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Hi all,

I want to set up a HMO within the next 12 months between 5 and 8 rooms for the professionals close to a town. Good spec and furnished as I want to get the most out of my investment. I live in cannock and I would be willing to sent one up within 20 miles of this area, I'm thinking a big old end terraced property that is in a really bad state.

I'm just finishing off my first flip and it should be on the market in 2 weeks time. Im in the building trade and have good people around me I just need to get all the info together now so I'm not hanging around so I can get started ASAP. I think I no most of it but I'm always after more info and what procedures do I start first when setting up a HMO. If anyone does no anything then could you please share some info on this as I need something to follow to so it all flows nicely.:)

Many thanks

Jamie 

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Hi Jamie

 

Welcome to the Hub.

 

I'm not a HMO investor so I'm sure someone with experience can help you out.

 

But couple of things I would initially do and consider would be:

 

• Contact local agents to see if there's a demand for shared housing, then go on sites like Rightmove, Spareroom etc to see if this lines up with what the agents say

 

• Check with the local council to see if there's licensing for HMOs 

 

• Will the HMO be kept or sold on? If kept, how and who will manage it? If sold, then only investors will be interested in it so market is limited already especially if there's no history of income from the property.

 

• Financing it - will it be funded by cash or mortgaged? They're not your standard BTL mortgages.

 

Once those are nailed down, then it's the layout/design/setup - e.g. smart meters, security, fire safety etc.

 

As I said, not an expert but hope that helps a little. Good luck!

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Hi Jamie

Use the portal -like spare room to see how new people are looking for rooms in your target area and then how many rooms are available. Ideally, you should be looking at a ratio of 4-5 people per room available. Then look at planning permissions to see any large HMOs in the area (seven beds or more) and when you find them go through the documentation to see how the process has gone and if there have been any objections.

From the mortgage angle, it is very difficult to get one if you don't have any landlord experience and ideally, you need one-two years to gain access to the majority of the lenders. Running an HMO is a very proactive occupation and whilst you can get a letting agent involved you are still responsible for everything, so need to know the rules inside out. Also, you need to look at the new HMO regulations that are coming in October about room sizes etc.

 

There is still a huge market in this sector but there are lots of areas where there are too many rooms so you always need a plan B of how the property can be converted back into a single let or if big enough if there is demand for flats.

 

 

 

 

Regards Simon

Searchlight Finance Ltd

T:01565 654005

 

Landlord and specialist property finance advisor only dealing with investors, landlords and developers throughout the UK and beyond.

Buy to Let - Commercial Finance - Bridging Loans - Development Finance - HMO Finance - Refurbishment Loans - Multi Let - Limited Company - Student Lets - Portfolio Finance

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Thanks Simon that's great. The only thing that puts me off is that a lot of people say they are not worth doing, everything else I can deal with as I will put everthing into it like I have already have with work and property, they are a good investment and I realise they are not going to be easy, nothing is when you get a good return but I don't want to take the wrong path and waste anytime either, do you own any HMO? And what do you no about them? I'm highly motivated and I no I could make 1 work with the right info but you can't beat talking to someone who has been there. 

Many thanks

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