What is an HMO mortgage, and how does it work? HMO mortgages are a mortgage that landlords can use to rent their property to more than one tenant. There are some key differences between specialist buy-to�let mortgages.
What returns can an HMO give me?
HMO mortgages are offered by 27 lenders to individuals and 23 to limited companies at the time of writing. HMO mortgage rates are more expensive than buy-to-let mortgages because they are a specialty property type. The increase in competition has made rates more affordable for landlords. They start at 1.64% for individuals and 2.69% for limited companies.
Traditional rental properties can be found in almost any location. We have worked with many letting agents all over the country and they have rented properties at almost any location. They've been rented anywhere, in rural or urban areas.
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.
HMO landlords pay utility bills, except if the property has been converted into flats and the title deeds were sent to the land registry.
HMO Buy to Let4 bedroom semi detached house with 2 receptions rooms1 reception room converted into a bedroomRents to 5 single-working professionalsMonthly renting income per tenant = PP400Monthly renting income = PP2000Annual rental revenue = PL24,000. The above example illustrates why HMO property owners are more interested in them. The difference in gross rent income can be very significant.