Landlords Co-Living Development

Why Are HMO Lettings Different From Other Property Lettings?

As a prospective landlord you may be wondering whether to invest in a single-family  dwelling or a HMO property. While both options offer their own benefits and drawbacks,  there are some significant differences between the two that you need to be aware of before  you decide to go down the road of HMO property management in Liverpool. 

First, let’s get back to basics. 

What Are HMOs? 

HMOs (Houses of Multiple Occupation) are properties housing three tenants or more  forming more than a single household and sharing kitchen, bathroom, or toilet facilities. Properties housing at least five tenants are “large HMOs” and they require a license to  operate. 

Can I Let Any Property Out As An HMO? 

One of the biggest differences between HMO and single-family rentals is that virtually all  residential properties (except leasehold properties with a lease containing no letting clauses)  can be rented out as a single-family dwelling. However, not all properties are able to be let out as HMOs. 

Planning And Licensing 

Single-let properties require no license to be let out. When it comes to HMOs, large  properties housing five or more individuals must be licensed under national law, while local  authorities may require smaller HMOs to be licensed too. Planning permission may also be  required for a change of use when renting out a property as a HMO in Liverpool, something  that is not applicable to single household lets. Since each council area has its own controls  regarding planning and licensing, it’s important to contact your local housing department for  clarification of the rules before making your investment.  

Regulations And Safety For HMO Lettings vs Traditional Lettings  

There are numerous rules governing all rental properties and health and safety standards,  but HMO lettings regulations and compliance requirements are more onerous. 

For a single let, a risk assessment must be carried out, furnishings provided by the landlord  must have a fire safe label, working smoke alarms must be fitted on all floors, and clear  escape route access must be available. 

All these regulations apply to HMOs along with extra requirements including: 

  • Installation of smoke alarms in every individual unit 
  • Installation of fire doors with closers  
  • Installation of an interconnected, main-powered fire alarm 
  • The provision of fire extinguishers for each floor.  
  • A risk assessment in writing must also be provided for licensed properties.  

There may be local authority requirements to comply with as well as these national  regulations, so checking with the housing department in Liverpool is crucial. 

Management And Maintenance Requirements 

All rental properties require a certain amount of maintenance and management. All rental  homes must be maintained in a good condition and dealing with emails and phone calls  from tenants throughout their tenancy is part of the deal.  

HMOs, however, come with higher maintenance and management demands. Tenants move  out and in at various times and there’s likely to be a higher turnover of tenants which results  in more enquiries, advertising, and viewings.  

Maintenance costs will also be higher since HMO communal areas are shared, meaning that  they are not the exclusive responsibility of any one tenant. For every room, cleaning must be  done in between lets and inventories completed for each check in and out. Due to the larger  

number of people and higher turnover in a HMO, there is likely to be considerably more  maintenance required. Appliances are likely to require replacement more frequently too due  to the extra wear and tear.  

What makes HMO lettings unique is the dynamic between the tenants. They can easily be  from all walks of life and may or may not be familiar with each other before moving in. This  can result in greater tensions between individuals and an even higher turnover due to  disagreements between residents. 

Investment And Returns  

While the investment in a HMO, both upfront and over time, will probably be higher than  that in a single-family dwelling, the potential rental yield can also be considerably higher.  Rental income and your net returns can easily be twice as much as that you would receive  for a single-family rental, even when considering the extra costs.  

Voids are also less common with HMO properties. Since rooms are let individually, there’s  less likely to be a month where the rental income fails to cover the costs.  

There are many advantages to becoming a HMO landlord in Liverpool, but it isn’t always an  easy task. Fortunately, with the right HMO property management company in Liverpool on board, you can enjoy all the benefits of HMO ownership without the tedious requirements  of finding and vetting tenants, dealing with rent payments, and arranging maintenance.  

Give the team at the Portus Lets Ltd a call today on 0151 329 3538 or email us at to find out more about how we can help you maximise your  HMO rental profits.

Stay In The Loop

Sign up to our newsletter.

This field is for validation purposes and should be left unchanged.
  • Unit N, Baltic Creative,
  • 49 Jamaica Street,
  • Liverpool,
  • L1 0AH
Opening Hours

Our normal office hours are:

  • Monday - Friday - 09:00-18:00
  • Saturday - 10:00-16:00
  • Sunday – Closed