If you are a landlord or property investor looking for ways to maximise your return on investment and generate a higher level of income from your current properties, then this blog is for you.
In this blog, we will outline an effective way that a number of landlords and property investors use to boost your rental income by turning your property into an HMO.
We also have some pictures of our HMOs which we have renovated and currently manage.
What Is An HMO?
HMO stands for “House in Multiple Occupation”, and essentially means that at least 3 tenants live in the property, forming more than 1 household, and they share a toilet, bathroom and/or kitchen facilities with other tenants.
There is also a specific classification for a large HMO which involves more than 5 tenants, forming more than 1 household.
Why Can It Boost Your Rental Income?
An HMO can boost your rental income, as you are likely to generate a greater total income from the property, than if you were to rent it as a single household property.
For example, if a reasonable rental rate for your property is £695 per month, you may be able to split your property into an HMO and generate 3 incomes of £395 per month, which gives an additional £490 per month from the same property.
In addition, you may be able to secure contracts with the local council, housing providers or even charities for housing within your HMO, which secures rental income for a set period of time. This means that you are guaranteed the income, irrespective of whether or not the property is fully occupied.
What Do You Need To Consider?
If you rent an HMO, there are additional obligations and legal requirements that you must fulfil such as, but not limited to:
- Specific licensing for HMO properties
- Minimum bedroom sizes
- Responsibility for the repairs to the communal areas of the property
- Higher safety standards as HMOs are considered to have a higher risk of fire than single let properties
- Sufficient cooking and bathroom facilities for the number of tenants
There may also be additional licensing that applies to your property if you are converting it from a standard rental property to an HMO, but this will depend on the specific council that your property is located within.
Above are a couple of photographs of another HMO in Hartlepool which we have renovated and currently manage.
Potential Penalties For HMO Landlords
If you fail to meet the obligations, and legal requirements for your HMO set by the relevant Council, you may be liable for a number of punishments such as, but not limited to:
- You can be fined
- You can be ordered to repay up to 12 months’ worth of rent to tenants
- Any housing benefit or universal credit received through tenants can be reclaimed by the council
- You may be unable to evict a tenant using a section 21 notice if the HMO isn’t licensed correctly
Can I Convert My Current Property Into An HMO?
Yes, you most likely can!
Whilst this is dependent on your property, and obtaining the relevant planning permission, it is likely that you can create an HMO from your current property.
One of our property specialists; Jo Miller, has a wealth of experience and expertise in managing property renovations and can give you some advice on where to start with transforming your properties into HMOs.
To reach Jo, you can email her at email@example.com or call 01429 36 36 36.
How We Love Renters Can Help You
At We Love Renters, we manage a number of HMOs for our landlords, and this has proven to be a very effective way to maximise profits and enable them to generate the reliable passive income that they dreamed of when they first started investing.
We can match you with the BEST TENANTS (from our waiting list of over 300), so your properties generate great returns and are occupied for the long term, with people who look after their homes.
As well as making your income more reliable, by finding amazing tenants your profits aren’t wrecked by huge repair bills from nightmare tenants who trash your property, and you don’t have to deal with the hassle and stress that comes with it.
If you want to find out more about how We Love Renters can help you, complete the quick and easy form on our website by clicking HERE.
Also, we will send you a copy of our free report entitled: “7 Ways To Ensure Maximum ROI From Your Rental Property”.
Alternatively, reach out to one of our property specialists by telephone on 01429 36 36 36.
To read more of our “Top Tips for Landlords” blog articles, click HERE
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