HMO is a property that is rented by three or more tenants who are not part of the same household that is a house in multiple occupations. Considering the HMOs as the more efficient way to run a rental portfolio, many landlords let HMOs. The opportunity to collect rent from a higher number of tenants and a potential higher rental yield is appealing, although there may be more work to do.
Read the blog till the end to know about “How to convert a property into an HMO”.
Also for HMOs, there are certain properties that are tailor-made. A busy student area with large extendable properties is a perfect instance. HMOs are sometimes preferred due to potentially lower rent payments and the opportunity to live with more people when it comes to tenants. Well, there are several things you will need to do if you are considering converting a property into an HMO from meeting legal requirements to making property habitable for people. Let’s start!
HMO Licensing
Getting the relevant license in place is one of the most important legal aspects of letting an HMO. The rules surrounding HMO Licensing were expected to affect up to 177000 additional properties at the same time and were updated in October 2018.
It’s highly likely you’ll need some sort of license if you are letting an HMO. Your property will be considered as a large HMO and will need a license if your property is rented by five or more tenants that too from more than one household. And at least one tenant pays rent and some or all of the tenants are sharing toilet, bathroom, or kitchen facilities.
You may still need a license if not all but some of the criteria apply and it’s wise to check with your local authority. You will require a separate license for each HMO you are running and HMO licenses are valid for five years at a time. Hence HMO Licensing is the first and foremost step to start with.
HMO Property
HMO Fire Safety and Smoke alarms
There are various other compliance measures you’ll need to meet along with applying for the license. These are installing the relevant smoke alarms and carbon monoxide detectors and having safety certificates for electrical appliances available on request and sending a valid gas safety certificate to your local authority each year.
HMO Room Sizes Requirements
Guidelines for minimum HMO room sizes were also introduced at the same time as the licensing challenges with landlords needing to adhere to the following guidelines.
- If there is any room in the HMO with a floor area of less than 4.64 square meters there is an obligation to notify the local housing authority.
- In the HMO, ensure that the area of any room used as sleeping accommodation by one person aged over 10 years is not less than 6.51 square meters.
- Ensure that in HMO the floor area of any room is not less than 10.22 meters which are used as sleeping accommodation by two persons aged over 10 years.
- Ensure that in HMO the floor area of any room is not less than 4.64 square meters that are used as sleeping accommodation by one person aged under 10 years.
- Ensure that in HMO any room must not be used as a sleeping accommodation having a floor area of less than 4.64 square meters.
HMO Management
The work involved in managing an HMO is considerably higher than managing a single let as you will know if you own one. As there will be usually more tenants since you are managing more than one tenancy agreement. Due to the fact that tenants are more likely to move on, the knowledge to find and vet tenants is more specialized.
Final Words
Well, this was the pointing answer to “How to convert a property into HMO”. Well after clearing the fact, the pointer rests on how to do HMO Management. Well for HMO management, New Age Lettings can help you better in not only managing the HMO but helps in maximizing profits, having access to a larger database of clients, and contracting directly with tenants.
Experience hassle-free HMO management by approaching New Age Lettings now!