Buying a HMO?

[DevonshireDumpling1]

A HMO has come up for sale near to where I live - and it is something I’m interested in!

Has anyone ever purchased one before /currently own one and can give me any advice?

The property is in the style of a townhouse which currently has 3 tenanted bedrooms (+1 that is used for storage as is too small - box sized room)

The bedrooms are of large size. On the middle floor, we have an open plan kitchen/diner/lounge which is large and a separate reception room - which is currently used as a lounge. For investment purposes, I’d be looking to convert the separate reception room into a 4th tenanted bedroom. The 3 tenanted bedrooms already have en-suites so would only need to add one into the new bedroom.

Wouldn’t need to do any other works to the property as it looks relatively modern.
The property currently achieves £27k a year gross a year in rent - with the addition of an extra room without increasing the rent (£750PCM bills included) then it would achieve £36k a year - I could increase a little slightly more but I’d be making a significant amount of profit as it is…

Anyone with tips and advice??

Can you charge the same amount for rooms minus the living room? If I rented a room in a house with a living room then it went id potentially want to pay less or leave

I really dislike private landlords, milking it and ripping off people

As someone who has lived in HMOs landlords never think 'would I like to live here, would I like to live my life from one room with no living room?'

It's actually been very depressing living out of 1 room I would keep a living room

Parasite.

Honestly, unless you're desperate for the money, which reading between the lines you aren't, don't create an extra bedroom. It's not great for the well-being of the three tenants not to have a lounge in their home.

It's on the same floor as the kitchen and dining room so it's be a loud and shitty bedroom. I have no problems with landlords but I do think that taking away the living room isn't the right path for quality of life or tenant. If you want more profit, find it in a fair way.

You'd presumably have to reduce the rent of the existing tenants by quite a bit to make up for the loss of their living room. Is it worth it really?

How much is it?

HMOs are very strictly regulated (rightly so) so you may find it's at maximum capacity already otherwise, most likely, the current owner would already have done it.

They aren't all doing that. Some are but many are not. Nothing like tarring every one with the same brush.
Unfortunately there is not enough social housing, in fact not enough housing full stop.

Be aware that the kitchen and bedroom doors all need to be fire doors and there needs to be interlinked smoke alarms throughout the property. The maintenance can be ££££ for these.

Depending on the layout you may also have to add a sprinkler system to the property. It is also standard practice to provide a regular cleaner and gardener for communal areas plus a window cleaner as part of the service charge aspect.

Most importantly if filling 4 rooms you will be responsible for the health and safety of 4 humans plus the building and services. This can be expensive responsibility especially as the new regulations come in the coming months. Whilst these generally only currently affect social housing, they are definitely moving into the private sector more .

So basically if you know you are willing and keen and can afford to be a great landlord, go for it but if you just want the money and not the responsibility, leave it for a social enterprise or charity to snap up.

You will likely need to leave the living space to be compliant.

If I was you I would instruct a management company to look after everything for you. They will take a percentage of the rent but it will make it much easier for you, they will also deal with the council to ensure you are compliant.

No wonder landlords have such a bad reputation...

You sound like a greedy parasite.