Want to invest in a HMO? Here’s some tips from Belvoir Hull.
What is a HMO Investment Property?
A house in multiple occupation (HMO) is a property let to three or more unrelated people. HMOs include student houses, houses occupied by migrant workers, and houses and buildings have been converted to flats and do not comply with the 1991 building regulations although there are some exemptions.
Location
HMO’s are ideal for university students and the rooms can stay let for up to 3 years especially if its a first year student doing a 3 year course. This is great for you and your investment as long term lets means long term income. HMO properties are usually best within a short distance from the university get to know the area to ensure your investment property is located in the perfect location.
If you are planning to convert a building to an HMO, you may need planning permission.
If you need planning permission in Hull there is a charge of £50 for this service. You can pay the £50 charge by cash or cheque in person at Hull City Council’s planning reception were you can collect the planning application form, post a cheque with your completed form, or telephone 01482 300 300 to pay by credit card. Cheques should be made payable to ‘Hull City Council’.
Licensing
If you want to rent out a house in multiple occupancy, you may need to apply to for a property licence. New licensing laws came into effect on 6 April 2006, replacing the previous registration scheme.The Licensing is mandatory and applies to all properties which have three or more storeys, with five or more people, forming two or more households, where some or all amenities are shared. Individual flats containing three or more floors, with five or more people, forming two or more households sharing amenities will also be subject to licensing.Licensing has been introduced to ensure that properties of this description are managed properly and have adequate amenities and fire precautions. If you do not hold a valid licence, you risk having to pay back any rent collected for the unlicensed property and a fine of up to £20,000.
Why HMO’S Mean Money
1. Rental yields can be as much as three times higher
2. There are less rental voids meaning as one tenant moves out you still have other occupied rooms to keep some income flowing.
3. There is less exposure to areears with multiple tenats meaning if one tenant falls into difficulty you still have other paying tenants in the other rooms.
4. There can be tax advantages to investing in HMOS as more costs can be tax deductable.
5. Tenant demand for flexible, affordable housing is increasing. Population is increasing this combination is causing a increase for more HMOS.
Find a good agent
Once you are ready to move tenants in ensure you find a good agent to manage the property for you or just to find the tenants. Most agents do three different types of management. Tenant find only, Let Only or Full Management. Ask whats included in all three different types to decide which will work best for you.
GOOD LUCK & HAPPY INVESTMENT!
If you are an investor and would like a second opinion on a property you have seen, you can send the URL of the property to us via email hull@belvoir.co.uk. Alternately you can call our office on 01482 322300 or pop into our office and have a chat, the kettle is always on and we will even pull out the biscuits!
Don’t forget to visit the links below to view our back dated deals and Hull Property News:
Belvoir Hull Website: www.belvoir.co.uk/letting-agents-hull
Belvoir Hull Facebook: www.facebook.com/belvoirhull
