What is an HMO? House of Multiple occupancy – this is a house where each room is rented out on its own tenancy agreement. HMOs can be lucrative since the overall rent achieved is much higher than if the house was let on a normal tenancy agreement. Local authorities impose rules and regulations which stipulate how such properties must be managed, including building regulations that cover safety aspects such as fire alarm systems. HMOs for students have been very popular, however, there is a lot of competition from newly purpose built properties. That said, the new builds whilst funky and attractive are expensive, with rooms typically renting for up to £150/week. HMOs finished to a good standard and in popular locations will always continue to rent well especially when rents are competitive compared to the new builds. Good marketing always helps.
HMOs also provide a perfect option for young professionals starting out, who’s salaries may not cover the costs of renting even a one bedroom flat. Rents for rooms in an HMO typically include gas, water, electricity, council tax and broadband wi-fi access. There is a strong demand for rooms both from young professionals and also commuting professionals who typically work away from home during the week, travelling back at weekends. A room in a quality HMO works out more cost effective than staying in a hotel and provides somewhere that possession may be left securely when going home at weekends unlike hotels.