You may have heard the term “HMO” used to describe shared accommodation and this stands for “House in Multiple Occupation”.
The need for flexible, affordable accommodation is in turn increasing the demand for good quality shared accommodation. Providing a quality solution to changing housing demands with a well-presented shared accommodation property could bring you good returns – and better than what you are enjoying right now.
If you have a suitable rental property you have wondered if you could make more money renting out rooms to individuals rather than to one person or family….
But then how do you go about it? What are the advantages and disadvantages of converting a rental property in shared accommodation?
The Benefits If You Convert A Rental Property Into Shared Accommodation
Similar to investments, a degree of diversification is a way to mitigate risk. So, if you exclusively own family housing, then you are at risk and exposed if laws or regulations change which will impact your rental income.
By converting a rental property into shared accommodation, you diversify your property portfolio and therefore limit the damage if laws or regulations change in relation to one particular type of housing.
Another obvious benefit is that if you can fill your shared accommodation, and keep void periods to a minimum, then you have a chance of obtaining a higher rental yield.
The Risks If You Convert A Rental Property Into Shared Accommodation
If you currently target family homes, then swtiching to a new type of renter may present some challenges if you manage your own properties.
Tenants of shared accommodation have different needs and wants in comparison to tenants of family homes, and therefore you need to be aware of this so you can effectively market to them, and create the perfect place for them to call home.
Another risk is that people who live in shared accommodation will typically stay for a shorter period of time (on average), so you are likley to find that you have higher tenant turnover and therefore must be confident that you can quickly replace leavers to minimise void periods which wreck your profits.
What Are The First Steps To Convert A Rental Property Into Shared Accommodation?
First of all, you are likely to need an HMO Licence. It’s important to talk to a local agent that has a good relationship with the council and experience with HMOs to give you some valid pointers (this is something We Love Renters has experience with).
The licence will be valid for a period of time – that is currently 5 years –attract a council fee, and be per property not per landlord.
You may need to make alterations to comply with legislation, such as fire doors and fire alarms, while other alterations could even involve planning permission.
What Checks Are Needed To Convert A Rental Property Into Shared Accommodation?
Standard documents such as an annual Gas Safe Certificate will be required, while electrical safety checks need to be carried out and it is always good practice to have a portable appliance test (PAT) for electrical appliances supplied.
As you are in the process of converting a rental property into shared accommodation, the council will carry out a Housing Health and Safety Rating System risk assessment within a specified timescale of receiving a licence application. If they find what are deemed unacceptable risks, then they must be corrected.
Other Things To Consider Before You Convert A Rental Property Into Shared Accommodation
Once up and running you will also need to inform the council of any changes that you plan to make to the HMO.
When it comes to insurance it must covers you as a landlord for public liability, while fire safety regarding furniture and furnishings must be considered.
In relation to marketing your rental property, check out the competition in the area to get a feeling for what is on offer, consider how you can stand out.
But remember, price isn’t everything because often the quality of cheap rooms is poor and could possibly attract the wrong tenant.
Thinking about tenant needs is important to make sure that the facilities that you offer attract the best tenant for you.
How We Love Renters Can Help You
You may have seen us in the local news, as the story of Lowthian Road’s transformation made several newspapers. If you didn’t, you can read more about it in our blog: Lowthian Road Transformation – Paul Gough’s Pride Over Redevelopment Of Hartlepool Street With Close Family Ties
As part of Lowthian Road’s rejuvination, We Love Renters converted several large Victorian style properties into shared accommodation, and one-bedroom apartments.
You can see a tour of our one bedroom apartments that are currently being renovated by visiting our YouTube channel.
If you are sick and tired of having your houses trashed by bad tenants, not getting your rent on time, and feeling like your getting more aggravation than actually making money from your investment, then We Love Renters are here to help YOU!
Worried about leaving your current property management company?
We are more than happy to liaise with your current property management company, and we will do everything we can to make the process as simple, and stress-free as possible for you.
What We Can Offer Landlords And Property Investors With Houses To Rent In Hartlepool:
- Over 700 fantastic tenants on our waiting list (so we can let your properties FAST!)
- Local knowledge and expertise as we are based in Hartlepool
- Unbeatable service for both you, and your tenants
- State of the art accounting so you are paid quickly and correctly every week
- Comprehensive referencing of tenants so we match you with the best people for your property
- Support and project management of renovations projects (check out our latest property update by clicking HERE)
- Access to our reliable tradesmen in Hartlepool to complete any of your maintenance or repair work
What To Do Now:
To find out more about switching your rental properties to us, call us on 01429 36 36 36 or click the link below to request a landlord information pack: