Setting up an HMO from scratch by @HMOlandlady

by HMOLandlady

9:24 AM, 24th September 2012
About 7 years ago

Setting up an HMO from scratch by @HMOlandlady

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Setting up an HMO from scratch by @HMOlandlady

So, I’m doing what I promised I’d never do – manage some else’s HMOs. Over the years I understood why lettings agents were sniffy about HMOs and the amount of time managing the house demanded in proportion to the 10% management fee. But I yielded after a friend decided to invest his inheritance and asked my advice.

I’ll look for any opportunity to go property searching, especially if I’m not the one buying. The first property was one I’d seen six months earlier on behalf of someone else and it had languished on the market as, seemingly, no one could see its potential: a maisonette with four bedrooms, newly fitted kitchen, new boiler, 2 toilets, a bathroom and huge sitting room on the market for £155,000. Considering a 2 bed flat in the same area will set you back £130,000 and a three bed house no less than £180,000 I reckoned it was a bargain.

The owner lived there with her daughters and granddaughters who appeared to spend much of the day watching TV, smoking, eating in situ and waiting for the laundry fairies to appear. The place was crammed with junk, dirty and we had to pick our way round the rooms looking the ceilings to get an idea of space. It was on with an agent who repeatedly blocked my attempts to view the property so I knocked on her door and asked to see it anyway and, luckily, she didn’t tell me to b****r off.

My friend immediately saw the potential I’d been talking about and we arranged a private sale. Unfortunately the valuation came back at £130,000 due to its condition so the vendor (being desperate to sell) lowered the price and the investor increased his stake – we got it for £145,000 with a month to complete.

Four weeks and a £20,000 refurbishment bill later and I’ve started to show round the first potential tenants. I’ve been transported back five years to when I started my own HMOs, but then I only had a paint brush, a baby in a pram and enough naivety to believe that all tenants are charming, law-abiding, rent paying, psychologically balanced people.

The investor lives out of town so I’ve managed, advised, schmoozed the Council (it’ll have to be licensed as it’s in a three storey building), bought the pots and pans, bathmats and airers, mattress protectors and curtains. I’ve scouted charity shops and the local auction for furniture and dug out some pieces I have spare in one of my HMOs. The best bit? I went to a household auction last Saturday but they were only selling 100 lots an hour and had over a 1000 to get through; feeling worse for wear I bid on a couple of bits, placed absentee bids for the rest and went home to bed. I didn’t hear anything from them so went along on the Monday morning to collect a plastic Scottie dog a friend fell in love with (no bidding competition there) and 2 x 1930s style brass library lamps procured from the Dorchester Hotel in London following their refurbishment. “That’s £600, madam” the cashier said. “Eh?” I gulped as I desperately racked my brain to check I had been suffering from a hangover on the auction morning and hadn’t still been merry. “Yes, you won the lot!”

I handed over my credit card, kissed goodbye to any forthcoming luxuries and phoned the investor: “Guess what! The good news is I got you some furniture for the HMO which used to adorn The Dorchester Hotel, but the bad news is I missed out on the crystal chandelier for the hallway. You owe me 600 quid”.

Next time….. photos of the finished rooms, the weird and wonderful people who responded to the ad and the man from Blast Productions sticking a camera in everyone’s face in a bid to understand HMO living for a forthcoming BBC documentary.

HMOlandlady refurbs (before) 1HMOlandlady refurbs (before) 2HMOlandlady refurbs (before) 4

 

 

 

 

 

 

HMOlandlady refurbs (before) 6HMOlandlady refurbs (before) 5

 

 

 

 

 

 



Comments

Devon Landlord

20:38 PM, 24th September 2012
About 7 years ago

I don't know what it's like in other peoples' part of the world but from where I'm standing it seems to me that housing standards are having a funny turn. With the extra demand for shared property created by the recent changes in legislation for those up to thirtyfive, you would think that someone would have told them that it might be a good idea to enable landlords to provide more shared accommodation rather than attempting to reduce the amount of HMO space available. Throughout Devon the variation in room sizes accepted as appropriate for sharers ranges by about 40%, so that what is an excellent shared space in one part of the County is frowned upon in another. I have also heard that landlords are being asked to carry our work on shared rooms in HMOs which cannot be supported by legislation let alone common sense. Now, don't get me wrong. I want the cowboys who exploit tenants out of the game as fast as anyone else, but it seems to me that once a landlord comes clean and presents his property for certification, all manner of strange requirements seem to creep out of the housing standards woodwork. Has anyone else found similar starange things happening and is there any advice out there to prevent what seems to be off the wall requirements from someones wild imagination preventing good landlords from trying to meet the housing crisis?

Mark Alexander

21:40 PM, 24th September 2012
About 7 years ago

My standard response now to any such strange request is "please can you point me to the legislation which necessitates me to do what you are asking"

Joe Bloggs

7:01 AM, 25th September 2012
About 7 years ago

this is exactly what i fear will be happening in LB Newham very soon with compulsory blanket licensing. the licence fee is just the starter.

Industry Observer

9:44 AM, 25th September 2012
About 7 years ago

If managing an HMO for someone else, as opposed to your own where with no agent you must have the licence in your name, just make sure the licence is in the name of the landlord

13:53 PM, 25th September 2012
About 7 years ago

Cannot really pin-point what the nub of this article exactly is.
However it's good to see some entries in the commentary verifying the fact that
all council workers get sent on an induction course which involves them being hypnotised
into believing they own all the people in all the houses in all the streets
within their county. Ironically schools within a county have compulsory
bullying policies - which appear to be perfectly counter-balanced by the fine
art of bullying that councils seem to feel justified in exacting on general
members of the public within the county/city including landlords that operate within it's boundaries and dare to rent out 'their' houses.
"please can you point me to the legislation which necessitates me to do what you are asking"
"or I will poke you in the eye" If only B.Fawlty were an HMO landlord.

Tony Atkins

1:02 AM, 26th September 2012
About 7 years ago

I had a bad experience in Oxford eight years ago which put me off renting out HMOs in that city ever again: my house was a large two-storey, 4-bed Victorian terrace with two reception rooms and a big kitchen-diner-utility-bathroom extension. I lived in one room and rented out 4 others, and we all shared one living room, the kitchen and two proper bathrooms.

I was required to license the property as an HMO and received a visit from Environmental Health. Imagine my surprise when I was told that I must do the following: replace the battery smoke detectors with wired-in ones and a heat detector in the kitchen, replace all the solid-wood Victorian doors with lockable fire doors with self-closers and intumescent strips, install illuminated fire escape signs, install fire-proofing material on the wall between the kitchen and understairs cupboard and underneath every step on the staircase, right down to the bottom, and build a bike store and bin store in the front garden. He also wanted me to install sinks in every bedroom until I protested and said where was the legislation saying this must be done; he also relented on replacing all the doors except the kitchen one and on the ghastly illuminated fire escape signs.

He appeared to regard an HMO from a health and safety perspective as equivalent to self-contained bedsits, each with their own cooking and bathing facilities, or to a hotel. He just couldn't get his head around the notion that houseshare tenants could cooperate to share a kitchen, respect a no-smoking policy, have a cleaning rota, share meals and other social activities like going to a movie or supermarket together, and be in most respects little different from a family with two parents and three grown-up children who were working and still living at home.

Gilly

19:11 PM, 26th September 2012
About 7 years ago

I could not agree more with your sentiments TonyA. I honestly think that we should mount a campaign against the attitude of Councils to landlords as I think it has reached unacceptable, toxic levels. I remember when no one would talk to the Inland Revenue years ago as they were so officious - well a miracle occured there and now they could not be more helpful - the same is needed of Environmental Health and Councils.
I have just had an Improvement Notice withdrawn by my local Council (what they were doing issuing it in the first place is another matter - not adhering to the Enforcement Concordat that's for sure) and I am only disappointed that I did not tackle the issue in Court rather than through the RPT, as they have got off lightly.
Fire regulations were first considered years ago before there were non-smoking policies, gas safety certificates, sophisticated alarm systems and heat detectors. Statistics now show that HMO properties are far safer than single occupancy homes (and yet they are thinking of insisting on sprinkler systems in wales god forbid - for which the increased effectiveness is zilch apparently). There is a shortage of housing yet students no longer share rooms ( as I did) and live in ludicrous locked boxes with fire doors slamming shut in every direction, but which are propped open with wedges - which sell out within minutes at the local supermarket when the term begins. Five bed homes are totally discouraged by legislation and licensing and all these ridiculous expectations are pushing landlords towards converting houses into flats for no more than two households, surprise, surprise
My lovely property had mains connected smoke alarms everywhere, heat detectors, fire blankets, extingushers and even emergency lighting - all this in a non-licensable 2 story house for four - though there are now five sharing very happily. it had three downstairs exits (though they insisted that there was only one escape route) and two upstairs fire escape windows - surely enough is enough.
It was deemed to be a house of bedsits yet like your place, the tenants did not see it like that nor did any of us want a house like that. Locks on doors (required by many Insurance companies) and separate tenancy agreements (despite moving in within weeks of one another) apparently made this simple to categorise.
I now have a joint tenancy agreement but would not dream of asking anyone to fund a tenant who has left - I have always operated that way, whether I am entitled to or not - it is just not fair to the tenants - we just quickly get a replacement and I cover any shortfall, if there is one. Nothing has changed in the house - except that I had to cover the keyholes with escutcheons - yes that's right - a huge smoke hazard, keyholes - oh and to glue up some cracks in the Victorian pine doors.
Well I've won and kept my Victorian doors but issuing a joint agreement is a pain and totally unnecessary - people can come and go but the running of the house has remained the same for years. They know the set-up that they are entering - one of co-operation and harmony and that is why there is always a queue a mile long to live there. If normal houses were allowed to be normal shared houses then the housing crisis would virtually disappear overnight.
I was a student for far too long, but I lived in some lovely places with young professionals, because there were always five of us and we just operated as a single household - which is what most people want to do.
Licensed houses can still be low risk and that should be the emphasis, not this cover-your-back attitude of H & S which has just gone mad (in my view). Sorry to rant. I wish I could chat to Blast productions - they would have a serial out of it rather than one documentary - but probably no viewers!

Tony Atkins

9:44 AM, 27th September 2012
About 7 years ago

Gilly, your experience is uncannily similar to mine: I forgot I had to cover my keyholes too! Can you point us to the evidence you refer to, that HMOs are safer than single-family occupation? Because EHOs and the wider anti-HMO community are convinced by "fire statistics" that HMOs are basically death-traps and need to be licensed and regulated like bedsits, hotels and care homes. There is also much confusion caused by a failure to distinguish between "This Life"-style houseshares like the ones you and I lived in for many years, with unlocked bedrooms and shared domestic bathrooms and kitchens, and bedsits, which are essentially self-contained studio flats with their own cooking and washing facilities.

I can see why there's concern over bedsits, with multiple potential fire locations within the same building, but I find it very difficult to understand why there is so much hostility to houseshares of 4/5 students or young working people. What the authorities and busybody councillors who are hostile by political persuasion to the entire PRS should be doing, instead of fussing about escutcheons and seeking to license and inspect every landlord in their boroughs, is focusing on the bad landlords who cram 12 immigrants and benefit claimants into a 3-bedroom house (and the shed), never get the boiler checked, rarely repair anything, use ancient furnishings etc etc. As Ben Reeve-Lewis's column on this website shows, such work is never easy, but demonising the entire HMO sector and licensing everyone is just a gigantic distraction. What's really needed is a willingness in councils and courts to use their existing powers and resource departments like Ben's properly, funded by serious fines and confiscations on the landlords - and the subletters of council houses and housing association properties - who flout the safety laws and who are usually heavily involved in benefit fraud and maybe illegal immigration too.

14:55 PM, 6th October 2012
About 7 years ago

>Next time….. photos of the finished rooms, the weird and wonderful people who responded to the ad and the man from Blast Productions sticking a camera in everyone’s face in a bid to understand HMO living for a forthcoming BBC documentary.

Interesting, and I'm sure you'll be great, but perhaps illustrates how narrow the base is TV programmes work from.

12:53 PM, 29th April 2013
About 6 years ago

I have temporarily taken on the property management of 4 HMOs in Eastbourne and am looking for a really good, reliable property management agency. Do you know of any in the area? Thanks for your help.

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