hmo finance group
What are the expected returns from an HMO
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.
Students: Can have their rent paid by their parents. Usually, they have a set length of tenancy.
What are the expected returns from an HMO
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. -
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.
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".
HMOs are more risky than regular BTLs. HMO tenants tend to move more quickly because they are not related, which increases the chance of voids and unpaid rents. They may be less committed to the property, which can lead them to take less responsibility for its upkeep and care. It can be harder to spot any damage or problems with a tenant.