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HMO: The Ultimate Guide for a Landlord or Investor

What is HMO investment property?

 An HMO stands for House in Multiple Occupation and property is classed as one if you have at least three tenants living in the same house – forming more than one household and the tenants shared a toilet, bathroom or kitchen facility.

Are HMO properties a good investment?

As with every type of property, HMO comes with its own set of pros and cons. We think that HMOs are a great investment and if you use a letting agent like ourselves, you’ll do all the hard work whilst you enjoy the rewards.

| Amana Lettings | Property Management Crewe | HMO Lettings Crewe

What are the benefits of a HMO?

  • HMOs are quite popular with younger people, students and professionals working away from home.
  • You will only have to worry about finding a tenant for a room instead of the whole house. Therefore if you have an empty room, you will still receive a rental income from your other occupied tenants.
  • There is a strong demand for HMO properties and can be easier to occupy
  • City center based properties which is more attractive to potential tenants
  • HMOs are generally more profitable than standard buy to let properties. 

 

Does my property need an HMO license?

An HMO must have a license if five or more tenants occupy it. The average cost of an HMO license in the UK is around £600 however it varies between authorities, it some cases it can be as low as £60 to £1,000.  

Some councils may require some other types of HMOs to have a license, it’s best to check the requirements of your council to see what they need.

 

HMO Compliance:

As well as having a licensing, HMO landlords must also:

  • Ensure fire safety measures are in place including working smoke alarms on each floor
  • Carbon monoxide detectors installed in any rooms where there is a solid fuel appliance
  • Annual gas safety check
  • Hold an Electrical Installation Condition Report which is renewed every 5 years
  • Complete Right to Rent immigration checks on every adult living in their HMO
  • Ensure that the property is not overcrowded
  • Ensure that there is enough kitchen space and bathroom facilities for the number of tenants who will be living at the property
  • Provide enough rubbish – preferably recycling, general waste and food waste
  • Ensure communal areas are clean and in good repair
  • Complete any maintenance that need completing on the property and maintain the structure and exterior of the property, water systems, gas pipes, electrics and sanitary ware. 

 

Room Sizes:

 Any room in an HMO must meet the following requirements:

If there is one person aged over 10, the room can’t be any less than 6.51 square meters

If there are two people aged over 10, the room can’t be any less than 10.22 square meters

If there is one person under the age of 10, the room can’t be less than 4.64 square meters

Bathrooms:

Health and Safety guidance for HMOs states that landlords should provide one bathroom for every 4 tenants who live in the property.

However, many rooms come with their own en-suites but either way, landlords should always ensure those living in their HMOs have useable adequate bathing facilities. 

 

Decorate your HMO with some personality!

 Repeating what our incredible Lettings Manager had to say: “Make sure your property is at a standard you would want to live in. The standard of your property will reflect in the standard of your tenants. I know investors are always told “don’t furnish it with emotion” but it’s 2022, and people are looking for their next level HMO, they don’t want “basic” they want stuff they can photograph and put on Instagram.

 A great way our landlords and investors do this is by wall quotes and quirky designs on the walls.”