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Let’s talk about HMO’s – Houses of Multiple of Occupancy

This entry was posted on Wednesday, December 11th, 2019 by Nigel Fitzakerley

So what are they – HMO’s are basically houses where the rent is paid per room rather than for the whole house.  To do this you normally need a house in a high demand area, i.e. where the tenant is willing to rent a room rather than the whole house and also sometimes additional facilities are provided, such as an en-suite.

Normally bills (water, gas, electricity, council tax, tv license etc.) are included in the monthly price for the room, since facilities are shared.

In all honesty HMO’s aren’t the norm in the North-East and I think work a lot better in the South-East of England – due to the higher population density and monthly rental cost.  It is though something we do offer and have done before:

Below is an example of Eglesfield Road which we converted to an HMO – the property was a 3 bed, two story house which we converted to a 4 bed with 3 en-suites and the fourth bedroom using the original bathroom.  Properties in this area of south shields can be purchased for around £60k, if you hunt and negotiate hard enough and conversion costs are around £40k.  So all in it will probably cost you £100k ish.  So what do you get for this…

We rent out the 4 rooms for between £350 and £400 per month so make around £18k per year gross (18% yield) but pay around £300 per month in utility bills so net make around £14,400 (14.4% yield).

So here’s a few photo’s to give you a taster of what can be achieved:

Top Floor before conversion into two en-suite bedrooms:

Bathroom before Development

Kitchen before Development

Top Floor being Converted

Coming together…

Top Floor Bedroom 1…Pretty Nice!

Top Floor Bedroom 2


Main Bathroom

I think you’d agree the tradesman did a great job!  If this is something which interests you, let me know.


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