Students digs, house shares, rent a room. There are several informal descriptions for Houses in Multiple Occupation (HMO). The proper definition of an HMO is“a property which is let to 3 or more tenants who form 2 or more households.” The two HMO property classifications are ‘small’ or ‘large’, depending on the size of the property and the number of tenants.
If you’re a landlord looking to invest in an HMO, you’re probably moving into the sector because of the rental yields. Returns attached to HMOs have overshadowed those on an average single-occupancy buy-to-let for a few years and with decreasing mortgage interest relief, we can’t blame landlords for looking at alternative ways to improve their portfolios. But there is a sting in the tail, as existing HMO landlords are only too quick to tell.
HMO letting is not for the faint-hearted or time-pressed, and landlords will have to work hard to achieve the lauded yields.“Many of our HMO landlords come to us after trying to self-manage,” comments Priya Patel, Head of London Residential’s property management team.“They quickly discover managing an HMO is practically a full-time job, leaving them little to no time to enjoy life or grow their investment portfolio. It’s an almost constant distraction for those whom property investment isn’t their career, especially if you have warring tenants and increased maintenance to deal with.”
Having an HMO rental doesn’t have to be hard work, however. You can hand over all the management and still reap the rewards quite easily. North West London estate agents London Residential has perfected the art of HMO management and we’re ready to help new HMO landlords get off to a speedy and stress-free start. We’re also happy to step in and take over management where existing landlords have concerns.
“HMO property rental yields are still brilliant and this gives investors the capacity to bring in the professionals without denting margins too much,” adds Priya. “To be fair, there aren’t many landlords who want to be involved first-hand in complex lets and having professional management in place can actually save a landlord money as, by being hands-on and professionally involved, they’ll spot small issues before they become major problems and limit rental arrears.”
London Residential’s property managers will ensure all the HMO regulations are met, that any licensing needed is in place, that property inspections are conducted and that all relevant paperwork is dealt with. Plus, we’ll deal will all tenant aspects, including finding tenants, referencing, holding deposits, verifying rental guarantors, collecting rent and mediating between occupants - yes, squabbles do sometimes arise. “It’s a weight off the landlord’s mind and frees their time to pursue other projects or just relax”, concludes Priya. “You could say all the rewards without any of the work when you appoint London Residential as your HMO letting agent.”
Of course, not every HMO letting is forever and for whatever reason you might wish to sell, London Residential’s sales team is ready to step in and help. We will ensure all HMO requirements are adhered to, provide an expert valuation based on current market conditions and help find a suitable buyer.