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Converting your property into an HMO can immediately boost your income. Here are some tips you may need to enter the HMO market.

Hot Tips for Property Owners Eyeing the HMO Market

Letting out properties has always been a lucrative proposition for landlords with desirable properties. However, when you rent out a house to a family, there’s only so much rental income you can get out of it. 

Converting your property into an HMO can immediately boost your income to such an extent that it can be difficult not to succumb to the temptation. However, HMO management calls for higher involvement by the landlord than renting out a single-let property. If you have never operated an HMO, you will find the following tips valuable:

Understand What Constitutes an HMO

In simple terms, an HMO is a property shared by several tenants who can be individuals, cohabiting couples, or families. For the property to qualify as an HMO, the tenants cannot form a single household but must have their own households. While they occupy their units, they share common facilities like the lounge, bathrooms, and kitchens. 

No occupant can have any other place of residence because, as per the law, the HMO should be their primary residence, at least for the period they are tenants there. Landlords need to know that they can use an HMO only to house multiple tenants and nothing else. The HMO must be shared by at least three persons, according to the website of the U.K. government.

Obtain the HMO License 

Depending upon the circumstances, you will have to obtain an HMO license. While small units are exempt, you need to apply for a licensee for HMO properties with more than three stories and five or more tenants from at least two households. You may need an additional license if your local council believes that landlords are not managing HMOs properly. 

You will need to obtain separate licenses for every HMO you own. While the fees vary according to the local council regulations, all licenses are valid for five years, after which, they have to be renewed. If this seems daunting, you can always seek help from Abode, a leading property management services company in Manchester.

Decide On Your Target Audience

It may seem obvious that if you find tenants who are agreeable to paying the rent you demand, you are home and dry. However, you have to be more careful when selecting tenants for your HMO as it is important that they get along well together and there is no friction when it comes to sharing common facilities. 

It is a good idea to focus on one type of tenant. Usually, the major segments of HMO tenants are students, young professionals, manual labor, single parents, millennials, etc., who are interested in lowering their rent burden. If you have not invested in a property, your choice of the tenant profile will influence your choice of the property location.


Even though operating an HMO is financially lucrative if you get everything right, you need to understand that unlike letting out your property to a single tenant, being an HMO landlord requires you to be more involved. You have to ensure that you market your property right, keep tabs on the rentals due, maintain the property in good condition, and stay legal.

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