If you are looking for an investment that will give you a high rental return, then you may want to consider HMO’s.
An HMO (house in multiple occupations) is a property rented to three or more tenants who aren’t part of the same household that share amenities.
One of the key advantages of investing in an HMO is that it will generate a rental income increase of three to five times a standard buy-to-let home.
The other good news is that HMOs provide more people with affordable accommodation, which is important to help ease the London housing crisis.
If you are considering investing in an HMO, here’s what you need to know.
Step 1: The Right Property
The first step is to invest in an HMO that has been converted and is returning solid rental returns or find a property to convert into an HMO.
If you want to convert a property, we recommend getting advice from a professional real estate agent specialising in HMO conversions. They will be able to give you guidance on which properties can be converted or not.
They can also advise you on the planning, licensing, and health & safety requirements so that you can get your HMO licence.
Step 2: Location, location, location
Before you consider investing in an HMO property, you need to ensure it is in the right location.
HMOs that are in a busy student area or close to good transport connections are ideal HMO properties.
Step 3: HMO Licensing
A critical legal aspect of letting an HMO is getting the relevant licence to ensure that the property is safe for tenants to live in.
To check if your property needs to be licenced, you can contact your local Council.
Or speak to us about our HMO Licensing service, which includes applying for the local Council’s property licensing scheme on your behalf.
Step 4: Converting to an HMO
You may need to adjust the property to make it suitable for three or more tenants to rent.
The key areas to focus on in the conversion is providing sufficient space, a good layout, the right facilities, good furniture, and reliable appliances.
A three-bedroom house can be converted into six units with the following conversions:
- Add a loft unit on the second (or third) floor
- Extend the rear of the property to add a unit (if the backyard is large enough)
- Convert existing living areas into separate units
- Install ensuites and kitchenettes in all units
- Convert the current kitchen to a communal kitchen and laundry
- Convert the garage (if there is one) into an additional living space
Whatever works are needed, we recommend engaging a professional. Remember, you may also need planning permission for the renovations.
As landlords and property investors ourselves, we combine our love of property, design innovation and technical excellence with helping our clients convert existing single dwelling houses into HMOs.
We bring together our trusted team, which includes…
- Heating engineer
- Project Manager/Builder
- Scaffolding team
- Roofing experts
… to convert single dwelling properties into innovative, affordable, and quality HMOs.
Step 5: Minimum Room Size Requirements
Your HMO property will need to comply with the following minimum HMO room sizes:
- No room less than 4.64 square metres can be used as sleeping accommodation. This size can only be used by one person aged under ten years
- A room size of 6.51 square metres minimum can only be used by one person aged over ten years
- A room size of 10.22 square metres minimum can only be used by two persons aged over ten years
Depending on your local Council, there may be other criteria to meet.
Step 6: Safety Compliance
There are various 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
- getting safety certificates for electrical appliances
- keeping exits clear from obstructions and marking fire exits clearly
- providing emergency lighting for fire safety
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)
If you want an investment that will give you a high rental return, then talk to us about HMOs on +44 (0) 203 286 6468 or email us at HMO@RekaProperty.co.uk.