Sunday, July 21, 2024

What things you must consider while converting your property into HMO?

Are you thinking of converting your property into an HMO?

Whether it is a new landlord or a seasoned landlord. They will both agree that the HMO conversion process is a complicated process. No matter how high the cash flow and valuation reward, things can go wrong at any time. It is better to gain some knowledge and experience first.

Take expert advice and make a decision so that later you do not have to face any kind of problem. In this article, I have tried to cover all aspects of HMO services.

Have a look!

HMO conversion and its’ types

It is a legal conversion of a property where three or more than three unrelated tenants can share a house from different households. They can share the common areas like the living room, toilet and kitchen facility. 

What type of property are you going to convert into HMO?

I know that you don’t want to convert your farmhouse in the middle of the countryside into an HMO. This is for obvious reasons. You will not be able to find good tenants there unless they are rich and don’t need to work. You can do one thing. I will give you some suggestions to convert those properties into an HMO. 

You won’t believe that police stations, old factories, fire stations, shops, guest houses, churches, prisons or even GP surgeries can be converted into HMO. The best part is they already have toilets, kitchens, rooms and living rooms. You don’t have to struggle much. You can easily convince the local authority to operate it as HMO. Another way is to buy lets. 

Risks and Rewards associated with HMO

Let’s see the rewards first!


A. It offers more income than normal To Let. It is because the rent is paid per room for the property, not as a whole. If you optimize the space and perfectly design the HMO, you can achieve an increase in income of over 300%.

B. Another advantage is given by the government. If you convert your property into HMO, the government offers a 5 per cent vat reduction. Well, it is a great tax advantage. You are getting a 5% off on your building cost.

C. Due to tenant diversification, you have less fear of tenants paying rent. The chance of moving out of all the tenants at the same time is very less. Thus the cash flow will not stop. 

D. The commercial valuation of an HMO is very high. 

E. It is a great way of repurposing your old property into something that not only gives money but a sense of satisfaction also. 


A. It has high entry barriers as it is difficult to buy, comply and find the tenants for the property.

B. Demands and demographic needs change over time. Choosing the wrong area can make things worse.

C. HMO management in London is a complex process and it can lead to the misjudgement of the project timeline. Unexpected delays can cost you more money.

D. It is dangerous territory as it does not have any exit strategy. Make sure you have a backup strategy.

E. Having an inexperienced team may result in the rejection of an HMO plan. 

F. It might be possible that the council does not give you planning permission. It is a tricky task to understand their rules and regulations. So, it’s best to work with experts in property management to operate further. 


Before starting construction work, it is advisable to consider the building regulations. Sometimes people forget and neglect the key part of HMO conversion. It can affect the layout. There are some rules and standards set for the building and construction work.

These standards may vary by the council. Thus, it is best to talk to an architect or builder so the building and planning permission process does not get hampered. House manage, a property management company in London helped me to meet every standard set by the council. 

Final words

House of Multiple Occupations has seen a rapid increase in popularity over the past few years, mostly around the busiest places of the city centre. It is a great investment in densely populated areas as it offers investment opportunities for landlords. More and more landlords are investing in HMOs because they are getting a high return on investments in these properties. 

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