HMO Conversion Essentials… What You Need to Know Before Converting
Whether you’re a new landlord looking to buy a property to convert or an experienced investor planning to convert a current investment property into an HMO, you need to be aware that conversions can be challenging, as well as rewarding.
Of course, the many benefits of converting an existing property to an HMO include:
- increased rental return
- multiple tenants leading to a reduced risk of vacancies
- tax advantages with a reduction in VAT
- potential increased property value
- creating affordable accommodation for tenants
…however, there are some essentials you need to know before you consider converting an existing property to an HMO.
Depending on the features of your property, converting it into an HMO can be a compelling investment with very profitable rental yields, but it does require more work and maintenance.
Essential 1: Is it the Right Property?
The first essential item to consider is whether the property you want to convert will be compliant, able to get an HMO licence and provide solid rental returns.
The types of properties that can be converted include a wide range of property types, such as:
- three-bedroom single occupancy residential homes
- former police stations
- former fire stations
- collection of shops
- former churches
- old factories
- former private hotels
The key is finding a property in the right location (close to busy student areas or close to good transport connections), has several rooms and communal areas, and the rooms comply with the minimum HMO room sizes.
Essential 2: HMO Licensing
The following essential item is ensuring that your HMO is compliant to receive the correct licence.
Contact your local Council to check if your property needs to be licenced and what requirements are involved. Or you can speak to us. We provide our clients with an HMO Licensing service, which includes applying for the local Council’s property licensing scheme on their behalf.
The HMO licence will need to ensure that the property:
- is safe for tenants to live in
- is in good condition
- has an adequate number of smoke detectors
- has appropriate fire exits
- has enough sinks, cookers, baths and toilets for the number of tenants
- is well managed
Essential 3: Compliance with Safety
There are various safety compliance measures you’ll need to meet to let an HMO. This includes:
- getting an annual gas safety certificate
- installing the required number of smoke alarms and carbon monoxide detectors
- installing fire doors
- getting safety certificates for electrical appliances
- keeping exits clear from obstructions and marking fire exits clearly
- providing emergency lighting for fire safety
- locks for each bedroom/flat
- emergency lighting
- keeping pest control treatment records
Essential 4: Hire a Professional Team to Renovate Your Property
You may need to renovate your property to make it suitable for three or more tenants from separate households to rent. The key is to provide enough space, a good layout, the proper facilities, good furniture, and reliable appliances.
To do this, you will need to hire a professional team to help you undertake the renovations. This includes:
- Architect
- Heating engineer
- Electrician
- Project Manager/Builder
- Painter/Decorator
- Scaffolding team
- Carpenters
- Bricklayers
- Roofing experts
Whatever renovation works are needed, remember that you may also need planning permission from your local Council.
Essential 5: Set a Realistic Budget
Before you start, do your research. Create a budget to plan for all your costs – renovations, safety inclusions, licence, etc, before you decide if converting to an HMO is the right for you.
For example, you will need to include the following costs into your conversion budget:
- Provisions for fire doors
- Planning permission submissions
- Compliance with fire regulations
- Property renovation costs
- Professional consultants’ costs, which includes the Architect, Engineers, Specialist Consultants, Quantity Surveyor
- HMO licensing fee
- HMO planning application fee
- Council tax application fee
- Furniture
- Insurance
- Solicitor fees
- Property management fees
- Lending costs
- Certification costs – which includes safety and energy certificates
Talk to HMO Conversion Specialists, HMO Letting Agents, and your local Council. Research what is involved and compare the additional investment needed against the additional profit you’re likely to make.
Our HMO Promise
As specialists in HMO conversions since 2006, we promise you:
1) On-time and on budget completion regardless of the size or condition of your property.
2) You’ll be kept up to date at all stages. Communication is our key to success.
3) There’ll be no surprises and no excuses. We deliver what we say we will.
4) Your HMO conversion will be compliant, and you will receive the HMO licence
5) Rental returns of three times your current monthly rent (some of our clients achieve up to five times increase)
Next Steps?
If you want to know if your single dwelling house can be converted to an HMO, call us on +44 (0) 203 286 6468 or email us at HMO@RekaProperty.co.uk.
Regards
Douglas Fokuo
Director
Whether you’re a new landlord looking to buy a property to convert or an experienced investor planning to convert a current investment property into an HMO, you need to be aware that conversions can be challenging, as well as rewarding.
Of course, the many benefits of converting an existing property to an HMO include:
- increased rental return
- multiple tenants leading to a reduced risk of vacancies
- tax advantages with a reduction in VAT
- potential increased property value
- creating affordable accommodation for tenants
…however, there are some essentials you need to know before you consider converting an existing property to an HMO.
Depending on the features of your property, converting it into an HMO can be a compelling investment with very profitable rental yields, but it does require more work and maintenance.
Essential 1: Is it the Right Property?
The first essential item to consider is whether the property you want to convert will be compliant, able to get an HMO licence and provide solid rental returns.
The types of properties that can be converted include a wide range of property types, such as:
- three-bedroom single occupancy residential homes
- former police stations
- former fire stations
- collection of shops
- former churches
- old factories
- former private hotels
The key is finding a property in the right location (close to busy student areas or close to good transport connections), has several rooms and communal areas, and the rooms comply with the minimum HMO room sizes.
Essential 2: HMO Licensing
The following essential item is ensuring that your HMO is compliant to receive the correct licence.
Contact your local Council to check if your property needs to be licenced and what requirements are involved. Or you can speak to us. We provide our clients with an HMO Licensing service, which includes applying for the local Council’s property licensing scheme on their behalf.
The HMO licence will need to ensure that the property:
- is safe for tenants to live in
- is in good condition
- has an adequate number of smoke detectors
- has appropriate fire exits
- has enough sinks, cookers, baths and toilets for the number of tenants
- is well managed
Essential 3: Compliance with Safety
There are various safety compliance measures you’ll need to meet to let an HMO. This includes:
- getting an annual gas safety certificate
- installing the required number of smoke alarms and carbon monoxide detectors
- installing fire doors
- getting safety certificates for electrical appliances
- keeping exits clear from obstructions and marking fire exits clearly
- providing emergency lighting for fire safety
- locks for each bedroom/flat
- emergency lighting
- keeping pest control treatment records
Essential 4: Hire a Professional Team to Renovate Your Property
You may need to renovate your property to make it suitable for three or more tenants from separate households to rent. The key is to provide enough space, a good layout, the proper facilities, good furniture, and reliable appliances.
To do this, you will need to hire a professional team to help you undertake the renovations. This includes:
- Architect
- Heating engineer
- Electrician
- Project Manager/Builder
- Painter/Decorator
- Scaffolding team
- Carpenters
- Bricklayers
- Roofing experts
Whatever renovation works are needed, remember that you may also need planning permission from your local Council.
Essential 5: Set a Realistic Budget
Before you start, do your research. Create a budget to plan for all your costs – renovations, safety inclusions, licence, etc, before you decide if converting to an HMO is the right for you.
For example, you will need to include the following costs into your conversion budget:
- Provisions for fire doors
- Planning permission submissions
- Compliance with fire regulations
- Property renovation costs
- Professional consultants’ costs, which includes the Architect, Engineers, Specialist Consultants, Quantity Surveyor
- HMO licensing fee
- HMO planning application fee
- Council tax application fee
- Furniture
- Insurance
- Solicitor fees
- Property management fees
- Lending costs
- Certification costs – which includes safety and energy certificates
Talk to HMO Conversion Specialists, HMO Letting Agents, and your local Council. Research what is involved and compare the additional investment needed against the additional profit you’re likely to make.
Our HMO Promise
As specialists in HMO conversions since 2006, we promise you:
1) On-time and on budget completion regardless of the size or condition of your property.
2) You’ll be kept up to date at all stages. Communication is our key to success.
3) There’ll be no surprises and no excuses. We deliver what we say we will.
4) Your HMO conversion will be compliant, and you will receive the HMO licence
5) Rental returns of three times your current monthly rent (some of our clients achieve up to five times increase)
Next Steps?
If you want to know if your single dwelling house can be converted to an HMO, call us on +44 (0) 203 286 6468 or email us at HMO@RekaProperty.co.uk.
Regards
Douglas Fokuo
Director