hmo finance 4.0
HMOs that are valued based on rental income will not be valued by all lenders. Most lenders will consider the HMO to have the same value as a standard home. This can affect the amount of money you can borrow.
Why invest in HMOs? HMOs are more profitable than regular rental properties. But what are they and how do you finance them? A House of Multiple Occupation is a property in which three or more people share a bathroom or kitchen and they are not related. Each property must have a HMO license from the local authority to ensure they comply with regulatory standards. These homes, also known as house-shares, are popular with young professionals and students. Rent is usually more affordable than small apartments or studios. An HMO is a great investment for landlords and property investors. Multiple bedsits typically yield higher rental yields than a stand-alone buy to let.
Multi lets can be thought of as HMOs. They are rented out to unrelated tenants who share communal facilities within the properties. But, they don't have licenses.
HMOs that are valued based on rental income will not be valued by all lenders. Most lenders will consider the HMO to have the same value as a standard home. This can affect the amount of money you can borrow.
HMO mortgages can be offered by 27 lenders at the time this article was written. 23 of these loans are available to Limited Companies. HMO mortgage rates are higher than those for buy to let because this is a more specific property type. For landlords, rates have become more competitive due to increased competition in this industry. Rates start from 1.64% (individuals) and go up to 2.69% (limited companies).
It can be difficult to find the right HMO financing for you. Each lender has different criteria. Our experienced buy-to-let team can help you find the best HMO mortgage or provide general advice on property finance.
Students can get their rent guaranteed, often by their parents. They also have a natural limit on the length of their tenancy.
HMO licences may be granted by different councils. If you are applying for a HMO licence, you should be fully informed about all the conditions. HMO licences must be obtained from the local authority. Otherwise, a fine of up PS20,000 will be imposed on anyone renting a licensable HMO.