hmo residential mortgage
HMO houses can be more lucrative than regular buy-to-let investments. HMO mortgages are becoming more popular among landlords. But do you really need one? Or can a traditional buy-to-let mortgage suffice?
Location is not a limitation for traditional rental properties. We work with letting agents across the country who have rented properties in nearly every possible location. They've all been rented, whether in the country, city or rural.
An HMO, as many call it, is actually a large HMO. It is a rental property where five or more tenants share the bathroom, kitchen, and toilet facilities. A building may also have a number of stories. A HMO licence is required by landlords to operate Large HMOs. It will be valid for five-years and is sometimes called Licsenced HMOs.
HMO houses can be more lucrative than regular buy-to-let investments. HMO mortgages are becoming more popular among landlords. But do you really need one? Or can a traditional buy-to-let mortgage suffice?
A House in Multiple Occupation is more profitable than traditional buy-to-let. The UK has a high rental demand and landlords can maximize their rental yields by using low-interest rates. The key to maximising your rental income is securing the right mortgage.
HMOs are considered to be more at-risk than standard BTLs. HMO tenants have a tendency to move quickly and are often unrelated, which can increase the likelihood of voids or unpaid rentals. They might be less committed and take on less responsibility for the property's care and maintenance. A tenant may be more difficult to spot if the property is damaged or has problems.
A traditional buy-to-let model would normally house a couple or three people. Disputes between the members of the household are often resolved without the need to contact the landlord. A landlord will often have an HMO type for student buy to rent or a HMO that is exclusively for working professionals.
There are also void times to be aware. HMOs tend to have longer void periods than traditional buy to rent. HMOs are more expensive than traditional buy-to let models and landlords might have to pay higher maintenance bills. This can be due to the use of communal areas such bathrooms, kitchens, living rooms and other common spaces (where available).