Managing your own HMO property might seem like a great idea but only a few can manage the hustle involved. HMOs needs a lot of time and resources to manage it effectively that’s why you need to think carefully before you decide whether or not you are up for it. You need all of the facts upfront to decide if self management of a HMO is right for you.
If you’re not going to find the right HMO agent, then here are a few questions you should ask yourself before you decide to manage an HMO:
1. Are you a fit and proper person?
It’s a rule that you must be a fit and proper person to qualify to manage a licensed HMO.
This means you are not involved with dishonesty, violence, drugs, fraud, unlawfully discrimination or breaking tenant-landlord or housing law.
However, the application is considered on an individual basis, therefore, you are not automatically disqualified if you are declared convicted. Also, if the property does not require licensing or there’s no selective licensing, you don’t need to be a fit and proper person.
2. Are you ready for the responsibilities involved?
On a HMO you will deal with more tenants than in residential let. This comes with extra responsibilities to ensure the smooth running of the property along with the existing legal obligations.
You need to ensure there is fire safety measures- adequate fire escape measures- as the risk increases with the number of occupants. You may also need to provide adequate fire extinguishers and smoke alarms so the tenants can take necessary action on the event of a fire.
You will also need to ensure there are enough waste collection supplies and other needs to make the tenants better on the property.
3. Are you ready to deal with the common HMO issues?
With the potentially high turnover on your HMO comes with likely related issues. It opens up the possibility to leave void periods often when it comes to the tenant leaving and re-advertising.
Another issue is when a dispute arises between tenants. Since the tenants do not know each other before moving in, there’s a chance for tension and personalities clashing.
As a landlord, you are advised to try not to get involved but if it gets to a point where the tenant opts to leave because of the dispute, you can be flexible rather force them to live in an unhappy household. This is often a deal breaker for most landlords wanting to self manage a HMO.
4. Is the HMO ready for rent? Have you done spec-ing?
The Young professionals Market is lucrative but it can be very competitive and the standards are rising every day.
FOR an HMO landlord, you need to create a high standard and legally compliant property that will appeal to the young professional and serve their lifestyle needs.
This should include quality kitchen, storage, furniture, and fast broadband.
You can even go further to include BBQ areas, bike shed and so on. You will also need to supply enough laundry facilities for them to do washing easily.
5. Are you capable to run an HMO?
Running an HMO is not only time consuming but also tiresome compared to a residential let especially if there is high tenant turnover.
You’ll be responsible to clean communal areas and take care of any maintenance issues on the property.
If you are occupied-let’s say you have a full time job and you are not able to make regular visits to inspect and carry out repairs, self-management of a HMO won’t work for you.
6. Are you prepared for upfront cost and regulations?
Being an HMO landlord is way different from owning a standard property. You start by talking to the mortgage lenders about the specialist mortgage- which often they won’t allow you to purchase the HMO with the standard buy-to-let.
Then you need the Planning permission if the property was not initially an HMO. Some councils will allow a certain number of HMOs in the area and will need planning and licensing for a conversion.
IF the property is an HMO it needs licensing which will include inspection fees renewable every year.
To comply with this, you need to have fire safety precautions and all the necessary amenities as per the council requirements.
An alternative is a HMO management company that offers HMO guaranteed rent so you don’t have the hassle and stress from managing a HMO yourself.