Houses in Multiple Occupation, or HMOs, can be a fantastic source of income for landlords.
They allow a landlord to receive a consistent return on their investment whilst also benefiting from the capital growth of the property. However, they also come with added responsibility as HMO landlords have a greater deal of compliance that they must adhere to.
If you are a new owner of an HMO or are considering adding an HMO to your property portfolio, here are 5 essential tips to help you.
1. Property type
Older properties such as Victorian or Georgian houses are much larger than modern new builds. They often have more communal spaces, bigger bedrooms, and gardens. The more rooms, the greater the HMO flexibility.
A word of warning however, when buying an older property, do ensure that the property is surveyed to check that there are no major problems. Have the boiler and gas appliances checked to ensure they are safe and make sure the rest of the property is in good working order.
2. Research the HMO location
Always research different areas to see which ones best suit your target tenants. We advise to focus your search on areas that are close to amenities such as shops, cafes and pubs as well as being within a 10-15-minute walk of a tube or train station. Many young professionals find the above factors most attractive when choosing a place to live.
3. Choose tenants carefully
Just as with any other rental property, HMO landlords should take care when taking on new tenants. In most cases, HMO tenants are young professionals looking for cost-effective accommodation in a convenient location. It’s important to carry out thorough referencing checks to ensure that the tenant can afford the room they are renting and that they have a good track record with a previous landlord’s reference too.
Make sure the entire property is rented to people with a similar lifestyle to enable them to gel together, and don’t forget you’re still legally responsible for carrying out a Right to Rent check with all occupants living there.
4. Hire a cleaner
Keeping a property clean and tidy is essential in keeping tenants content and ensuring that they have a good experience. It is also an HMO landlord’s responsibility to ensure that common areas are maintained to a certain standard. A cleaner can also be used to keep an eye on things and how well tenants are taking care of the property.
London Shared provides a complimentary weekly cleaner to all our homes for exactly this reason.
5. HMO licensing
Ensure to make this a priority as mandatory licencing is required for properties above a certain size. The local authority will carry out an inspection before granting (or refusing to grant) a licence and a fee will be payable too.
It is a criminal offence if a landlord does not have a licence for an HMO that should have one. It is also an offence to allow overcrowding or to breach a condition of the licence.
HMO management is a full-time job. If you want to reduce the stress and time spent looking after your property, finding and managing tenants, consider using a specialist property letting agent such as London Shared.
We rent properties from landlords and provide accommodation to corporate and professional tenants. Our service aims to maximise your property’s value and provides you with guaranteed income, a full management service, no fees and quality professional tenants.