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Private Rental vs Multiple Occupation – you decide!

Anyone with a property to let has a number of options – but which one will generate the best incomes… and least hassle? Jamie Langley has this advice for the undecided.

We have had a large number of clients coming to us in recent months, ahead of the changeover in student years at our local universities.

The reason is quite simple: their properties are currently let as “HMOs” (Houses in Multiple Occupation) – the preferred letting option for many students looking for digs and wanting to share with their mates.

The problem is that many landlords are struggling to re-let their rooms with the rise of university purpose built accommodation. This is a trend all over the country, and we’ve seen plenty of evidence of this in Swansea and Newport as well as Cardiff. You can see the appeal: the students get shiny new, purpose built accommodation – often quite close to their campus – while the Universities have an income stream.

Student lets are big business these days. For those interested in such facts, according to GVA, 53% of the properties occupied by our large army of students are in the hands of the universities themselves. Big players such as Unite and UPP certainly dominate the private market, but that still leaves many thousands of individual landlords owning “multi-occupied” houses and flats.

But just how good a deal do these landlords get? And would they be better off going through another route?

In real terms an HMO will bring in a significantly higher rental income as it is let room by room. That said, there are some downsides: for instance there are higher costs to the landlord because they will need to include all utility bills, as well as extra bills to face complying with all the additional licensing requirements for an HMO.

On top of that there is the possibility of lost income if they are renting to students who have traditionally only occupied the premises for nine months of the year.

Compare that, then, to a normal private let where a 12-month tenancy could be in place with all utilities and rates paid by the tenant and no HMO licence required. Do the maths and there is often very little overall difference.

For those currently finding it difficult to secure lets to next year’s students, it can be a no-brainer if there is a waiting list of private let tenants looking for property – and that’s certainly the case at the moment in many parts of South Wales. In particular, there is heavy demand for family-sized homes – often from professional people keen to have far longer lets than 12 months…

So if you’re thinking of how to secure the best deal for your property, get in touch. We can give honest advice on what you can expect in terms of rental, guide you through the change in status process, and give expert opinions on what changes or improvements you might make to your property to maximize your income.

And, of course, we can find you the quality tenants you want too!

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