What Does HMO Stand For?

Should HMOs Be All Bills Included?
In the UK property market, you may come across the term “HMO” when searching for a place to rent or invest in. HMO stands for House in Multiple Occupation, which refers to a property that is shared by three or more unrelated individuals who each have their own bedroom but share communal areas such as the kitchen or bathroom, otherwise known as a houseshare.

Breaking Down The Acronym

The “H” in HMO refers to the type of property that is typically involved. This could include a variety of property types such as a house, flat, converted building or purpose-built accommodation like large student residences. However, regardless of the property type, it must be designed or converted to provide separate rooms for individual tenants who then share communal facilities such as kitchens, bathrooms, and living areas. In other words, the “H” in HMO indicates that the property is a self-contained unit with separate living spaces for individual tenants.

The “M” in HMO stands for “multiple”. This refers to the number of occupants sharing the property. In order for a property to be classified as an HMO, it must be occupied by at least three people who are not part of the same family or household. This can include students, young professionals, or other individuals who are looking for affordable housing options.

Finally, the “O” in HMO stands for “occupation”. This refers to the fact that the occupants of the property are not the property owners themselves, but rather tenants who are renting the property. This is important because HMOs are subject to certain regulations that are designed to protect the health and safety of the tenants.

Managing a HMO: Key Points to Consider

When managing a House in Multiple Occupation (HMO), there are several key points that a landlord should consider. These include:

  • Tenant selection: HMO landlords must be careful to select tenants who are reliable, responsible, and will get along well with other tenants. This can involve conducting background checks, reference checks, and interviews to ensure that potential tenants are a good fit for the property. Read about the questions HMO landlords should ask prospective tenants in our HMO Housing article. 
  • Property maintenance: HMO landlords must keep the property well-maintained and in good condition. This includes ensuring that all communal areas are clean and tidy, that repairs are carried out promptly, and that the property meets all necessary health and safety standards.
  • Rent collection: HMO landlords must collect rent from multiple tenants, which can be challenging. It is important to have a clear and consistent rent collection process in place, and to follow up promptly with any tenants who fall behind on payments.
  • Tenant disputes: When multiple tenants are sharing a property, disputes can arise. HMO landlords must have a clear process in place for handling tenant disputes, and should be prepared to intervene and mediate if necessary.
  • Compliance: HMO landlords must comply with all relevant HMO Standards and HMO Requirements, such as HMO fire regulations, gas safety checks, and electrical safety checks. It is important to stay up-to-date with any changes to these regulations and to ensure that the property remains compliant at all times.
  • Property management: Managing a HMO can be time-consuming, especially if the landlord is also managing multiple other properties. HMO landlords may consider hiring a HMO property management company to handle day-to-day operations, such as rent collection, maintenance, and tenant disputes.
  • Bills and utilities: HMO landlords must decide whether to include bills and utilities in the rent or to require tenants to pay separately. Including bills and utilities can simplify the rent collection process, but may also result in higher costs for the landlord. We will discuss this in greater detail now:

Pros and Cons of Providing a HMO with Bills Included

Cons:

  • Time-consuming setup: Landlords have to set up the bills which can be time-consuming.
  • Monitoring utility usage: Landlords need to keep an eye on how much gas and electric tenants are using to avoid excessive costs.
  • Monitoring provider costs: Landlords have to keep an eye on their provider and ensure costs and tariffs do not increase, which can be a challenge to manage.
  • Excessive energy usage by tenants: Tenants may leave the heating and electric on all the time at full blast, which can be expensive for the landlord.
  • Complaints about internet speed: Tenants may be unhappy with the internet provider the landlord has chosen and may complain about internet speed.
  • Cleanliness responsibility: If a landlord provides a cleaner as part of the rent, tenants may not take any responsibility for the cleanliness of the house, assuming that the cleaner will always do it.
  • Managing multiple bills: Landlords have to ensure they are always paying the bills, which can be hard to manage if they have multiple HMOs.

Pros:

  • Tenants prefer All Bills included. 
  • HMO landlords can install smart thermostats, which negates some of the cons above. You can read more about smart thermostats in our House in Multiple Occupation article.

Why Tenants Prefer All Bills Included

In today’s fast-paced world, convenience and simplicity are highly valued by renters, especially for those who are moving into a HMO. Having all bills included in their rent eliminates the hassle and stress of having to set up and manage separate accounts for utilities like electricity, gas, water, and internet.

The availability of fast and reliable internet is crucial for many tenants, and the prospect of waiting for months to have it set up in their new home can be overwhelming. By having internet included in their rent, tenants can have peace of mind knowing that they will have access to the internet from the day they move in.

For many tenants moving into a HMO, it is their first time living away from their parents or student accommodation, and the thought of setting up and managing multiple bills can be intimidating. By having all bills included in their rent, tenants can focus on settling into their new home without having to worry about the added stress of bill management.

Comparatively, if a HMO is not all bills included, and tenants live with others they do not know, deciding on who pays what and how much for utility bills, and whose name the bills are in, can cause tension and lead to disputes. These disagreements often end up affecting the landlord, who may have to mediate and handle the consequences of unpaid bills. The added responsibility and drama of managing utility bills can be easily avoided by providing all bills included in the HMO rent.

Finally, the simplicity of just having one bill to pay each month, rather than multiple bills for each utility, is a major reason why tenants prefer all bills included in their rent. This makes it easier for tenants to budget and manage their finances, and eliminates the stress of having to keep track of multiple due dates and payments.

HMO Landlords Must Know Their Customers’ Needs

Being an HMO landlord is like having your own business, and HMO landlords must start thinking more like entrepreneurs and business owners. They must be proactive in identifying and understanding their customers’ needs and adapting their services to meet those needs.

In today’s business world, customer centricity is the key to success. It is crucial for HMO landlords to understand this concept, and to adopt a customer-centric approach in their business. Customer centricity refers to the practice of putting the customer at the centre of all business decisions and activities. In other words, it is about understanding and meeting the needs of your customers.

It is important for HMO landlords to understand customer centricity and to adopt a customer-centric approach for three key reasons. Firstly, it helps to increase profits, as tenants are more likely to choose a HMO that meets their needs and preferences and even pay more for the privilege. Secondly, it helps to build a loyal customer base. When HMO landlords understand and meet the needs of their tenants, and provide all bills, they are more likely to retain their tenants. This leads to fewer fees for finding new tenants which saves the landlord money. Finally, satisfied tenants tend to be more positive and take better care of the property, leading to less hassle for the landlord and a better tenant experience overall.

Conclusion

The most common question we are asked is What does HMO Stand For? The second most common question we are asked is ‘Should my HMO Be All Bills Included?’. We have tried to answer both questions in this article, as it is important for both tenants and landlords to understand what HMO stands for.

It is also imperative for HMO landlords to consider the key points when managing an HMO. This includes carefully selecting tenants, maintaining the property, collecting rent, managing disputes, and complying with regulations. Lastly, to decide whether to provide all bills included. All bills included eliminates the stress of having to set up and manage separate accounts for utilities and provides peace of mind for tenants, who can focus on settling into their new home. A single bill for all utilities is also easier for tenants to budget and manage their finances, reducing stress and tension. By providing all bills included, HMO landlords can ensure a better tenant experience overall.

If you’re seeking a professional HMO Letting Agent in South London for HMO management or HMO lettings, or if you require any expert HMO advice and consultation, contact us today.

Carl Evans, CEO

Written By Carl Evans, CEO

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