A Landlords Guide to Houses in Multiple Occupation

Before investing in a House in Multiple Occupation (HMO) property, there are lots to consider. This guide will highlight the key issues to help you prepare to take that step.

What is an HMO?

Your property is an HMO (House in Multiple Occupation) if rented out by at least three people who are not from one ‘household’, such as a family, but share facilities like a bathroom and kitchen.

A large HMO is defined as a property that:
· Is rented to five or more people who form more than one household
· Requires some or all tenants to share toilet, bathroom, or kitchen facilities
· Has at least one tenant paying rent (or their employer pays it for them)

Large HMOs must have a licence if located in England or Wales. However, smaller properties rented to fewer people may still need a licence, and you need to check with your local council.

What responsibilities does an HMO landlord have?

In our blog, we have previously provided A beginners guide for HMO landlords, which provides details of the requirements placed on landlords. These are important because the responsibilities are broad in what they cover and specific in terms of what they require.

One example is that suitable bedroom sizes for HMOs are stipulated, so if you are thinking about applying for a licence, you need bedroom sizes that are at least:

· 6.51 square metres for a person aged 10 or over
· 10.22 square metres for two people aged 10 or over
· 4.64 square metres for a child under 10 years old

Again, this can vary between councils, and you need to understand the requirements in the council authority area.
You must also be aware that the local authority needs to be informed if:

· You plan to make changes to an HMO
· Your tenants make changes
· Your tenants’ circumstances change (for example, they have a child)

These specific demands on HMO landlords are in addition to the more apparent responsibilities like complying with HMO legal requirements, ensuring safety checks, providing furnishings, fixtures and fittings, maintaining communal areas and not allowing overcrowding.

The requirements placed on HMO landlords are comprehensive, so anyone considering investing in a House in multiple occupation property must be clear about them first.

What else do HMO landlords need to know?

Besides understanding their responsibilities, HMO landlords must be aware of their implications. No matter what property you rent, there will be challenges to address. But as an HMO landlord, you may need to consider the following:

• It can be harder to find financing for these types of rentals
• You need to find the right property to convert to an HMO
• Set-up costs can be higher
• Managing multiple tenants can be more challenging
• Tenant turnover may be higher
• Running costs may be higher
• Collecting rent from several individuals will likely present more work
• Maintenance costs can be higher

Making HMO management easier

Despite the potential challenges for an HMO landlord, the potential income is a big attraction. With the right support, the time needed to manage an HMO successfully can be substantially reduced.

The range of services, including pre-, mid- and end-of-tenancy services, offered by No Letting Go means landlords can make navigating the challenges of being an HMO landlord easier, ensure legal obligations are met, the investment is being protected and that tenants are content.

No Letting Go

If you would like to find out more about how the No Letting Go team can cut down on time needed to manage HMO and multiple properties, streamline cost and reduce workload, contact No Letting Go today.