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I'm about to venture into the HMO market and have lined up a number of viewings on existing HMO's in Coventry/Birmingham area as well as those that have potential to become HMO's.
Historically I've been a BTL investor, so I'm a little out of my depth in terms of exactly what I need to be looking out for, so wondered if people have some advice on:
a) what to note, ask and look out for with properties which could become a HMO?
b) what to ask/check on those that are already HMOs?
c) Anyone have any experience in these locations?
I'm aware of Article 4 and am only viewing properties which are not in an Article 4 area. Also, I know that any property which will hold 5 people or more requires planning permission (though I'm still not up to scratch with what is required to get planning should I find a property which falls under this category).
I'll be looking at properties which basicaly have the possibility of providing 4 beds or more and idealy those big enough to put en suites with a minimum of 8-10sq/m.
Thanks for your help!
It's not planning - it's mandatory licensing.
Consider the council tax implications of going ensuite.
Area I live in is totally saturated with hmos, a brief look on rightmove / easyroommate etc shows there are tons of rooms available and much less demand.
DISCLAIMER just my personal opinion - for legal advice consult a qualified professional grown-up.
Which area do are you in? Lot of HMO's and student housing in Cov/Brum, but still relatively good demand for both students and professional sharers.
My understanding is that you potentially need both planning AND licensing, no?
i am from Coventry and also have HMO in Coventry . Forms past couple of years the Multilets from 4 bedrooms and above a struggling quite a lot and every second house in students area is already converted to multilets , as there are 1000s of new build student accommodation by builders .
so the HMO will ONLY work in Coventry if it’s approx 5-8 min walking from university and also looks like brand new , have good interiors , good looking furnitures , flashy kitchen bathrooms etc .
spending money or converting one to HMO is complete waste of money , it’s better you take a 4 bed and try to get it refurbished to a very high standard but also make sure you spend the money on the property which is 5-7 mins from uni or city center , anything else will struggle .
Thanks for this. Some good advice - I think from what I'm reading, it may be best to stay away from properties which are too central (like Stoke) as there is a lot of planned development and competition is going to be very strong. Do you own anything in Cov at the moment?
I know you said 10-15 min walk from to uni, but what's your take on Earlsdon. This seems like a safer bet, both for student and professional lets, so I'm thinking of here maybe as even resale may be easier.
I think you're right too about maybe just buying a traditional 4 bed and making high standard. That said, some people have mentioned that it could well be mandatory to get planning/licensing on 4 beds in the not too distant future, so this is something to think of.
i have one in Stoke , which I rented to family as no students rents there now, it’s just too far for them as they have plenty of option closer to uni .
i have another student 4 bed property near university which rented very quickly but I spent around 25k just refurbishing the property and made everything brand new .
so a very high spec property near to uni will let but it needs to look very modern and upmarket, look at some of the purpose built student accommodation it’s should look close to it .
in Coventry you are okay if you have 4 rooms , but if it’s rented individually then anyways you will have to follow most of the rules of HMO( like firedoors , thumb turn locks , wired alarms etc )
I have taken feedback from multiple agency and all have the opinion the higher the number of rooms the difficult it is to let it .
earlsdon is good , the rooms size there is quite massive but bit far for students , the professional might take it but I do not have much idea of professional Tenants .
the way you refurbish the property will ensure if your room would get let or not.
Hi Lee,We have a video on this topic:
We have some resources that will further aid your decision.Concern over investors being sold HMO dreamWhen to say "no" to an HMO?The Real Life Costs of Running an HMOWhat is a Mini-Mo?Monday - Launch of HMO Week - overview of changes/how to find informationTuesday - Minimum room sizes/understanding licensing feesWednesday - Mandatory licensing changesThursday - Understanding management regulations/Rent to Rent HMO issuesFriday - Who is responsible and when to apply for a licence/consequences of non-compliance I would ask to see the rent roll of the property and also take something to measure the room sizes to ensure they are larger than the minimum allowance.I believe that ensuites in each room are a "must" although, as indicated above, some councils can decide to re-band them as individual dwellings, so you need to check the local authority's view on this.Generally speaking, investors don't tend to sell assets that are performing well, so, if anyone is selling one, you need to be very careful that you are not being sold a pup!
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Thank you - definitely a lot to sink my teeth into, so I'll be sure to read/watch all of this.
That's really useful - the rent roll, I presume is some form of proof of the rent which has been achieved over the last 12 months or so? I didn't realise they had to be ensuite? I thought it was just a nice-to-have!? Having listened to a few podcasts and watched a few up-to-date videos this week, most have said that they do not necessarily have to be ensuite rooms, so I'll definitely look into that.
And yes, that's definitely my concern - the properties I'm seeing which are already HMO's, I've been sure to ask the reasons why they're selling them. Most are experienced landlords, which begs the question, why would they flog them.... surely they're getting rid of their least lucrative properties.
Thanks again as always!
We did a 6 person HMO in 2016 and didn't need planning permission, it was done under permitted development. 7 would have needed planning.
Little tip. If you do anything else that does require planning permission ie extension etc, then get it done as a house not an HMO. Once you have it done then convert to HMO under permitted development.
Thanks for the info. With this being pre-Oct 2018, do you think the same would apply now?
If I extend the property, then I don't think I'd be able to apply for HMO Under permittted development would I? So you recommend doing the works first (with planning), and then getting further planning to convert to HMO? Do you know what the rough turnaround time for HMO planning is?
We did a complete renovation with planning permission for cutting in new windows, converting integral garage to a room, new bathrooms, and a 6mt x 5mt rear lounge extension.We had 3 bedrooms upstairs already and created 3 new rooms downstairs and named them study, games room and dining room, all with planning permission. Once we had our completion certificate we then converted the whole property, under permitted development, into a 6 bed/person HMO.This DID NOT require planning permission, just building regs approval, so we had all the fire alarms etc in place already.This was all done on advice of our architect who said we might encounter problems with the council if we did it as an HMO at the beginning, when we put in planning permission for all the works. It doesn't matter on the date, provided you can convert a house into an HMO under permitted development, then they cannot stop you, unless there is a section 4 in place in your area.Some councils have these as they are getting too many HMO's in some areas but even then you need to know what restrictions they have imposed as it's not necessarily a complete ban. One council I know has a clause that says no 2 adjoining properties can be HMO's.
Hope this helps