Buy to Let mortgages are typically cheaper in terms fees and rates, and there are many lenders who offer them. Because they are more flexible, they can be easier to obtain. However, HMOs can sometimes make more than the mortgage cost.
HMO buy-to-let4 bedroom semidetached house with two reception rooms1 conversion room to a bedroomRent to five single-working professionalsMonthly rental Income per Tenant = PS400Monthly rentals income =PS2000Annual rental income =PS24,000. The above example shows why HMO properties are becoming more popular with landlords. The difference between gross rental income and net rental income can be staggering.
What is commonly called an HMO but is in fact a large HMO. This is a property that has five or more tenants and where they share a toilet, bathroom, or kitchen. The building may have a certain number of stories. To operate Large HMOs, Landlords will need to have a HMO license. This licence is valid for five year and can be referred to as Licsenced HMOs.
Students and young professionals rent HMOs because they may not have the financial means to rent an entire property and can't move in with their partner. Although renting a room is cheaper than renting an entire property, the total rent for all rooms is often more than what could be charged to one family. An HMO can provide a landlord with a better rental income.
It is common for shared areas to be 'left' as no one wants another's mess. Sometimes landlords have to clean their properties or hire cleaners.
HMOs are complicated and many buy-to-let lenders will not lend to novice landlords. Lenders have different criteria, but typically, one to two year of experience as a landlord suffices. While lenders may accept new landlords, it is not common for them to require that the property be managed by an agent. Our buy to ten team can help determine if you will qualify for an HMO-mortgage.