HMOs (Houses of multiple occupation), can offer significantly higher rental yield – making them a popular option for landlords. However, if you’re considering converting a buy-to-let property for sale into an HMO, there are a few things you need to be aware of before you get started.
Here’s a list of the main things to be aware of.
What is an HMO?
An HMO is a property that’s rented by three tenants or more who aren’t members of the same household (for example, a family). They’re not only popular with landlords, but with tenants too, as they’re generally a cheaper option, plus a good way to share accommodation with friends or other like-minded people.
What’s the Advantage of an HMO?
The main advantage is the elevated rental yield – which becomes particularly pronounced if you develop a portfolio of two or more HMO properties. Additionally, running an HMO comes with more peace of mind; as if you can’t fill one of your rooms, you’ll still have tenants renting out the other two, three or four rooms in the meantime.
How to Convert a Buy-to-let Property for Sale
If you’ve spotted the ideal UK property investment on the market and you want to convert, it’s likely that you’ll need a licence from the local authorities. This is definitely the case if you’re planning on renting to five tenants or more, if the tenants share a kitchen or bathroom, or if the building is three storeys high (or over).
Licences are usually valid for five years, after which you’ll need to reapply.
Rules and Regulations
There are certain legalities you’ll need to abide by if you convert a property to an HMO. These include:
Bear in mind, when converting the building, if you make any major structural changes, you may need to apply for planning permission. If you’re not sure, get in touch with the local authorities for clarification.
Is the Property Suitable?
When viewing buy-to-let properties for sale, it’s important to consider the practicalities of converting. Remember, some of the living space can be changed into an additional bedroom – particularly if the property has more than one reception room. In some cases, it may also be possible to convert the attic or garage – though you’ll need to check if you can get planning permission for this type of work.
The property needs to be fit for habitation, so if you’re planning on taking on a ‘project’, keep this in mind. If you’re not sure you can finish it to a high enough standard, don’t buy it.
The Buy2Let Shop Limited
If you’re thinking of investing in UK property and want to find out more about converting to HMO, get in touch with The Buy2Let Shop team. We’re property investment agents with specialist knowledge of the buy-to-let market, and we hold regular free property seminars, designed to provide you with all the information you need to become a successful landlord.
To find out more, simply visit The Buy2Let Shop website today.