Buying an HMO (House in Multiple Occupation) property is the most common way landlords seek higher rental incomes in the UK. These properties are ideal for investors who want to maximise their income by letting individual rooms to multiple tenants. If you’re new to HMO investments, this blog will explain how to buy HMO property step by step, helping you avoid common mistakes and make informed decisions. Let’s start with the basics:

What is an HMO Property?

An HMO property is a house rented to three or more tenants from different households sharing common spaces like kitchens or bathrooms. These properties provide a place for groups such as students, young professionals, or workers in urban areas, offering affordability for tenants and high returns for landlords.

For example, HMO properties are in demand in areas like Wimbledon due to the growing need for affordable accommodation. They often provide better rents than traditional buy-to-let properties, making them attractive for investment.

Step 1: Research the Market

The first step to buying an HMO property is understanding the local market and looking for multiple ways to get new renters. Research areas with high rental demand, focusing on locations that attract tenants who prefer shared housing. Here are some tips:

• Locations like Wimbledon, South Wimbledon, and nearby London suburbs often demand HMOs due to their proximity to universities, offices, and public transport.

• Students may prefer properties close to universities, while young professionals often prioritise good transport links and modern amenities.

Local estate agents Cribs Estates and property management companies like can provide valuable insights into tenant preferences and market trends. They have a team of professionals in the field working to get new tenants and updating with the new laws and regulations. 

Step 2: Decide Whether to Buy or Convert

You can purchase an existing HMO or convert a standard property into one. Each option has its pros and cons:

• Buying an Existing HMO:

  • Advantages: Immediate rental income and no renovation delays.

  • Disadvantages: Higher upfront costs and limited design flexibility.

• Converting a Property:

  • Advantages: You can tailor the layout to meet tenant needs.

  • Disadvantages: Requires planning, renovation, and local council approval.

If you are considering conversion, make sure the property layout allows for large communal spaces, such as shared kitchens or living rooms, which are important for tenant comfort.

Step 3: Check Licensing Requirements

Most HMO properties in the UK require a licence. Licensing rules vary by local authority, so you must check the specific regulations in your chosen area. In Wimbledon, for instance:

• They are needed for properties with five or more tenants forming more than one household.

• May apply to smaller HMOs depending on council rules.

Licences ensure the property meets health, safety, and management standards, such as adequate room sizes, fire safety measures, and proper waste disposal facilities.

Step 4: Secure the Right Mortgage

HMO properties require specialised financing. Lenders often offer HMO mortgages, but these come with stricter conditions than standard buy-to-let loans, such as:

• Higher deposit requirements (usually 25-40%).

• Proof of experience in property investment or letting.

• A solid business plan showing projected rental income and expenses.

Work with a mortgage broker experienced in HMO financing to find the best deal.

Step 5: Calculate Costs and Returns

Owning an HMO involves higher costs compared to single-family rentals. Before buying, calculate both your initial and ongoing expenses:

• Property price, licensing fees, and renovation costs (if converting).

• Utilities, council tax, maintenance, and insurance.

Despite higher expenses, HMOs typically offer 8-12% rental returns, significantly higher than the average 3-5% returns from traditional rentals. It makes them a worthwhile investment if managed well.

Step 6: Ensure Compliance with Legal and Safety Standards

HMO landlords must adhere to strict legal and safety standards to protect tenants. Some key requirements include:

• Install fire alarms, extinguishers, and fire doors.

• Conduct periodic inspections and ensure appliances are safe.

• Provide sufficient space per tenant and ensure communal areas are clean and functional.

Non-compliance can lead to heavy fines or loss of your HMO licence, so staying up-to-date with regulations is crucial.

Step 7: Focus on Tenant Needs

Successful HMOs cater to the needs of their target tenants. Here’s what to prioritise:

• Ensure bedrooms are well-sized and private.

• A clean, spacious kitchen and a living area make your property more appealing.

• Features like high-speed internet and laundry facilities are essential.

In areas like Wimbledon, tenants expect higher standards, so investing in quality furnishings and fittings can attract reliable renters and justify premium rents.

Step 8: Consider Professional Management

Managing an HMO involves more effort than a standard rental. The workload can be significant, from handling tenant disputes to ensuring regular maintenance. Hiring a professional property management company like Cribs Estates can save you time and ensure your property is well-maintained. Their services include:

• Tenant sourcing and vetting.

• Rent collection and financial management.

• Regular property inspections and maintenance coordination.

How Cribs Estates Can Help

Cribs Estates specialises in property management for landlords in Wimbledon and surrounding areas. Whether you're a first-time HMO investor or an experienced landlord, their expertise ensures your property is profitable and compliant.

• Knowing Wimbledon’s rental market helps you find the right property and tenants.

• From licensing to maintenance, they handle every aspect of property management.

• They ensure your property meets all HMO regulations, protecting you from penalties.

Buying an HMO property can be a rewarding and profitable investment if you are utilising the services of a professional. With Cribs Estates, buying and managing an HMO becomes a stress-free experience.