Convert to HMO

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  • Convert to HMO

    What changes should I make to a terraced house for a successful HMO. In the target area its overwhelmingly DWP LHA tenants. Funnily enough my house doesn't need a licence (5 beds but only 2 floors) but I want to kit it out with the appropriate standards.

    Apart from the obvious smoke alarms, fire doors etc. The house I'm upgrading has a gas fire in each room. Presumably that goes.

    An experienced landlord said don't get a key-meter or any kind of pay as you go charging as the tenants allways argue about payment, and the electric frequently gets cut off, leaving the tenants using candles or other bizarro behaviour.

    So I cough up for Council Tax, TV License, Gas, Lecky and Water.. then aportion that on a weekly basis to their room rate. £55 for room, then about £12pppw.

    Does that get written into the AST as £67 per week, to stop them not paying?

    So I'd get £55 from the local council, then hope the rest will be paid.

    Should I insist on guarantors and deposits?

    Any tips experienced landlords can give me on this kind of tenancy? I've had plenty of upmarket AST's on expensive London property but this is my first foray into the world of HB.....

  • #2
    If starting from scratch rewire the house so that each room has its own card meter, that you sell cards for electric - and lock the boiler and controls away.

    and what ever you do do not get a water meter installed

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    • #3
      Hmmm... good points, thanks.

      The house is being rewired, so its an option. The meter's aren't cheap even on ebay though...

      Apportioning the common areas may be difficult. I'm guessing i'd put a fairly low amp circuit breaker in for those tenants who thought an extension cable from the kitchen to their rooms would reduce costs!!

      One more question to the experienced HMO operators out there.... Laminate flooring or carpeting? Its going to be a total refurb so I can choose! I'm leaning toward laminate as its easier to clean after they've dropped their takeaways on it.

      I guess a HMO is gender neutral, although I'd prefer a mix of male and female tenants, i still hold to the (quaint) belief that females may take more take of the place than males, but who knows??

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      • #4
        I have tried both and would always go for carpet. If you get decent stuff it lasts a lot longer than you might think. Its also easy and relatively cheap to replace a hallway or a single room should it be necessary.

        If you use laminate and need to repair it then you have the hassle of taking off skirting etc and its a real pain. Likewise if you need to get underneath it to fix a leak or route cables etc.

        Laminate is also a lot noisier - not good for the tenants if you have a downstairs bedroom.

        I would recommend Gala carpet (also goes under another name which I have just forgot). Its rated heavy domestic, bleach cleanable etc. Have had it 7 years in a six bed student HMO and get it cleaned every other year and although some areas dont come up like new, it still looks very good with few signs of wear.

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        • #5
          jonthemon, how about carpet tiles? I've found some nice ones in B&M Bargains. Cheap, and you have to look out for seconds, but easy to replace the bits that have been melted or burnt due to tenants hot-knifing etc.

          YES write all the bills into the rent and add a bit on for additional wear and tear. Make sure you can break the whole of the rent down incase benefits ask for it. Definitely get a deposit and guarantor and 4 weeks in advance. Remind the T that the 4 weeks in advance means they will never be in arrears provided they pay on time. (Benefits often get put on hold.)

          Put in your AST something like "no overnight guests, no more than 2 guests at a time, guests must not be left unaccompanied in the house at any time" or you'll end up with all the local bozoes hanging round 24/7.

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          • #6
            Oh yes, and don't forget you will be responsible for cleaning the communal areas and this includes pee up the walls and all over the floor and sick splattered all around the toilet (and, yes, this is the voice of experience!). You might like to add the cost of getting a cleaner in weekly to the rent, and the cleaning stuff. And the gardener.

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            • #7
              One more thing - lost keys. Make sure the Ts know that if they lose or forget their keys they will have to get a locksmith (£50 or so) and that you will only be available to attend a lost key from 7.30 - 8 pm or whatever.

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              • #8
                Very related point... You don't have any problems with Article 4 compliance in your area do you?
                I can take no responsibility for the use of any free comments given, any actions taken are the sole decision of the individual in question after consideration of my free comments.

                That also means I cannot share in any profits from any decisions made!

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                • #9
                  Originally posted by jonthemon View Post
                  TV License
                  I don't think you need to unless you provided the TV (and the tenancy agreement does not say otherwise). In addition, if tenants have TVs in their rooms they will require individual licences.

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                  • #10
                    Originally posted by jjlandlord View Post
                    Originally posted by jonthemon View Post
                    TV License
                    I don't think you need to unless you provided the TV (and the tenancy agreement does not say otherwise). In addition, if tenants have TVs in their rooms they will require individual licences.
                    That statement depends on the AST structure. If you let the whole HMO on a joint and several contract then a single license will cover the whole house. Separate ASTs for each room will mean that separate TV licences would be required.

                    A similar circumstance occurs with reference to the 'shared areas' discussed above. The landlord is not responsible for communal areas when the HMO is let as a whole house.
                    I can take no responsibility for the use of any free comments given, any actions taken are the sole decision of the individual in question after consideration of my free comments.

                    That also means I cannot share in any profits from any decisions made!

                    Comment


                    • #11
                      However, agree that contracts for LHA tenants will 99% of the time be on separate ASTs and not on a joint and several contract for the whole house. Such a contract suits the student market.

                      Make sure you check the mortgage for letting the property on a room by room basis. They are harder to come by.
                      I can take no responsibility for the use of any free comments given, any actions taken are the sole decision of the individual in question after consideration of my free comments.

                      That also means I cannot share in any profits from any decisions made!

                      Comment


                      • #12
                        Originally posted by Phlash View Post
                        That statement depends on the AST structure. If you let the whole HMO on a joint and several contract then a single license will cover the whole house. Separate ASTs for each room will mean that separate TV licences would be required.
                        Correct, useful precision. I was assuming separate ASTs.

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                        • #13
                          I'd say porcelain tiles on the floor wherever you can.

                          And fit a "Surestop" on the water supply with a switch *above* the worktop.

                          Read HMOLandlady's book.

                          She actually gets away with CCTV in the common parts.

                          "CCTV has been installed in the other house and there’s been a few feathers ruffled. The main issue seems to be that the boys thought I’d have the system linked to my home computer and would spend a girls’ night in watching them walking up and down the hallways in their pants. They’ve been assured that there are easier and more pleasurable ways to search the internet for men in pants and the footage is only stored on the recorder locked in the cellar. However, capturing one of them trying to get in the house after a night out then falling asleep on the stairs may just be worth a post on YouTube……

                          Huddled in the cellar, the engineer was showing me how to operate the monitor and recorder. Tom had obviously forgotten the role of the cameras and heard us talking - the cameras duly picked him up sitting down with his ear to the stair tread trying to listen to our conversation. A very, very funny moment."
                          http://hmolandlady.wordpress.com/201...heres-trouble/

                          ML
                          Refer Mad Regulators to Arkell vs Pressdram.

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                          • #14
                            Originally posted by Phlash View Post
                            Very related point... You don't have any problems with Article 4 compliance in your area do you?
                            Thanks all for the info. Re: "hot-knifing": I'd rather hoped I could somehow avoid druggies and the true lowlifes.

                            Article 4 compliance??? Not sure I know what Article 4 is? I googled and it returned the European Convention of Human Rights, Article 4 bans slavery and enforced labour. Not sure the tenants will be too familiar with labour, forced or otherwise.

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                            • #15
                              Originally posted by jonthemon View Post

                              Article 4 compliance??? Not sure I know what Article 4 is?
                              Article 4 direction.

                              Have your local authority introduced an article 4 direction that restricts permitted development of HMO properties with between 3-6 occupants. If so you need planning consent for a HMO with more than 3 occupants.
                              Also check if selective licensing of HMO's applies in your area.

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