hmo bridging finance
What returns can an HMO give me?
HMO properties might be offered for sale with irresistible "100%+ gross returns". It's hard to imagine anyone not wanting a piece of this. Gross yields in HMOs are not good. There are significant costs involved, such as council tax, insurance and utility bills. Management costs include rent arrears, voids, and management costs. You might see a ROI of 8-10% for an HMO, as opposed to 4-5% for a single-tenancy Buy-to-Let.
HMOs are more difficult to manage than traditional buy-to-let models. Tenants can sometimes get irritated when they are sharing facilities within an HMO. You may also be a landlord and act as a mediator between tenants who do not see eye-to-eye.
What returns can an HMO give me?
A House in Multiple Occupation or HMO is a property which is let to more tenants than one family. It is where tenants share rooms and occupy their private bedrooms. the lounge, kitchen and bathroom. An HMO is when people refer to a flat share or a house share.
HMOs will require a license from your local council for five years. It's important that you inquire about the policy in your area with the relevant local authority. The general rule applies to properties with at least five occupants. However, licences may be required for smaller properties with fewer tenants. You will be in the best position to apply for it, as the requirements vary depending on where you are located.
A mortgage lender is never a good idea. It's not wise to approach them in the hopes of securing a loan. A specialist can ensure that the right lender is approached, and that you are eligible for the best rates. For more information, or to make an enquiry, simply contact our experts with your questions.
The potential for houses in multiple occupation (HMO), to be more profitable than regular buy and let investments, is a reason why. HMO mortgages have been increasing in popularity. However, do landlords really need them? Will a traditional buy and let mortgage suffice?