A Retail HMO caters to the private market – primarily the professional and student sectors.
Typically such HMOs require a Leasing Agent to source and manage tenants and oversee the upkeep of the property.
The rental yields are significantly higher than that of a UKGA HMO, though the cost of appointing a Leasing Agent must be considered when evaluating a property’s return on investment (ROI). Leasing Agent fees tend to be between 10-15% of rental yield.
The Retail HMO owner is also responsible for the upkeep of the property, its contents and in ensuring it meets with the required fire and safety standards. Utility bills and other incidental costs may be borne by either the property owner or the tenants depending on the leasing terms stipulated in your tenancy agreements.
Properties that are not pre-existing HMOs will require conversion and a HMO License. Licenses can be applied for once any required renovation work is completed and a site inspection by the local authority is undertaken. The process for securing a HMO license typically takes 4 weeks.
Considerations
- Select properties that are within close proximity and/or easy access to town and city centres
- Ensure the immediate area is supported by local amenities, retail facilities, transport channels, education and healthcare services
- Choose localities that are already considered popular rental hubs