If you’re in the Property Investing game, you will have heard people talking about HMOs, whether that’s at a networking event, at a seminar, on a training video or on a recent blog. But what is a HMO?
HMO stands for Houses of Multiple Occupancy
The Housing Act 2004 introduced a new definition of a House in Multiple Occupation (HMO) from 6th April 2006 in England and 30th June 2006 in Wales.
- If you let a property which is one of the following types it is a HMO:
- An entire house or flat which is let to 3 or more tenants who form 2 or more households and who share a kitchen, bathroom or toilet.
- A house which has been converted entirely into bedsits or other non-self-contained accommodation and which is let to 3 or more tenants who form two or more households and who share kitchen, bathroom or toilet facilities.
- A converted house which contains one or more flats which are not wholly self contained (ie the flat does not contain within it a kitchen, bathroom and toilet) and which is occupied by 3 or more tenants who form two or more households.
- A building which is converted entirely into self-contained flats if the conversion did not meet the standards of the 1991 Building Regulations and more than one-third of the flats are let on short-term tenancies.
- In order to be an HMO the property must be used as the tenants’ only or main residence and it should be used solely or mainly to house tenants. Properties let to students and migrant workers will be treated as their only or main residence and the same will apply to properties which are used as domestic refuges.
- New Legislation has been added to HMOs in October 2018
In short, HMOs, when done correctly, are quickly replacing the Buy to Let market. They enable an investors to receive multiple income streams include monthly income and yield of between 8 – 15%, adding value to a property, income of over £30,0000 per year and long term capital.
If you’d like to discover what makes HMO on Steroids unique and are interested in investing in HMOs across Berkshire, we’d love to hear from you.