners connected him with like-minded investors.
• Practical Knowledge: Courses on rent to rent and HMOs gave him the confidence to act.

For aspiring investors, Samuel recommends starting with a low-cost crash course (check the link in the podcast description) to explore HMO property investment without commitment.

Tips for Starting Your HMO Property Investment Journey

Ready to follow in Samuel’s footsteps? Here are his top tips for breaking into HMO property investment:

1. Learn the Market: Research HMO demand in your area, focusing on towns with high professional or student populations, like the West Midlands.
2. Master Negotiation: Secure low rents by targeting tired landlords and offering value through renovations and guaranteed rent.
3. Build a Power Team: Hire reliable handymen, cleaners, and admins to handle maintenance and tenant issues, freeing up your time.
4. Invest in Education: Join courses or academies to learn strategies like rent to rent and avoid costly mistakes.
5. Start Small: Begin with one HMO, refine your process, and scale as Samuel did, from one property to 84 rooms.

The Future of Samuel’s HMO Empire

Samuel’s journey is far from over. He’s exploring buy refurbish rent refinance (BRR) to own HMOs outright and testing serviced accommodation (SA) with a small property. His goal is to expand into nearby towns, manage HMOs for other landlords, and potentially secure lease options to buy properties he’s improved. “I want to exhaust this option until I don’t want to do any more in the town,” he says, showcasing his strategic approach.

Take the First Step Toward HMO Property Investment

Samuel Johnson’s story proves that HMO property investment can be a path to financial independence, even for those starting with limited capital or experience. By leveraging rent to rent, he’s built a portfolio that generates significant passive income while helping landlords achieve hassle-free returns. Whether you’re an aspiring investor or a landlord seeking hands-off management, HMOs offer immense potential.

Want to learn more? Check out the Self-Unemployed podcast episode with Samuel Johnson for a deeper dive into his strategies. If you’re ready to explore HMO property investment, consider attending a Samuel Leeds one-pound crash course (link in the podcast description) to kickstart your journey. As Samuel says, “Invest in your education”—it could be the key to your own HMO success.

Have questions about HMO property investment or rent to rent? Connect with Samuel on Instagram at @samueljohnson_property or share your thoughts in the comments below!