So You Want To Run An HMO?

This post has been borne out of the numerous emails I receive from people wanting to leave the day job and invest in property – focussing on HMOs due to their higher yield.  I answer every email honestly and, I hope, encouragingly but my enquirers disappear back into the virtual world and I never hear whether or not they’ve pursued their dreams.

If you’re considering writing to me for advice on ditching the 9-5 and earning enough money through HMOs to keep your family, go travelling and leave a decent nest egg for the kids, below is a typical response:

“Dear Very Nice Person Who Has Taken Time to Email Me

Thank you for your kind comments about the blog and I’m glad you enjoy reading it.  Before I sell you the golden key to untold wealth and flexible lifestyle through owning HMOs, let me ask you a few questions which you must answer yourself honestly:

  1. How much money do you currently have? If you don’t have any, I suggest you open a savings account, tighten your financial belt and save up.  Despite what anyone will tell you (having relieved you of several thousand £s for the advice), property investment requires money – cold, hard cash.  If you borrow every last penny from the bank, you are effectively working for them to pay their interest rates, there is little margin for unforeseen disasters such as a new boiler or roof and, if your sums are correct, there will be enough profit for yourself, but is it enough to live on?  If you decide to joint venture with another investor, bear in mind that profits must be split amongst the parties involved regardless of the level of work undertaken by one or more individuals.

If you do have some money – perhaps a divorce settlement, inheritance, result of many years of hard work and saving – ensure you are content to tie your money up this way. Your money WILL be tied up for years unless you’re prepared to remortgage (and expose yourself to fees) and you may have to wait a while for your investment to get up and running before you head for the hills on your long awaited extended holiday.

  1. Do you intend to manage the HMO yourself? If so, are the people you live with supportive?  Many people who have contacted me have a young family; so if you’re working 40 hours a week, you may have a wife and children who want to spend time with you at the weekends and evenings.  Will they be OK if you’re on call or have to nip off to change a lightbulb/stop a flood/ deal with a tricky tenant?  Your spare hours will be spent with additional paperwork, admin and bill paying.  However, if you want an excuse to spend time AWAY from family commitments, then investing in HMOs is definitely for you.
  1. Would you prefer to use a letting agent? Perhaps your job or lifestyle means that you’re not able to self manage and you’re happy to pass the responsibility over to an agent.  Thank goodness you’re realistic and know your limitations, BUT be prepared to pay for the service.  Agents rely on the bread and butter of tenant and landlord fees and the beauty of an HMO is the tenants are transient thereby creating ample opportunity to charge both tenant and landlord lots of lovely application, referencing, inventory, administration, check-in/out fees – and several times over depending on the number of rooms in the property.
  1. Are you handy? If you’re doing the management you’ll need to lift unwanted and broken furniture, find beds, redecorate, learn how to mend a vacuum cleaner (99% of the time it just needs emptying) and know why the washing machine has stopped working (no-one ever looks at the filter).  It also pays to know how to change a lock, put up a mirror, hold on to a trusty cleaner and, from February, know your immigration law.  In the last month, we’ve had no less than 10 room changes for which we’ve been left 6 unwanted wardrobes, 3 contraband fridges, 2 broken beds and soiled mattresses, a huge hamper full of odd shoes and a sofa bed which had to be sawn up and destroyed IN the room in order to get it out.  These items don’t always fit in the back of a Ford Galaxy and, unless you work out at the gym and are under 40, you may struggle to lift them on your own.
  1. Do you have a strategy or a plan which can translate from paper into the real world through your hard work and sweat and, more importantly, do you have enough hair to withstand the pulling out you’ll want to do once a month?

If you’d still like to go ahead, talk to me – I’m here to help and very happy to guide you through your journey into HMOs.  I can’t live the experience for you but I can provide hints to make your life easier.  I will leave you with this piece of advice: just do it.  Try HMOs, they’re fun, will take you outside of your comfort zone and, if you treat it like a business, they will eventually become a good source of income providing you act within the boundaries of the law and your own morals.

Kind regards


Aka HMO Landlady

If you’re still reading and would like to find more about the practical and business side of running HMOs, I’m putting together a half day workshop focussing on purchasing and getting your HMO up and running as well as the day to day administration.  And, if you’d like to make a day of it, we can spend the afternoon looking at different HMO set ups (all properties are within walking distance of each other).  Come and meet my husband and I, we’re friendly, encouraging, open and have run HMOs for 9 years.  Complete this form here with your preferred date and we’ll contact you.  The venue will be in Eastbourne, East Sussex (as I can’t transport a building) and the price will be £75 (no VAT) per person including all catering, plus £25 if you’d like to stay for the afternoon HMO property show round.

Any other queries?  Contact me at


Filed under being a landlord, Future of HMOs, Management of an HMO

3 responses to “So You Want To Run An HMO?

  1. jane macswayne

    Hi good post and you were very helpful with all my queries when I was starting out. l love running hmo and it has been a sharp learning curve, all that you say is so true. It helps to be compassionate but not taken for a mug. I wish you well for 2016

    • Thank you Jane and a very Happy New Year to you, when it comes! I’m happy to help but lots of people want me to sell them the “dream” of living off property in an unrealistic timescale which I’m unwilling to do. I was sucked in during the 2007 boom and the property deals were duds – I’ve done much better since as I stopped listening to “experts” and relied on experience instead.

  2. Great advice and thanks for sharing! From an accountant’s point of view i would also look into the tax implications of making the change. Especially with buy to let landlords , there are more measures in place from 2016.

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