According to the findings of a recent report from Mortgages for Business, gross yields on multi-unit freehold blocks (MUFBs) have rose to 9.3% in Quarter 4 2014 – overtaking Houses in Multiple Occupation (HMOs) by 0.3%.

Does this mean that landlords looking to maximise the profit potential of their buy-to-let portfolios should disregard the high income producing model that is HMOs? Absolutely not.

HMOs have historically and consistently outperformed other buy-to-let models and I am confident that this trend will continue. Not only are HMOs an efficient way of making use of existing housing stock and securing some of the best returns for landlords, but they provide more affordable rented accommodation options for a growing nation of tenants.

Much like HMOs, investing in MUFBs involves dividing one property with one freehold into several units, but these are self-contained studio flats or apartments, not individual rooms in a house with shared living space.

There is no doubting that investing in MUFBs is a good choice for some landlords and also offer attractive yields. However, investing in such properties is a more complex project that often requires more experience, more capital from the outset and, in some cases where the property hasn’t already been converted, a more technical and costly refurbishment.

For most property investors, especially those with a restriction on the funds they have to invest or a lower level of experience, HMOs are a more accessible option. They can also typically be converted at a lower cost and in a faster timeframe, allowing a landlord to generate that all important steady flow of rental income much sooner. And, this kind of high income investment strategy can help transform a small sum of capital into a larger, more valuable property portfolio.

It is important to understand that just one lender comparing one asset class to another gives only a limited and generalised view of the true picture. Whilst it makes interesting media headlines, it hides the fact that HMOs can actually be divided into three sub-asset classes: HMOs for non-working people (e.g. LHA), HMOs for students and HMOs for working tenants.

I chose to operate and build an income generating portfolio in the high-end market of HMOs for young professionals and key workers. This was a very strategic and planned decision after reviewing alternatives thoroughly. While there were many reasons for this decision, the primary one was because my evidence showed that it was the safest and most profitable asset class to invest into.

An average PPP HMO property generates 11% gross yield – 1.7% higher than MUFBs as according to this report.

Ultimately, there is no right or wrong strategy with investing in property. Certainly, investment decisions should not be made based on newspaper headlines. Nothing can replace quality research, planning and due diligence and this should be laid against your own investment objectives, personal and financial circumstances and experience.