An HMO, also known as house shares, is a house of multiple occupation where a property is rented out to 2 or 3 people of separate households and share common facilities like living area, kitchen and bathroom. This concept of HMO is popular among landlords in England and Wales. Through HMOs, landlords can earn more as they are charging more tenants for same property which means higher yields. This type of tenancy has potential to earn more and generate but at the same time it demands more responsibility and management.
There is a concept of large HMO as well where a property is let to 5 or more people from 2 or more households and sharing same common facilities of living area, kitchen and bathroom. However, large HMO should have license in England and Wales.
Here is everything you need to know about managing HMO property-
The foremost task of every property manager or landlord is to find the right tenants. It includes marketing and advertising your HMO on various online and offline platforms. Like any other normal rental property, list your HMO with all details regarding location, facilities, images of HMO, etc. to get more leads. opt for advertising near any school or college by distributing or displaying posters. You can also take professional services of agents; they work aggressively on your behalf and secure leads. Make sure that everything is good and in working order before you start advertising for tenants for your HMO.
Furnishing a rental property always increase chances of getting a good rent which leads to increase in your rental income. Thats because tenants want comfortable and convenient place to live in where they are given all facilities and furniture. This makes them happy to extra rent as well. Make sure that you provide a furnished HMO to the tenants. Providing furnishing solution for HMO properties can be done by opting for HMO furniture packages or you can do yourself according to your budget. Furnishing a rental property includes providing beds, mattresses, wardrobe, drawers and curtains in the bedroom. Sofa, TV, storage unit in living room. Make sure to pay attention to the main rooms of any home i.e., bathroom and kitchen. Provide all necessary electrical appliances such as fridge, microwave, oven, washing machine in kitchen and storage space, well fitted seat, etc in bathroom. Every detail count so makes sure that you have enough furniture according to the tenants you are keeping.
There are some legal requirements which are to be followed by the landlord of an HMO. It includes:
Display all necessary details of the property mentioning name, address and contact details of the property manager in the form of a notice in communal area
Keep records of all inspections done
Comply all safety standards,
Ensure annual gas safety checks are undertaken timely
Make sure that the property is well maintained
Supply clean water and maintain proper drainage
Follow refuse and fire-safety guidelines
Keeping all electrical appliances in working condition
Comply with HMO minimum room size regulations
Installing fire alarm system
Install and maintain smoke alarms
Supplying fire extinguishers and fire blankets in the home
Some HMOs require a license to make sure that it is managed accurately. You must check with the local council about the mandate of having a license. If your property is in England or Wales has 5 or more than 5 occupants from 2 or more households, then you need an HMO license. A council can also include some other types of HMOs as well for licensing. Therefore, it is always better to check with the council first and avoid any unwanted penalties. The council will carry out an inspection of the property manager and the property before granting a license.
Setting up an HMO is not an easy task; you need to comply with n number of requirements before letting your home to the tenants. One of it is ensuring and enhancing safety requirements in the HMO. As a property manager or landlord, you need to make sure that it meets fire safety requirements. The most important task of a property manager is to prevent fire and minimize the risk of fire. This can be done by ensuring that all electrical equipments are in good working condition, all electric circuits are checked, all gas installations are serviced and checked, there are enough fire extinguishers and fire doors in the home. All escape routes are clear to all the tenants, fire alarms are installed in communal area on each floor. Emergency exits are clearly mentioned and emergency lights are available on each floor.
With higher number of tents from different household, it is common for disputes or problems arise in an HMO. An HMO is expected to have such issues as a greater number of tenants are using the same facilities and living in the same place. You should be prepared to resolve everyday management issues. It could be due to different mindsets, behavior or wear and tear of furniture. Encourage tenants to resolve on their own, but id required, step in and resolve the issue.