HMOs (Houses of Multiple Occupancy) are a popular investment option for Property Moose members - the combination of landlords wanting to capitalise on returns, coupled with the rising rents and bills for tenants means there is a growing demand for multiple occupancy residency at both ends of the market.
However, there are provisions that come with such investments. The Investment Team inspect all investment opportunities to ensure that they are of a high standard and this is key with multiple occupant properties, as we need to ensure it is realistic that each room is eligible for letting.
Once a property is deemed eligible for investment by the Team, there are conditions we review before considering the property for the platform. One key requirement for large HMOs (that can be a headache for landlords) is a HMO licence. As stated on https://www.gov.uk/house-in-multiple-occupation-licence, this applies if:
- it is rented to 5 or more people who form one household
- it is at least 3 storeys high
- tenants share a toilet, bathroom or kitchen facilities
Obtaining a license can be a long and gruelling process for landlords, having to go through the motions with their local council; but it is mandatory and in some cases penalties of £20,000 can be incurred for renting out an unlicensed HMO - obviously something to avoid at all costs!
You could be fined up to £20,000 for renting out an unlicensed HMO
Although Property Moose has successfully gone through this process previously, to ensure efficiency and lower costs in an upcoming HMO opportunity, we decided to offer our investors a unique opportunity.
A seven bedroom HMO was offered to the team, and instead of listing the property as it was, we agreed with the property partner to have two HMOs created from the conversion of a substantial semi-detached house. Both properties are now on separate title deeds. This will hopefully maximise returns for investors in the properties.
The renovation is almost complete and the first of the two investments will go live next week! The first is a three-bedroom HMO, and will be followed by the larger four-bedroom property, which will launch in 2-3 weeks. Investing in both could mean the benefits of a seven bedroom HMO without the hassle and expense of planning and licensing. The properties sit in the popular investment area of North Liverpool and have separate entrances, back doors and yards. They stand side-by-side, are spread over three floors and are on separate title deeds.
Disclaimer and Legals
Property Moose does not provide any advice in relation to investments and you must rely on your own due diligence before investing. Please remember that property prices can go down as well as up and that all figures, rates and yields are projections only and should not be relied on. If in doubt, please seek the advice of a financial adviser. Your Capital is at risk if you invest. This post has been approved as a financial promotion by Resolution Compliance Limited.
Property Moose is a trading name of Crowd Fin Limited which is an Appointed Representative of Resolution Compliance Limited which is authorised and regulated by the Financial Conduct Authority (no: 574048).
