5 Crucial things to look for in HMOs—Strategy Explained!


5 Crucial things to look for in HMOs—Strategy Explained!

What is an HMO property, and should you buy one?

An HMO is a house in multiple occupancies. It’s when you rent out a property room by room instead of just renting it out to a family.

I want to talk about HMOs in this blog because it is one of the first properties I invested in and am still getting financial profits through HMOs.

HMO gets you more benefits than a single house with a single tenant because you rent out each house and get multiple rents, i.e., more financial benefits.

So, what are the strategies for HMOs? Let’s find out!



1.       Rents out by the room

You need to look for a property that you can rent out by the room. Now, if you find a property that has one bedroom and a bathroom and kitchen, you may not be able to rent it out as an HMO to multiple occupants. However, you don’t necessarily need a BIG property with a BIG garden either! You just have to have the eye for creating the space for multiple occupants.

For example, if you find a property with two bedrooms and two receptions, and those receptions have separate doors and windows of their own, you can potentially turn those receptions into bedrooms by just putting beds in it! So now you have four rooms that you can rent out to four occupants.


You also need to make sure that the rooms are at least 100 sq. Ft. unless there’s a communal area, in which the rooms need to be 70 sq. ft.

You won’t need to have a license or planning permission unless you’re in an area where there is Article 4. This brings us to our next strategy.


2.       Check the rules in your area.

You need to check the rules and legality issues in the area you’re finding an HMO. If there are four rooms in an HMO, you won’t need a license. However, when you have five or more occupants in the HMO, you will need a permit. This is the general rule of thumb; however, you should check the legal requirements of the area as well. You can also check on Google about the HMO rules in your area.

If you have Article 4 in your area, you will need planning permission to change the use of a single-let property into an HMO. If there is no Article 4, you won’t need permission unless there are seven people or more in the HMO.



3.       Location, location, location!

This is a crucial tip for people looking for HMOs. You need to create an HMO in a population-centric area. You need to have people, houses, communities, shops, universities in the area to ensure that there is demand in the area for an HMO.

You can also check out the demand for an area by looking up spareroom.co.uk, where people who are looking for rooms advertise themselves. However, my advice is to search for a people-centric area where there are lots of city centers, universities, train stations, etc. when creating an HMO.


rent to rent

4.       Return on Investment

You need to get a good return on investment when creating an HMO. The crazy thing about HMOs is, in England and even in the UK, room prices are more or less the same—four-hundred to five-hundred pounds per room no matter the area. However, the cost of buying a property varies on the area and other factors related to it. Therefore, when you’re renting out an HMO, consider the ROI you will get from it.



5.       HMO Management

When you buy an HMO, make sure you have an HMO management company. Managing an HMO can be very difficult—you’re managing more tenants now. Moreover, the tenants are going to stay in the HMO for a few months. But the turn-around is higher.

So, get a good HMO management company. How do you get one? There are three ways:

  1.       Referrals
  2.       Google!
  3.       Spare Room

From Spare Room, find rooms available that are advertised by agencies. Phone the agency and ask them if they can manage your rooms too!


A Final Word

HMOs can get you high ROIs as you get multiple occupants in a single property. I hope you found these tips helpful! If you have, check out my YouTube Channel for more tips like these and guides on property investment.

Great News! The Crash Course is now online and you can access it for £1 as a Samuel365 member. Register Here: https://online.property-investors.co….



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