What is an HMO?

HMO stands for House in Multiple Occupation.

It refers to a property that’s rented out to multiple individuals who share common facilities such as kitchen, living spaces and bathrooms. The individuals living in HMOs will have their own bedrooms, some with ensuites, but typically share certain amenities.

Diversification of income: each tenant has their own tenancy agreement meaning the risk is spread across several rental incomes within one property. This means that with our aim of having six bedrooms per house, should one room be empty for a month, you still have five other rooms paying their monthly rent.
Higher rental yields: an HMO typically generates higher rental income compared to single-let properties.
Potential for higher property value appreciation: some mortgage lenders will value an HMO as a commercial property vs the typical bricks and mortar for a residential home therefore increasing the capital of the house.
Adaptable to market conditions: HMOs are more resilient to fluctuating markets and can be adapted for various uses such as student housing, luxury co-living for professionals, or social housing.
Increased demand: in areas where there’s high demand for affordable housing or student accommodation, HMOs can be particularly attractive leading to lower vacancy rates and a consistent flow of tenants.