Don't Buy an HMO

Posted on Tuesday, August 31, 2021

Until you've read this! 

Buying an HMO can seem extremely daunting at first especially if you are new to the property industry. Luckily HouseShaw’s team have a lot of experience and we are here to help you get started! This list will illustrate the top 10 most important things you need to know about HMOs. 

A 1. Location: When it comes to HMOs it’s location, location, location! The most important thing when it comes to location is convenience. If your HMO is in the middle of a field with nothing nearby, you’re unlikely to get much interest. But if your HMO is in the centre of town with shops and travel hubs nearby you’ll have people clambering to stay there! So make sure you take this into account before buying! 

 2. Compliance: There are a few things your property MUST have in order to meet HMO compliance regulations; Firstly, all interior doors must be at least 30-minute fire doors. Secondly there are a few documents you will need: an EICR (Electrical Installation Condition Report), a gas safety certificate, EPC. Finally, you will need to know which type of properties require the different times of smoke/fire detection. If you are unsure on this, give us a call and we can help you out. 

 3. Licensing and Planning: In order to run an HMO you will first need to apply for an HMO license, if you need any help with this feel free to get in touch to find out how we can help you apply. You might also need to get planning permission if the number of rooms you wish to rent out exceeds 6. For more in depth information on this book on to our HMO webinar. 

 4. Market: When investing in a property it is always a good idea to find out a bit about the local property market. One good way to do this is to have a look on some property websites such as Zoopla or OnTheMarket and have a look and how many properties there are available and what sort of price they are going for. Another great way to find out about the current market is to call a local lettings agent (if you’re in Bucks, that’s us! 01494 715619) and ask them for their opinion.

 5. Furnishing: HMOs can come furnished or unfurnished but, in our experience, unfurnished HMOs tend to be a lot less popular. So, we would recommend at least supplying the basics, such as beds and storage for the rooms, white goods for the kitchen, and a sofa for the communal space (if there is one).

 6. Rent and Bills: Rent in an HMO works slightly differently to a single let because instead of one person renting a whole house with one contract. In an HMO each tenant pays rent specifically for the room that they inhabit. Bills can be split amongst the housemates however we have found that offering bills inclusive rent yields better results.

 7. Internet: You might be surprised at how important this point is. But, in this modern age of technology the reliability and speed of the internet in a house can often be one of the biggest selling points to a prospective tenant. So, installing fast reliable WiFi should be a high priority.

 8. Contract: With any rental property, the contract is very important! An HMO is no different. However, with an HMO there are a few options to consider. The most common contract is a standard AST for each room, which makes the tenant responsible that individual room. The other option is a group AST which is a single contract that all the tenants sign. This makes Tenants are jointly liable for both the rent and the care of the property; responsibilities are shared between tenants. These are most common in a student house, or a property comprised of people who know each other. 

 9. Cleaner: Although having a cleaner is not essential, it is a very good idea because they can ensure that the communal areas are kept clean and in good condition. This helps keep the HMO in good condition for you and looks good for any viewings on the property. 

 10. HouseShaw! Here at HouseShaw we are experts on all things HMO! We can guide you though the entire process, from sourcing the right property all the way through to filling the rooms. We can even fully manage the property for you so all you have to do is sit back and watch the rent come in! So, if you’re looking to invest in an HMO give us a call today! 

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