A Guide to Best Practice for HMO Property Management
HMOs, or houses of multiple occupation, are tenancies where several tenants from different households live in one property, sharing living facilities like bathrooms, kitchens, and living spaces. HMOs are a popular choice amongst landlords in Kent since they can bring in a higher rental yield.
Landlords can charge a separate rent for each room or command a single higher rental amount each month from groups of sharers, and this boosts their revenue potential exponentially. However, HMOs also come with greater responsibility, particularly when property management comes into the equation.
Here is our expert guide to best practices for HMO property management in Kent.
- Choosing Tenancy Types
Landlords must first choose which type of Assured Shorthold Tenancy (or AST) to use. There is a choice between separate ASTs for every individual tenant or joint ASTs for all the tenants in the property. The latter is most common when friends or students live together since group tenancies work most effectively when the tenants who move in are already acquainted with each other.
- License Applications
Running an HMO property may require landlords to obtain a licence. Some local councils require them, while others don’t. Properties with five or more tenants are “large HMOs” and legally require an HMO licence. It’s essential to do the necessary research and investigations to determine whether a licence is required in your local authority arear and, if so, what the cost will be.
- Furnishing The HMO
There is no legal obligation to furnish an HMO, but letting a furnished property increases the chance of finding tenants more rapidly. In general, tenants stay in an HMO for less time than a conventional let and therefore prefer furniture to be included for added convenience. Each item of furniture provided needs to take into account the number of people who will be living there. It’s also important to consider wear and tear since the furniture will be used a lot more frequently in an HMO than in other types of rental property.
- Fire Safety
Before letting out an HMO, it must meet all the necessary fire safety requirements. Fire risk assessments must be carried out, and the property must be equipped with fire doors, escape routes and windows, fire extinguishers, fire alarms, emergency lighting, fire blankets, and clear exit signage.
- Finding Tenants
Usually, single rental properties are listed with letting agents who then advertise them on online portals. It’s possible to do this as an HMO landlord, but other ways of finding HMO tenants may be quicker and easier. Some possibilities include:
- Putting up posters in local universities
- Asking your existing tenants for recommendations
- Use a property management company like us!
- Considering the Problems of Managing An HMO
Managing an HMO is different from managing conventional lettings properties. When a whole property is let out to a couple, family or individual, there are likely to be fewer problems and issues between the tenants are extremely unlikely.
HMOs have more tenants, and they may not be familiar with each other before moving in. This can lead to some unique problems, including potential tenant disputes.
HMO properties are also susceptible to more wear and tear, and therefore items will need to be replaced more frequently.
Overall, HMOs require more attention from the landlord than single lets and, therefore, need to be run in a business-like manner.
Taking a proactive approach to repairs and maintenance, for example, is important to save money in the long term. Dealing with receiving rent from multiple tenants can also be time-consuming and stressful. Therefore, using a property management company is a good idea.
At Rooms in Kent we offer a comprehensive service, including managing emergency repairs, rent collection, marketing, and finding tenants.
To find out how we can make the process of managing your HMO in Kent more efficient and stress-free, get in touch with our team
