Last week the Bank of England said it was yet to make a decision on when the base rate will increase but the market consensus is that it will rise this year.
Bolton said: “Amidst increasing signs from the Bank of England that a base rate rise is looming on the horizon and could come before the year is out, buy-to-let investors should take stock of how such a rise could dent their returns.”
And Bolton said that investing in HMOs could help lessen the blow for some landlords.
He said: “Investing in the right HMO can be incredibly profitable, providing investors with a greater source of rental income than regular buy-to-let properties.
“An increased rate of income can provide a buffer and cushion against market shocks.”
PPP data shows that HMO investors could currently make up to 13% in annual returns compared to just 4% for standard buy-to-let investors.
But should the base rate rise these returns would drop to 5% for HMO investors and a staggering -8% for buy-to-let investors.
However, Bolton said HMO investment was not without risk.
He said: “Despite its resilient and robust nature, investing in HMO properties can come with added risks which could be a pitfall if they are not addressed correctly.
“Taking this into account, those exploring their options should seek practiced advice and ensure their investment will work in their favour.”
