HMO stands for “House in Multiple Occupation.” It is a type of residential property in the UK where multiple tenants who are not part of the same household share common facilities such as bathrooms, kitchens, or living areas. HMOs are often used to accommodate students, young professionals, or low-income individuals seeking affordable housing options.
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An HMO typically houses three or more tenants forming more than one household. Each tenant usually has their own bedroom but shares common facilities.
Tenants share amenities such as kitchens, bathrooms, and sometimes living rooms. This communal living arrangement helps reduce costs for each tenant.
In the UK, HMOs are subject to specific regulations and licensing requirements to ensure the property meets safety and living standards. Properties with five or more tenants forming more than one household and sharing facilities must have a mandatory HMO license.
HMOs can offer higher rental yields compared to single-family rentals because rent is collected from multiple tenants.
There is strong demand for affordable and flexible rental options, particularly in university towns and urban areas with a high concentration of young professionals.
The risk of rental voids is reduced as income is derived from multiple tenants. If one tenant vacates, the impact on overall rental income is less significant.
