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Are HMOs Worth the Hassle?

Are HMOs Worth the Hassle?


Are HMOs Worth the Hassle?


As a landlord, you might be
thinking about how to get more value from your property. While the rental
market for single tenancies is booming, have you considered a House in Multiple
Occupation (HMO)?


These days, HMOs are big
business. In simple terms, it’s where a single property is made into multiple
dwellings. And currently, the rental market is crying out for more.


HMOs are no longer dingy
bedsits of the past, they’re more like high-quality studio apartments under one


In this three-minute read,
we take you through the basics of an HMO, what you need to know about them, and
how they can make you more money.


The legal definition of an

A property is an HMO if at
least three tenants are in residence, they form separate households (i.e. not a
family or flat sharers), and they share bathroom, kitchen, and/or toilet facilities.
A large HMO is where at least five tenants share the property and facilities.


Do I need permission to
convert a property into an HMO?

Before you even consider
turning your property into an HMO, get on your local council’s website and do
some research. Many areas are subject to Article 4 directions. This basically
means you can’t convert a property into an HMO without applying for planning


You may also need a licence
to run/own an HMO, which is why it’s so important to speak to your council
about their requirements.


Why are they so popular?

It’s simple: supply and
demand. As the demand for rentals grows, so does the cost of renting. Add in
increased costs of living, and many young professionals might not be able to
afford the rent on their own. HMOs are a great way to bridge this gap,
especially in larger cities.


What are the benefits of
an HMO for a landlord?

It’s all about the money.
Many investors have found that renting out rooms individually gives them a
greater rental yield than a single tenancy.


Also, short-term occupation
means even if one room is vacant for a period, the landlord still gets an
income from the other tenants. 


What should I know if I’m
considering starting an HMO?

As with any property
investment, an HMO has its ups and downs. If you’re a part-time landlord with a
busy job, an HMO might not be the right move. There is a lot of work involved
and you’ll need time to go through the process of planning applications,
licensing, property conversions, tenant-finding, and so on.


Also, not every large house
can be easily converted into an HMO, so it’s worth getting an expert in.


The initial expense of an HMO
can be high as there are a lot of legal requirements you’ll need to meet to
make it suitable for tenants as set out here. Also,
HMOs are normally furnished, so there’s that cost on top of the building work.


If you’re a landlord looking
to find a property to convert into an HMO, or if you have rooms to rent in an
HMO, get in touch with our lettings team at CWB Property.