But to Let HMO

Houses of Multiple Occupancy (HMO’s) as a Buy to Let Investment

Buying a property suitable for multiple occupancy or buying and converting a house to multiple occupancy can offer a great way to increase your rental yield and spread the risk across more tenants.

It is most suited to older properties that are generally larger (with larger rooms) and located in major towns and cities. Victorian semis or town houses often work best as they have at least two reception rooms and are spacious though conversion costs are likely to be higher for an HMO than a single household property. HMO’s are also a suitable investment for student letting (Student Accommodation).

The rental income will often be two or three times that obtainable for the same property rented out as a single household, which makes it a sound and profitable investment.


In general there are two types of HMO’s:

HMO – 3 or more tenants (forming more than one household) and shared kitchen, toilet or bathroom.

Large HMO – 5 or more tenants (forming more than one household), 3 or more stories high and shared kitchen, toilet or bathroom.

What else do I need to know?

Those renting out Large HMO’s have to apply to their local council for a license (some councils may also require a license for other HMO’s).

Landlords of HMO’s also have additional responsibilities to those renting out single household properties:

  • The landlord is liable for the occupiers’ Council Tax and therefore an amount to cover this should be included in the rental.
  • Landlords converting properties into HMOs need to be aware of planning and building regulations, environmental health and fire regulations must be complied with.
  • A special insurance policy will be required.]
  • Nuisance claims brought by neighbours are likely due to increases in noise and rubbish. If not managed correctly the landlord could be held partly responsible for this.
  • The landlord or house manager must by law be in control of the occupancy situation at all times. Tenants must not be allowed to come and go as they please without proper documentation – this in any case is in the landlord’s interest for rent collection and eventual possession.

The landlord is responsible for repairs and maintenance in communal areas and to:

  • the structure and exterior of the house – including the walls, window frames and gutters
  • water and gas pipes
  • electrical wiring
  • basins, sinks, baths and toilets
  • fixed heaters (radiators) and water heaters

Landlords of HMOs must also make sure that:

  • proper fire safety measures are in place – for licensed HMOs smoke detectors must be installed
  • annual gas safety checks are carried out
  • electrics are checked every 5 years
  • the property is not overcrowded
  • there are adequate cooking and washing facilities
  • communal areas and shared facilities are clean and in good repair
  • there are enough rubbish bins/bags

Of course you will want to minimise your costs in buying a HMO property.

So get a cheap, instant conveyancing quote for your HMO buy to let property here