Affordability is the biggest factor impacting the housing market at the moment. The huge hike in energy prices and food prices were enough to start feeling the pinch. Now add into the mix that people are starting to be impacted by the ever-increasing interest rates… People might be getting a little twitchy. High cash flow strategies are what we specialise in at Brentor and a particular favourite of ours is HMOs. We’ve spoken before about why they’re all but recession proof. You can read it here. If you’re just starting to work HMOs into your property strategy, read on as we’ve collated everything you need to know.
Research and Planning
This MOST important place to start is by making sure that you understand the local regulations and licensing requirements for HMOs in your area. This varies per area so once you’ve chosen your investment area, become very familiar with the legislation. When choosing your area, make sure that you research your target market and demand for HMO accommodations to make sure that they’re viable. Here are our top tips on choosing the right location for your HMO. Assess the financial viability of the project, considering construction costs, potential rental income, and expenses. Consider factors such as location, accessibility, nearby amenities, and potential for rental demand. Do your due diligence, including inspections and assessments of the property's structural integrity and zoning regulations.
Obtain Necessary Permissions
Once you’ve identified the potential property, it’s time to check with the local planning authority to ensure the property is suitable for HMO development and obtain any required planning permissions. Familiarise yourself with building regulations (and it helps to make friends with the Building Control Officer!) and ensure compliance with fire safety regulations, minimum room sizes, and necessary amenities.
Property Layout and Design
There is so much to consider when determining the optimal layout for the HMO. Make sure that the number of bedrooms works with your finances and regulations, are the communal areas big enough to make it a comfortable space, where will your kitchen facilities go, off suites or en suites? We’d recommend that you speak to an experienced architect who really understands how to make communal living work. Don’t forget, you also need to ensure the design meets safety standards, promotes privacy for tenants, and maximizes the property's potential rental income.
Construction and Renovation
Then the real fun begins… The build phase! Again, we’d highly recommend that you hire reputable contractors and professionals, such as architects, builders, electricians, and plumbers, to carry out the necessary works. Preferably contractors who have worked on HMOs in the area before, so that they understand the requirements and importance of complying with them. Make sure that the utilities are services going to the property are fit for purpose. If not, you’ll need to consider installing or upgrading them to meet the needs of multiple occupants. Remember, HMO development requires thorough knowledge of local regulations, careful planning, and attention to detail.
Comments