Things to consider
Whilst still very popular, these are generally older properties and may require a lot more general maintenance. Whilst returns tend to be higher compared to a normal residential household, you may need to consider a higher budget to maintain the house.
HMOs are usually converted into a House of Multiple Occupation after the building has been listed as a residential property. Converting the property into a HMO comes with more regulations, changes of licensing and the property may require planning permission. It is important to look into these costs before purchasing the property if it does not already have that status.
As HMOs tend to be older properties, it can be hard to compete with the standard of housing provided by PBSA. Tenants are seeking luxury and amenities close to them, so some research into the local area and providing good quality housing for the tenants may require a large cost upfront to make the property appealing to prospective tenants.
Purpose-built student accommodation is an attractive option to potential students, with many of them charging a fixed monthly rate which includes all bills including WiFi etc. However, it is important to note that this is typically considered a long-term investment strategy, and not something that will provide you with much room for capital growth should you wish to dispose of it down the line. Due to their size and the planning restrictions on these properties, investors will typically have to purchase with cash, instead of a mortgage, which may be a factor in your decision-making process.