HMO, Houses in Multiple Occupation - Still Money There (In Brum at Least!)
Whilst at the Birmingham Property Investors Show, I stayed with my young nephew in his multi let student house in Selly Oak.
What a fascinating area - it's pretty well all student HMOs here.
My nephew's place was not fully compliant in respect of the fact that though there were 6 of them living there, they did not have wash basins in each room.
However, it was decent enough accommodation - there were lots of other amenities - and for all I know Birmingham City may have adopted a softly softy attitude on when the wash basins must be put in - perhaps giving landlords time to make the changes (and for the government to change its mind on this rather daft aspect of licensing).
But wow, the yields here were good.
Good Yields on HMOs
I calculated his landlord would have been getting about 6.75% gross, though running costs on this kind of property will probably peg back net yields to 5%.
And student demand was very high. This was clear from the fact that most properties had notices on them to stop students calling to make enquiries about next year.
Downsides of Houses in Multiple Occupation
However, there are downsides to HMO lets for a landlord.
There is a lot of work checking people in and out and recruiting new tenants - especially if the tenants are all on separate tenancy agreements.
HMO properties also tend to get a lot of wear and tear -and it can be hard to get people to pay up for damage - as each tenant will blame the other. Expect to be asked to mediate a lot between warring tenants. This all takes a lot of your time up.
Often you have to pay the council tax and electricity and gas, especially if you are letting each room separately. And you may have to pay an HMO licensing fee if the property is big enough or if the local authority requires it.
This all hits the net yield.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
We are LettingFocus.com - the landlords’ expert and I’m David Lawrenson, the author of “Successful Property Letting” - the UK’s top selling property and buy to let book for the last 3 years.
I have been a landlord and property investor myself for over 25 years. I know all about HMO and multi let property as I have let one for over 20 years.
At LettingFocus we offer independent unbiased
seminars for buy to let investors and landlords as well as one to one advice covering all aspects of being a landlord and investing in property.
Unlike many in the still largely unregulated buy to let and property “advice” business I am not linked to a property company, developer, estate agency or bridging loan provider.
As such I am able to give unbiased independent advice on where to buy (which areas), what type of property to buy, when to buy and how to buy property at a low price and whether or not to go for Houses in Multiple Occupation. I can also explain how to reduce the risk of getting a bad tenant.
CHECK OUT THESE PAGES AT OUR SITE LETTINGFOCUS.COM:
Our Events only take place twice a year.
For our NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors click here:
Next Property Investing Seminar and Networking Event
We have GREAT OFFERS for landlords too, Click here: Services and Products for Landlords to see our Landlords Resources (Useful Links) page. (Selling services to landlords and property investors and have a national coverage? You could be a partner, please get in touch!)
For general info on our SEMINARS AND CONSULTING click here: Property Seminars, Networking Evenings and Consulting
ONE TO ONE CONSULTING click here: Property Consulting
CLIENT TESTIMONIALS from past customers click here: Testimonials
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IF YOU HAVE A SITE WHY NOT LINK TO THIS BLOG OR OUR WEBSITE?
Read this Related article on Multi Let Houses: http://www.lettingfocus.com/pages/myarticles_HMOAdvice.html
Read this article on landlord licensing:
http://www.lettingfocus.com/pages/myarticles7.html
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What a fascinating area - it's pretty well all student HMOs here.
My nephew's place was not fully compliant in respect of the fact that though there were 6 of them living there, they did not have wash basins in each room.
However, it was decent enough accommodation - there were lots of other amenities - and for all I know Birmingham City may have adopted a softly softy attitude on when the wash basins must be put in - perhaps giving landlords time to make the changes (and for the government to change its mind on this rather daft aspect of licensing).
But wow, the yields here were good.
Good Yields on HMOs
I calculated his landlord would have been getting about 6.75% gross, though running costs on this kind of property will probably peg back net yields to 5%.
And student demand was very high. This was clear from the fact that most properties had notices on them to stop students calling to make enquiries about next year.
Downsides of Houses in Multiple Occupation
However, there are downsides to HMO lets for a landlord.
There is a lot of work checking people in and out and recruiting new tenants - especially if the tenants are all on separate tenancy agreements.
HMO properties also tend to get a lot of wear and tear -and it can be hard to get people to pay up for damage - as each tenant will blame the other. Expect to be asked to mediate a lot between warring tenants. This all takes a lot of your time up.
Often you have to pay the council tax and electricity and gas, especially if you are letting each room separately. And you may have to pay an HMO licensing fee if the property is big enough or if the local authority requires it.
This all hits the net yield.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
We are LettingFocus.com - the landlords’ expert and I’m David Lawrenson, the author of “Successful Property Letting” - the UK’s top selling property and buy to let book for the last 3 years.
I have been a landlord and property investor myself for over 25 years. I know all about HMO and multi let property as I have let one for over 20 years.
At LettingFocus we offer independent unbiased
seminars for buy to let investors and landlords as well as one to one advice covering all aspects of being a landlord and investing in property.
Unlike many in the still largely unregulated buy to let and property “advice” business I am not linked to a property company, developer, estate agency or bridging loan provider.
As such I am able to give unbiased independent advice on where to buy (which areas), what type of property to buy, when to buy and how to buy property at a low price and whether or not to go for Houses in Multiple Occupation. I can also explain how to reduce the risk of getting a bad tenant.
CHECK OUT THESE PAGES AT OUR SITE LETTINGFOCUS.COM:
Our Events only take place twice a year.
For our NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors click here:
Next Property Investing Seminar and Networking Event
We have GREAT OFFERS for landlords too, Click here: Services and Products for Landlords to see our Landlords Resources (Useful Links) page. (Selling services to landlords and property investors and have a national coverage? You could be a partner, please get in touch!)
For general info on our SEMINARS AND CONSULTING click here: Property Seminars, Networking Evenings and Consulting
ONE TO ONE CONSULTING click here: Property Consulting
CLIENT TESTIMONIALS from past customers click here: Testimonials
BUY THE BOOK click here: Buy the Book at Amazon
THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
To JOIN our Free QUARTERLY NEWSLETTER simply send an email to david@LettingFocus.com - Please note we WILL NOT send spam or sell our mailing list to advertisers!
IF YOU HAVE A SITE WHY NOT LINK TO THIS BLOG OR OUR WEBSITE?
Read this Related article on Multi Let Houses: http://www.lettingfocus.com/pages/myarticles_HMOAdvice.html
Read this article on landlord licensing:
http://www.lettingfocus.com/pages/myarticles7.html
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
Over on the right hand side you will find a button which says “Site Feed.” Simply copy the site feed link into your News Reader or News Aggregator.
If you have a website & are thinking of reproducing material here, that’s fine but we DO require a link to the blog to be included, including also all the links in this section. (The full article including all links must be available to ALL VIEWERS of your site and not restricted.)
TO VIEW RELATED POSTS select a “Category” at the bottom of this page.
WANT TO ADD A COMMENT OR VIEW OLD COMMENTS?
To add a comment to this post, simply click on “link to this post” to add your comment and to view comments of other people.
Labels: HMO, HMOs, house in multiple occupation, houses in multiple occupation, landlord license, landlord licensing, multi let houses
This entry was posted by lettingfocus, on
Monday, March 26, 2007.
