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.
HMO mortgages may only be available to experienced landlords. Lenders will not accept applications from anyone who has been a landlord for two years or more and/or has experience in HMO leasing. Additional requirements may be required by lenders. A HMO mortgage will not be approved for a first-time landlord. Instead, you'll need to rent a property to one household.
What is a HMO, exactly? What is a house in multiple occupation? A standard HMO can be run by a landlord with no more than four people. HMOs require different mortgage requirements than buy to let mortgages for entire-property tenancies.
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.
A traditional property to buy and let would normally accommodate one person or a whole family. Renters would pay a single rent payment, either weekly or monthly. The household would also be responsible for paying the utility bills. These are sometimes referred to as "singlelets".
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?
HMO properties may be available for sale that offer irresistible "100%+ Gross Yields". One would not want to miss out on that opportunity. Be aware of the gross yields in HMO sectors: Your costs include insurance, council tax and utility bills. You also have to pay rent arrears or voids. A HMO could have a ROI of between 8-10% and 4-5% per year for single-tenancy buys-to-let.