To ensuite or not… that is the question. 

Ensuites are one of the most ferociously debated topics in the HMO industry. While there are benefits for putting ensuites into HMO properties, there are also some massive considerations and potentially very damaging consequences.

Read about the top pros and cons of installing ensuites into your properties below or listen to the full episode on The HMO Podcast.

By the end, you should be able to make a well-informed decision about what is best for your HMO portfolio!

The Pros of Installing Ensuites into HMO Properties

1. Tenants Prefer Ensuites

For starters, ensuites are preferred by tenants. Give someone the choice of two rooms that are exactly the same otherwise but put an ensuite in one of them, and of course, people are going to choose the room with an ensuite!

With that, comes a certain degree of rental confidence. If tenants prefer a certain feature you’re providing, then the likelihood is you’re going to find it easier to let your rooms. 

2. It Can Put You Above the Competition

The second pro of having ensuites in certain markets is that it’ll put you above the competition. Irrespective of tenant preference, it actually helps us build a better-accommodated property. 

Additionally, if you had to think about how to market your HMO rooms to a much more limited supply of tenants, then having ensuites will inevitably help you, particularly if at the same time, you could afford to reduce your prices or be more competitive on price. 

 

The third pro of installing ensuites is that it’s a future proofing solution. Over time, if there is a continuing trend of tenants who prefer rooms with ensuites over non-ensuite rooms, then your HMO properties are going to be the first choice. 

It’s important to note that ensuites aren’t currently an essential quality for the majority of the HMO market, but that could change in the future.

4. The Opportunity for Increased Rents

If you install ensuites into your HMOs, you will be able to get more money in rent almost anywhere in the country. Exactly how much more you can charge depends on the local competition and tenant demographic.

As investors, we ultimately want to generate more cash, which can help us have a healthier HMO portfolio. And ensuites provide an opportunity to do just that!

5. It Provides Additional Privacy and a Better Standard of Living

Ensuites offer a certain degree of privacy, which many would like to see more of in the private rented sector and HMO market. Ensuites create a better standard of accommodation and living, and that can only be a good thing.

The Cons of Installing Ensuites into HMOs

1. The Economics Often Don’t Match up

First and foremost, you need to consider the economics of installing ensuites into your HMOs. In my experience, it can cost anywhere between £1,500 and £3,000 per ensuite, depending on the size, specification, and how you’re going to get the waste outflow from the property. 

So, how long is it going to take you to recoup that cost? If you’re simply relying on increasing the rent per room by an extra £10 to £15 per week, it’s going to take a long time. But there are some areas, particularly in the professional sector, that without ensuites you would struggle to let your rooms, so do the calculations and research and be realistic.

2. It’s a Compromise on Space 

You have to be very careful that putting ensuites in doesn’t compromise on bedroom floor space so much that you can’t get a HMO licence. This can cost a huge amount of money if you end up having to rip out the ensuites.

Even if you’re not going to fail amenity standards, you have to think about whether you’re leaving enough space for the bedroom. People don’t want to live in tiny rooms, even if it has an ensuite. 

3. Expensive Maintenance and Upkeep

The third con is the maintenance and upkeep involved with ensuites, which can be very expensive. Ensuites can be the source of leaks, waste traps will go, shower seals will fail, the silicone and grout will get mouldy, and the drain will get blocked. 

In part, these additional problems can arise because you’re not sending cleaners into ensuite bedrooms, and tenants often won’t clean it properly themselves. 

4. Over Commercialising the Property

If you start banging ensuites into every single room, you run the risk of over commercialising your property. I like to know that I have an alternative exit if the HMO market starts to fail, and that means making sure I can sell my property back to the residential market. 

Not every property I have falls into that criteria. Some of them are in really prime student areas, and they’ll only ever suit investors. But with other HMO properties, particularly professional homes in peripheral locations, you’ve really got to think about this. You could balance this by only putting in one or two ensuites into a property, instead of five.

5. The Potential to Get Re-banded for Council Tax 

The fifth con is the potential to get re-banded for your Council Tax. More and more frequently, local councils and the Valuation Office Agency are banding HMOs on a room-by-room basis, instead of the whole building, and they’re using ensuites as a method of justifying this.

Imagine that your council tax bill went from £150 for the whole property to five times that if you have a five-bedroom professional HMO. What will that do to your bottom line? Because of this increasing trend, I’m extremely cautious about putting a lot of ensuites into my HMOs. 

So, those are the five biggest pros and cons for installing ensuites into your HMOs! Personally, the cons are substantial enough for me to not want to install too many ensuites into my HMO properties. And if the only way for me to compete in the future is to put ensuites in, then I’ll do that retrospectively. 

But you need to make your own decision and build that into your business plan now. There isn’t a right or wrong answer here. Just because I don’t really do it, that doesn’t mean it’s wrong for you. In some places, you need to as you won’t be able to compete otherwise.

We would love to hear what you think, so start a thread in The HMO Community Facebook Group and tell us whether you’re installing ensuites into your HMOs or not and what you’re going to do as a result of reading this. For additional lessons and advice on the HMO industry, sign up for The HMO Roadmap now!

About the Author:

Andy Graham is the founder and the lead trainer at The HMO Roadmap! He is also the co-founder of The HMO Mastermind and Smart Property, a specialist HMO property investment and management company. He writes as a regular columnist in different magazines about a variety of HMO topics and is the host of The HMO Podcast! Follow Andy on Instagram!