When the conditions are right, a house with more than one family living in it can be a very profitable investment. But if you want to make a lot of money, you must choose your HMO property carefully.
In this blog, we’ll talk about how to choose your next HMO property and what tools can help you choose the best ones.
When choosing your next HMO management in London, you need to think about three important things: the area, the type of property, and whether or not it will make money.
How to choose the best neighbourhood for an HMO?
HMOs often attract tenants with lower incomes and younger people. Things like easy access to public transport and being close enough to amenities to walk to are often important to them. Most people who live in HMOs don’t have school-aged kids, so school catchment areas aren’t usually a big deal. Students may live in HMOs, though, so being close to school may be important.
Is there a need for more rooms in HMOs?
If there are already HMOs in the area, it may be a sign that more are needed. But also look at the current levels of supply and demand. Even if they don’t rent out this kind of place themselves, local letting agents can often tell you how popular it is. Local sites for classified ads and room share or flat share can be used to find out what kinds of HMO rooms are already available and how much they cost.
How do HMOs fit into the local planning scheme?
Some local governments have Article 4 directions, which say that you need a planning permit to build a new HMO in part or all of their area. If so, they will usually say what criteria they will use to decide whether or not to allow planning.
What kinds of HMO licenses are needed?
Most HMO properties need a license, but it depends on how big, what kind, and where your HMO is. Some areas have extra licensing requirements or even selective licensing requirements, which mean that all rental properties must be licensed. There are both national rules that apply to all HMO licensing programmes and local rules that each local council applies to their own HMO licensing programmes.
How to choose the best house for an HMO?
Not every house can be turned into an HMO. Check to see if the space and layout will work for a shared room. Think about how you can best use the space to get the most out of it. For example, you might get the most money back if you buy a three-bedroom house with two living rooms and turn it into a house with four bedrooms and a shared living room.
Are the rooms big enough?
Local licensing rules set the minimum size of rooms that can be used as bedrooms. Check to see if the property you want to buy will meet the rules. Keep in mind that properties that are bigger than the minimum size and have rooms that are better located or better equipped may be easier to rent out and bring in more rent.
Is there enough space for people to meet?
Local licensing rules say how many bathrooms, toilets, kitchens, and other shared spaces your HMO needs based on how many people live there. Again, keep in mind that properties with nicer common areas or amenities like bathrooms in the suite may be easier to rent out and bring in more rent.
Is the house good enough to turn into an HMO?
As required by the HMO license conditions, think about things like independent access to the rental rooms, enough natural light, and a way out in case of fire.
Property managers of HMO management companies can help you find a good home by location, size, and price range. It can also tell you how much local properties cost and even show you which ones have been reduced recently, so you can find the best deal.