The private rental sector is a market that is continuing to grow, as the buying market goes through regular fluctuations. With comparably lower deposit costs and monthly payments, tenant demand has been quite overwhelming, resulting in Landlords having a wide variety of prospective tenants interested in their property.
However rent prices have been rising for a few months now and it is harder for single people, without buddies to live with, to secure a rented property just for themselves. So the alternative for them is to rent just one room in a house share or house in multiple occupation (HMO). This reduces their expenses and landlords can benefit from purchasing properties with a large number of bedrooms which could be too large for most families.
What Is a HMO?
HMO are properties let to at least three tenants who are not related and share common living spaces and bathrooms. The types of properties that can qualify as a HMO include:
• Shared Houses and Flats
• Households with a lodger
• Hostels and Bed & Breakfasts for vulnerable people
• Self-contained flats converted from houses
Landlords and HMO
If you’re interested in becoming a landlord to a HMO then you must obtain a licence which will outline conditions for your property, provided it is three or more storeys and occupied by five or more people, who form more than one household. If you do not require a licence you are still expected to meet management regulations and inspections under the Housing Health and Safety Rating System.
A lot more time and investment goes into managing a HMO as you hold multiple contracts for tenants within one property, however it is still fairly similar to a regular landlord’s responsibilities. There is also great emphasis on providing good housing conditions; otherwise your local council can get involved. Another similarity is the requirement for good landlord insurance as certain tenant behaviour can affect your policy.
For more details on HMO you can contact your local authority.
The continuing boom in the buy-to-let property market has attracted many first time venturers into the market. The poor returns offered by bank saving accounts and the dire problems encountered by the stock markets across the world this week will convince even more speculators to put their cash into property.
Research will reap rewards
It is vital for any landlord new to the business to have a good understanding of his costs. While it is impossible to become an experienced property investor overnight it is not impossible to do plenty of research before you take the plunge into a new project. It is fairly simple to get a quick understanding of the costs involved in setting up and a bit of diligent research will soon pay dividends when it comes to saving money.
Although it is not as easy as with some other types of insurance, a quick perusal of the internet will find a few insurance comparison sites that offer landlord insurance quotes.
Regulation compliance a must
Adhering to fire and safety regulations is an absolute must and is not an area where you should think about cutting corners. Make sure your gas appliances are thoroughly checked by a fully authorised gas engineer, and don’t just take his word for it, ask him for identification and proof that he is qualified to certify your appliances. It is your responsibility to check that everything is in order. Fire and safety regulations are absolutely essential and don’t forget accessories like furniture, carpets and curtains must adhere to set standards.
Speak with professionals
Even though finding landlord insurance quotes can be easy, choosing a letting agent can be complicated and expensive. If you are entering the sector with the idea that you will expand and eventually become a professional landlord then you will probably want to avoid the expense of an agent. If that is the case make sure you join a professional body such as the National Landlords Association. The cost is minimal compared to the advice and experience that can be passed down to a newcomer, and special deals organised by professional bodies will probably recoup joining fees in no time at all.