Houses in Multiple Occupation – an HMO is a property that is rented out by people who come from different households on an individual room-by-room basis. HMOs are often rented by individual tenants which then means that there is more profit to be made by landlords. 

We have made a shortlist of the key advantages and disadvantages of working with HMOs.

Advantage of HMOs over Buy to Let Properties

  • UK property combines low risk and strong return as the market is driven by a shortage of supply and an increasing population.
  • Fewer void periods as when one tenant leaves the other rooms are still tenanted.
  • Can get three times the income over a regular rented property.
  • Demand for HMOs is on the rise as the growing UK population means more people are looking for flexible and affordable housing in urban areas.
  • Less exposure to rent arrears.
  • If the property requires significant work to convert to an HMO, no planning permission is required if the building has fewer than seven bedrooms.
  • Can sell the property as a business not just as a house for higher than bricks and mortar value.

Disadvantages of HMOs

  • Not every area permits HMOs as Article 4 has restricted them in certain areas
  • More responsibility 
  • Fewer properties are suitable to be an HMO
  • All HMOs must be HMO compliant which has additional costs

As you can see, the common disadvantages of renting out HMOs are obstacles which can be overcome if you are experienced in the industry. Our founder, Kane Andrews, has been developing properties since 2011 so knows what is required for a successful HMO project. We take pride in being an ethical company who does everything by the book. There is no cutting of corners, it is a thorough process but very worthwhile. There are many common mistakes that can be made in an HMO journey but with experience we know how to avoid these and be prosperous in this industry.

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