When assessing the worth of your HMO, lenders may consider the rental income. This is especially advantageous if you intend to withdraw equity from the property.
What is a HMO and what does it mean? A house under multiple occupation (HMO), or property with shared facilities, such as kitchens and bathrooms, is one that's rented to more than one person. This is typically a family. To run an HMO standard with four or less occupants, you do not need a license as a landlord. HMOs are subject to different mortgage requirements than buy-to -let mortgages.
Traditional rental properties can be found in almost any location. We have worked with many letting agents all over the country and they have rented properties at almost any location. They've been rented anywhere, in rural or urban areas.
What is an HMO loan? HMO mortgages are designed for landlords who wish to rent out their property more than three tenants. These specialist mortgages for buy-to let have key differences.
Which tenants can my HMO target? - Low-cost housing / affordable housing / Housing benefit tenants: Some landlords opt to rent out their entire property to local authorities in order to receive a low-cost, steady income. - Working professionals: Increasing numbers of people rent into their 30s and 40s. These tenants are looking for properties that have higher standards, such as more bathrooms and more stability, in order to live a less stressful life. -
You can usually make more from an HMO as a landlord than by renting to a family. You will be able to charge each room separately, which can lead to higher overall charges. A specialist mortgage is required to achieve this.
Traditional buy-to-let properties are typically suitable for one or more people. A single rental payment from the household would be due on a weekly, or monthly basis. The utility bills would be paid by the household. These are often referred to simply as "single-lets".