The world of HMO's can be a complicated one. Lots of unrelated people sharing the same spaces, with lots of rules and regulations attached to it - it can all seem quite daunting. However, if you get clued up and have an appetite for some degree of risk, it can prove to be a very lucrative strategy.
Lots of people usually have never heard of the term HMO - House Of Multiple Occupation - and many more of them once they know the full meaning of the acronym still do not know what they are. However if you say 'house share', please immediately understand what you're talking about. However, the term 'house share' generally conjures up the idea of 10 students sharing a 5 bed house with a bathroom that hasn't been cleaned since the 1980's and beer stains on the living room walls.
Whilst this was once the case, the world of HMO's has come on an incredible journey since they first emerged, and today, many of them boast elegance and luxury, and are becoming an increasingly sought after market.
The new age HMO targets white collar young professionals, many of which have high flying jobs in the city, but still can't afford to move out alone because of the crippling costs of living in the modern world. This reality has set flight to a 'high-end' HMO, where rooms are equipped with state of the art en-suites, technology and designer bedding. Digi-locks are used on occupiers rooms with private key codes to create a hotel like atmosphere. All these collectives make a very enticing deal when you consider that a HMO has all the bills included in the rent, including satellite TV and high speed wifi.
Really there are two main things you need to look at to get the basics of the HMO right. The first is it's location, which is essential as they only work well in certain areas of the country. The second, when looking for an actual suitable property for a HMO, is the floor plan - it's vital that you choose a property that can be easily converted, and just as easily converted back again into a family home should you need to sell the property quickly.
Choosing the right area
Always buy for demand. Thats one of the most famous sayings amongst property investors, and in the HMO market, its absolutely key. The quickest and best way to assess if theres demand for a HMO in a particular area is to go into Spareroom.co.uk - This is the biggest marketplace in the UK that advertises rooms for rent. Here you will find the option to search for the number of rooms available in a particular area or postcode, and also the number of people who are currently looking for a room in that same area. You can use these two figures that work out the level of demand. For example, if there are 50 people looking for rooms to rent in Surrey, but only 7 rooms available then the demand is 86% - great place to buy a HMO because you know you will fill the rooms; but conversely, if there was only 7 people looks for rooms in Surrey but 50 rooms available, that would tell you that theres an over-saturation in of HMO's in Surrey and therefore Surrey is not a good place to have a HMO.
Chopping and changing rooms
Understanding how a property can be adapted without completely ripping it apart
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