A home in multiple occupancies (HMO) is a property rented to at least three people who are not from the same “household” (for example, a family) but share services such as the toilet and kitchen. It’s also known as a “home share.”
What Are The Main Benefits Of Investing In HMO Properties?
Investing in HMO Properties has advantages and disadvantages that investors must evaluate, just like any other form of property investment. However, if done right, there are some constant benefits to HMO investment:
- HMO houses can give better rental returns than traditional buy-to-let properties, often up to 4 times higher.
- People are looking for low-cost renting rooms, thus demand for shared living accommodations is high, especially in the face of economic upheaval and uncertainties.
- When one renter decides to go, you still have other tenants paying rent while you look for a replacement for the vacant room.
HMO houses, on the other hand, may be complicated and are subject to more stringent regulations than standard buy-to-let properties.
If, on the other hand, you want to rent out huge HMO properties in the United Kingdom, you must obtain a license.
- It is rented to a group of 5 or more people who represent more than one home, and some or all tenants share the same toilet, bathroom, or kitchen facilities.
- At least one resident pays rent (or their employer pays it for them)
- Depending on the location, you may require a license even if your property is tiny and only rented to one or two people.
- A license is valid for a maximum of five years.
- Your license must be renewed before it expires.
- For each HMO unit you own, you must get a separate license.
- You must guarantee that the property is appropriate for the amount of people (this is always dependent on its dimensions and amenities). The residence’s ownership (you or a real estate agency) is deemed apt and appropriate,’ for example, they have no criminal histories or violations of landlord laws and regulations or the code of application.
- You must also configure the fire sensor, as well as give the authorities an updated gas assurance certificate every year.
- Provide security certifications for all electrical equipment as required.
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Room Dimensions In HMOs
Additional requirements on minimum room dimensions were introduced in the updated HMO Property Requirements for 2019.
Since October 1, 2018, each room in an HMO property that is used as a sleeping space must be:
- It must be at least 6.51 square metres if the individual sleeping in it is over the age of ten.
- If two persons above the age of ten share a room, it must be at least 10.22 square meters in size.
- For one person under the age of 10, a minimum of 4.64 square metres is required.
- Any room with a floor area of less than 4.64 square meters is not permitted to be used as a sleeping area.
What Is The Ideal Amount Of Bathrooms For An HMO Building?
In an HMO, landlords should provide one bathroom for every four renters. Suites are common in HMO rooms, and HMO property owners should always guarantee that residents have access to functioning, appropriate bathing facilities.
HMO mortgages vary from regular buy-to-let mortgages in that they allow several rooms to be rented to multiple people, which is not possible with standard buy-to-let mortgages.
Depending on the stage of the HMO property, there are a variety of HMO mortgages available, including:
- Loans for the construction of new structures and for the expansion of existing structures
- Renovation financing
- New and existing HMO properties are eligible for mortgages and refinancing.
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