HOUSEs IN MULTIPLE OCCUPATION (hmo)
What is a HMO?
Benefits of HMO's
Benefits of HMO's
A House in Multiple Occupation (HMO) is a property rented out by at least three people who are not from one 'household' (for example, a family) but share facilities like the bathroom and kitchen.
Key characteristics of HMOs include:
- Multiple Occupants: At least three tenants live in the property, forming more than one household.
- Shared Facilities: Tenants share basic amenities such as bathrooms, kitchens, and sometimes living areas.
- Tenancy Agreements: Occupants might have individual tenancy agreements or a single agreement covering all tenants.
Benefits of HMO's
Benefits of HMO's
Benefits of HMO's
HMOs provide numerous benefits by offering affordable and flexible housing options for tenants, making them particularly attractive to students and young professionals who benefit from shared living expenses and shorter lease terms.
For landlords, HMOs can generate higher rental income compared to single-tenancy properties and offer a more stable income stream due to multiple tenants. This arrangement also diversifies financial risk, as the impact of one tenant defaulting on rent is minimised.
Additionally, HMOs make efficient use of housing stock, particularly in urban areas, helping to address housing shortages and support workforce mobility by providing accessible housing near employment and educational centres.
HMO Myths
Benefits of HMO's
HMO Myths
There are several myths surrounding Houses in Multiple Occupation (HMOs), such as the belief that they are only for students or that they are always poorly maintained and unsafe.
In reality, HMOs attract a diverse range of tenants, including young professionals and key workers, and must adhere to stringent safety standards, making them as safe as other rental properties.
Another misconception is that HMOs offer no privacy; however, tenants have private rooms alongside shared spaces.
It's also wrongly assumed that HMOs lead to neighbourhood decline and are more expensive for tenants, whereas responsible management can positively impact communities and shared costs often make them more affordable.
Types of HMO's
Working Professionals
Working Professionals
Working Professionals
Working professionals are generally individuals between the ages of 18 and 35, in professional employment. They live in just about every part of the country. This means that the type, the standard and the location of accommodation that suits these people is quite broad, making it a very accessible investment strategy.
Students
Working Professionals
Working Professionals
Student HMOs make up the majority of the HMOs in the UK and are, therefore, an incredibly well-established investment strategy. The student accommodation market is globally regarded as one of the best asset classes in the world. With its growing popularity and historically high performance.
Low Income
Private Care Homes
Private Care Homes
This includes individuals who are in receipt of government benefits such as Housing Benefit or Universal Credit, as well as ‘vulnerable’ individuals with mental or physical health and wellbeing issues, vulnerable women. Providing good quality accommodation to those who really need it can be hugely rewarding. There are already a number of fantastic organisations who collaborate with local authorities and private landlords to provide accommodation for these people.
Private Care Homes
Private Care Homes
Private Care Homes
This can include private organisations who work with children who are considered by the placing local authority to have high or complex needs. It is evident that through changes in legislation and media coverage, there is a national shortage in residential children's services and currently the current suitable properties are hugely outweighed by the demand, making this a viable investment strategy.