Houses in multiple occupation derby, also known as HMOs, describe a situation whereby different tenancies in a residential building rent rooms in the dwelling and share the other communal areas, including bathrooms, kitchens, and living spaces. HMOs are usually preferred in areas where people either have a high proportion of students or professionals who are searching for affordable living conditions or short-term accommodations. Whether a person is a landlord who intends to invest in an HMO or a tenant seeking to rent a room, knowledge about the ins and outs of HMOs can guide such persons into making an informed decision. Below lies an examination of the concept of HMOs and their benefits and associated challenges together with critical regulations to be known.
What is a House in Multiple Occupation (HMO)?
An HMO is a property let to three or more tenants who are not living in the same household but share facilities. The facilities can be shared in the form of a kitchen, bathroom, or even a living room. HMOs can be single houses or even apartments with just a few rooms or with many large bedrooms.
Qualification requirements that make a property become an HMO include numbers and the kind of facilities shared. In the UK, for example, a house is called an HMO if rented to three tenants or more but come from different households and in cases where they have common facilities.
Benefits of HMO living
- Affordable Housing: Probably one of the major benefits that characterize HMOs is the fact that they are fairly affordable. The rental cost for a room in an HMO is usually less expensive than the rental cost of an entire flat or house for any student, young professional, or indeed any individual on low wages.
- Social Living: It is a type of social living as many of the tenants share common spaces and often come to know one another. HMOs are also attractive to new-in-town tenants or someone who wishes to extend their social circle.
- Convenience: To make them more accessible, HMOs are often positioned in convenient locations proximal to public transport, shops, universities and workplaces. That which helps tenants save money and save time is easily a practical choice for the busy person.
- Temporary flexibility: HMOs would be great for tenants only requiring short-term accommodation or awaiting another place. Most HMOs have no long-term tenancy ties, which works quite well for any tenant that needs temporary accommodation.
Benefits of Investing in HMOs as a Landlord
- Higher Rental Yields: For HMOs as landlords, rental yields are always much higher compared to single-let properties. As such, the overall rental income is likely to be much higher in a case where rooms are rented out separately.
- High Demand HMOs will always be in demand: The general location, like in a university town or city with a hospital or large employer, means that the cost and convenience of shared accommodation ensure your property is always in demand.
- Reduced risk of void periods: The more the number of tenants on the property, the lesser the chances of void periods. In case one tenant leaves the space, others will continue to rent the property.
Important considerations by landlords
- Licensing Requirements: There should be compliance of a property with HMO licensing that may differ by location. Many localities require the landlords to apply for an HMO license specifically. Failure to comply will incur fines and legal prosecution.
- Property maintenance and safety: Property should be in good condition, so that any tenant might feel safe to stay in that house or flat. Landlords must ensure that the property is safe for their tenants. The property should have fire alarms, obtain gas safety certificates, and electrical checks will also be done regularly. Commensally areas should be kept clean and in good repair.
- Tenant Management: The management of tenancy sometimes becomes an issue since the number of tenants is normally very high. Communication to the tenants should be clear so that they understand what constitutes rules and responsibilities. A system to be used in settling disputes or issues should also exist.
Provisions on HMO Tenants: Statutory
A tenant in an HMO should be aware of his rights and responsibilities. A landlord should keep the living accommodation safe and habitable. The communal amenities should be well cared for and accessible to tenants. The tenants are also expected to pay rents on time and respect the property and fellow tenants.
HMOs are flexible, extremely affordable living arrangements for individuals in search of shared accommodation. Whether you are a landlord looking to realize the benefits associated with HMOs or a tenant seeking affordable housing, knowledge of the pros and cons, as well as regulations, surrounding HMOs is more than important. With this knowledge, you’ll be well-equipped to make the right decisions that best fit your needs.
