Video Link: https://youtube.com/shorts/nrmr72APKDw?feature=share
Things you should know before investing in an HMO property
No1) Adequate Demand – There must be a demand for affordable housing in the desired area, if there is little demand, rooms will stay vacant for longer, and you may have to decrease a room’s listing price – affecting the asset’s yield
No2) Stricter legislation & licensing – In most cases, if your HMO houses more than 5 occupants, then you will need to get a licence.
This means you would have to take out more steps when renting out the property, which could mean adding extra bathroom facilities, or installing fire doors.
No3) Article 4 – Article 4 restricts permitted development rights which means that you will need to acquire planning permission to convert a standard residential dwelling (use class C3) to an HMO (C4/Sui Generis).
This can pose a significant threat to an HMO project as it means that the conversion can be delayed or rejected, as such, be sure to always check with the local authority to see whether there are any Article 4 Directions in your desired HMO location.
No4) Wear and Tear – HMOs experience wear and tear related damages faster than a standard single let, or residential property; carpets wear faster due to increased footfall, and white goods require more frequent maintenance due to increased use.
Keep these 4 tips in mind when investing in an HMO property to achieve the best possible returns. Stay subscribed to our YouTube channel for more property investment advice.