People who work in real estate have shown more interest in houses in multiple occupations (HMOs). HMO attracts real estate people due to its high-income potential. HMO property landlords get higher rents than other landlords of other properties. There are high demands and rules for the HMO landlord.
Although, if you manage them adequately, you can take advantage of its benefits as well. Generally, HMO landlords have a remarkable experience in single-let properties. If you are new to this field, below are the property management tips you should know about.
- HMO License
A specific license is required to become an HMO landlord. And if you have a license then you have to get it renewed. There will be two circumstances under which you have to get a new license or get it renewed.
1. If you have more than three stories and have more than five tenants from two or more households.
2. If your local council thinks that the HMO landlord of your region is not managing the property adequately, then he will give you an additional license.
These licenses are valid for five years. There is a requirement for a license for every HMO property you own or operate. The license fees vary depending on the place you live. You can take assistance from the local council for the same. If you already own a license, make sure it is up to date. If it is not, renew it right away.
B. Different HMO Properties
While looking for different HMO properties, you need to understand different types of HMO properties. Below are the most common HMOs you should know about
a. Flats or houses shared by two or multiple people from two different households.
b. A house where you are the landlord and have more than two tenants from the same household.
c. Student housing (Here each student has a separate household).
A property is considered an HMO if it is shared by at least three people. It should be the primary residence of all the tenants and they must pay guaranteed rent to the landlord on monthly basis. Mostly, these households share a kitchen, toilets, bathroom, lobby, etc. but are not related to each other.
- Tenancy Agreement
A written contract agreement is the most important thing for every rental property. Before renting out the property, create a well-written tenancy agreement stating all the rules and regulations. It makes sure that you and the tenant know each other’s responsibilities and expectations.
Having a contract can solve various problems. If you have any dispute over a matter, the contract can solve it easily. It also eases the moving out process if the tenant wants to move out from the property. The contract must include monthly rent, roles and responsibilities, expectations from the tenant to live with others, and details to end the tenancy.
You should take special care of maintenance. There are other preventive measures you need to take care of when it comes to maintaining your properties. If you keep the property in good condition then the tenant will stay for a longer period which means you will get more income and a better reputation in the market. Make sure you have a proper record of all your checks related to maintenance. Make a habit of inspecting the property regularly.
- HMO Mortgage
It is a type of mortgage that is provided specifically for HMOs. It helps in renting out the property with multiple tenancies. Have a look at the different types of HMO mortgages:
a. Development mortgages: They are provided for major building or construction projects.
b. Refurbishment loans: These mortgages are intended for refurbishment projects.
c. Mortgages and remortgages: These loans are provided if you are buying an existing HMO.
By understanding the above-mentioned tips, you can easily crack the deal of HMO’s related properties. If you have the required skill, and time management, and understand the responsibilities as well as the related knowledge to HMOs, you can easily generate a steady income in less time. House manage is the best property management company in London helping millions of people and solving their queries related to HMOs. Get in touch with us and one of our staff members will be happy to solve your problem.