How to Convert a Property into an HMO

A house in multiple occupation (HMO) – is a property which is rented by three or more tenants who aren’t part of the same household. Many landlords let HMOs as they consider them a more efficient way to run a rental portfolio.

House-shares are usually popular among younger renters and students and, as more people rent for longer, HMOs continue to be a great investment opportunity for many landlords.

If you’re considering converting a property into an HMO, you will probably meet a number of steps that you’ll need to take; from meeting legal requirements to making the property comfortable for more people.

Before You Start Your HMO Property Conversion

Most HMOs require an HMO license. If you let your property to five or more tenants from more than one household, the house is at least three storeys high and the tenants share toilet, bathroom or kitchen facilities – then you’ll definitely need a license.

If any of these criteria apply, then you may probably need a license and it’s better to check with your local authority. You’ll require a separate license for each HMO you have, and the licenses will be valid for five years at a time.

In order to comply, you’ll need to make sure that a valid gas safety certificate is sent to the council each year, also make sure that smoke alarms are installed and safety certificates for electrical appliances are available on request. Different authorities may add additional criteria, so be ready there may be other requirements in order to comply.

You may also need HMO planning permission to be able to make certain changes, depending on how much work is needed to be done to the property to convert it. Carrying out all these sorts of activities, please make sure you keep a record of all correspondence, applications, and approvals to ensure you’re covered in the future.

The Practicality of Converting a Property to an HMO

Firstly, you’ll need to consider how many tenants you are going to have and how much space they’re going to require. Next step is choosing the level of furniture and appliances you’ll be providing.

During the conversion or HMO refurbishment period, all rental properties will be visited by the council, who’ll carry out a Housing Health and Safety Rating System risk assessment. Any unacceptable risks found during the assessment will be addressed. Taking it into consideration, make sure your HMO is habitable and provides enough space for tenants to live comfortably.

A good idea to convert the use of some spare rooms to additional bathrooms and reception rooms to additional bedrooms.

You may also need to move or construct walls in order to alter room sizes – these aspects need to planed carefully before undertaking. And another piece of advice is to use a professional when working on the more significant parts of the conversion.

Some landlords also convert garages in order to create additional space. These usually require planning permission, so you’ll need to check with your local authority.

Traditional Victorian terraced houses, due to their spaciousness and the size of the reception rooms, could be ideal for HMO conversion in many cases. For example, in a three-bedroom terraced house, a landlord could convert one reception room and the loft into bedrooms so it turns into a five-bedroom HMO.

Converting reception rooms is not always the right decision, even though it is usually essential. In the perfect scenario, the property will have two reception rooms – one of which you can convert, and leave another one to remain as a dining or living space. Sometimes tenants can be put off properties with no living room or living space, so it’s something you’ll need to consider carefully.

What Other Steps to Take?

You could encounter a higher turnover of tenants – this is the biggest difference between an HMO and a standard rental property. Consequently, better to put aside at least two months’ worth of rent each year to cover potential void periods.

Another important moment to remember is that, due to the nature of having more tenants, the property’s likely to come under more stress over the course of a tenancy. Bathrooms, kitchens, floors, and doors will all require more affords and so you need to make sure you’re ready to respond to all reasonable repair requests with speed and efficiency – as with any other tenancy.

Better to prepare the property fully before letting it, take no shortcuts and make sure you have enough money put aside to cover maintenance costs during and after the tenancy.

Converting a rental property to an HMO requires more work and upkeep but at the end of a day, it can be an effective investment. Therefore, before jumping straight into it, do some research, take your time and carefully get ready to become a successful HMO landlord.


Useful links:

The links below will help you in a process of HMO converting:

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