Georlan Properties HMO

What is a HMO

A House in Multiple Occupation (HMO) is a property rented out to at least three people who are not from the same "household." Each occupant signs their own tenancy agreement and pays their own rent, while sharing common facilities like a kitchen, bathroom, toilet, and living room. This type of property is subject to stricter safety standards than single-let properties.

Why an HMO Is a Good Investment

Investing in HMOs is a powerful strategy for property investors because by renting out individual rooms within a single property, you generate multiple rental incomes. This approach significantly mitigates the financial risk and maximizes profitability compared with a single-let property; if one room becomes vacant, your cash flow is protected by the income from the other tenants.

The primary draw of HMOs is the enhanced cash flow. By renting out multiple rooms, you can generate an income stream that is often two times greater than a comparable single-let. While a standard buy-to-let might yield an average of 4-6%, HMOs can achieve yields of 8-12%.

The general housing shortage and consistent demand for shared, affordable housing also help to maintain high occupancy rates.

Our Experience in HMO Sourcing

Our company's extensive experience in sourcing HMO properties involves a keen understanding of development potential. We identify profitable opportunities by focusing on high-demand areas and properties that can be acquired below market value and are in need of renovation, ranging from three-room flats to multi-room houses. We conduct thorough due diligence and financial modeling. We determine if any planning permission is required for extensions, if the property is in an Article 4 Direction area, or if it will be a sui-generis HMO. By leveraging our network to access off-market deals, we secure properties with the highest potential for profitable HMO development, ensuring our projects are financially sound from the start.

Our Experience in HMO Development

Our company has a strong track record and extensive expertise in developing HMOs. Our dedicated team of experts, including architects and tradesmen, manages every project from start to finish. We handle everything from smaller HMOs with 3 to 6 rooms to larger, sui-generis HMOs with 7 or more rooms. Our projects range from light refurbishments to full-scale renovations, which often include attic conversions, property extensions, and the addition of en-suites to each room.

We understand that maximizing a property's profitability requires a focus on compliance, legality, and safety. Our development process is meticulously planned to meet all necessary standards, including fire safety requirements and minimum room sizes. Through expert architectural design and planning, we optimize the property layout to create high-quality, modern living spaces that are both appealing to individual tenants and fully compliant with all regulations. Our goal is to create spaces that not only attract but also retain desirable tenants.

Financing An HMO

If you are undertaking a full-scale HMO refurbishment, the development will likely involve using a bridging loan for the initial purchase and renovation. Bridging loans are a short-term, flexible financing option that provides the capital needed to acquire a property and complete the conversion work quickly. Once the property is fully renovated and compliant, it is refinanced with a long-term mortgage. At this point, it will have a higher "Gross Development Value," especially if the mortgage lender provides a commercial valuation, making this kind of development project highly profitable and ready to generate income. This is a common strategy known as Buy, Refurbish, and Refinance (BRR).

After converting your property to an HMO, we furnish and decorate each room to a modern, professional standard. We equip it with suitable furniture, appliances, utensils, and cleaning tools, balancing comfort, durability, and practicality. All furnishings meet the latest fire regulations.

Our HMO Management

Our experienced team specializes in comprehensive HMO and co-living management, providing a hands-off solution for your portfolio. For an affordable fee, we expertly handle everything from valuation and marketing to rigorous tenant screening and deposit security. Our services ensure timely rent collection, expert management of tenant disputes, and regular property inspections.

We also manage all utility bills, maintenance, housekeeping, and safety compliance, including all eight required certifications and assessments. We handle both additional and mandatory HMO licenses to ensure full legal compliance.

Our goal is to guarantee professional tenants and high returns while adhering to all legislation, ensuring a hassle-free experience so you can focus on building your investments.